Serious Illness Medical Expenses and PIT: Employer Support, Article 40 Tax Reduction and Self-Settlement
Hanoi Tax Department answered a question about roughly 100 million VND of medical costs for a spouse with no health insurance, under Decree 253/2026/ND-CP of 30 June 2026. Employer support for serious illness treatment of an employee and listed relatives (Article 8(4)(b)) is not taxable, capped at hospital fees after insurer payments. Medical costs falling under Article 40 tax reduction are not counted in Article 49 deductions. A taxpayer requesting reduction or deductions before tax calculation must self-settle and cannot authorize the paying agency. The tax office gave no specific conclusion for this case and asked the taxpayer to check actual records against the rules.
RegHub explainer by New MarketerLast updated:
Based on:Nghị định số 253/2026/NĐ-CP; mã câu hỏi 151026-28 - Ministry of FinanceEffective:
This explanation was generated by AI and checked by an automated AI review, not by a human expert. It is not legal, tax or accounting advice and may contain errors. Check the official document before you rely on it.
Serious Illness Medical Expenses and PIT
Question
A person asked about a household of two spouses with no dependents. The wife underwent hysterectomy and ovarian surgery with no health insurance, total cost about 100 million VND, paid in installments. They asked whether the family can get PIT deductions, a refund or any support, and what conditions, procedures and documents apply.
Answer from the tax office
Hanoi Tax Department, citing Decree No. 253/2026/ND-CP of 30 June 2026, noted the following:
1. Employer support
Employer support for serious illness treatment of an employee and relatives (Article 8(4)(b)) is income that is not salary or wages and is not counted as taxable PIT income.
Covered relatives: biological children, adopted children, stepchildren of a spouse; spouse; biological parents; parents-in-law; stepfather and stepmother; adoptive parents.
The non-taxable amount is the support the employer actually pays per invoices and documents, capped at the hospital fees of the employee and relatives after deducting insurer payments (if any). Serious illness is determined under the Minister of Health's rules.
2. Tax reduction under Article 40
A taxpayer in difficulty due to natural disaster, epidemic, fire, accident or serious illness affecting ability to pay tax may be considered for a tax reduction matching the damage, but not above the PIT payable.
- Assessed per year.
- Damage is the total actual cost of remedying the damage and paying medical expenses, minus compensation or insurance received (if any).
- If annual tax payable exceeds the damage, the reduction equals the damage; if lower, it equals the tax payable.
- Dossier and procedures follow tax administration law.
3. Deduction under Article 49
Article 49 allows deducting costs of medical examination and treatment at domestic facilities within the list paid by health insurance, up to 23 million VND per year. Conditions: valid invoices and documents plus an itemized expense statement; invoices showing the taxpayer's or dependent's details; not paid from other sources (sponsorship, support, state budget, social insurance, health insurance, etc.). Medical costs covered by Article 40 reduction are not counted in this deduction.
4. Self-settlement
Under Article 51(3), a taxpayer who requests Article 40 reduction or Article 49 deductions before tax calculation must self-settle and cannot authorize the paying agency.
5. Conclusion and notes
- The tax office gave no specific conclusion on whether this family gets a reduction or refund, and did not say whether the wife's illness is a serious illness.
- The taxpayer should check the rules against actual records to determine eligibility.
Legal Basis: Decree No. 253/2026/ND-CP (Articles 8, 40, 49, 51)