On May 29th, 2019, Hanoi Department of Tax released the Official Letter No.39722/CT-TTHT. Whereby:
In case the Company pays allowance to employees (who sign labor contracts with the term of 3 months or more) due to termination of labor contracts ahead of time, then:
– The job-loss allowance paid for laborers who leave their jobs according to the provisions of the Law on Social Insurance and the Labor Code shall not be included in taxable incomes from laborers’ salaries and wages.
– For the job-loss allowance paid for laborers who leave of work higher than the levels prescribed by the Law on Social Insurance and the Labor Code, the Company shall sum up it with salaries and wages to withhold personal income tax according to Progressive tariff schedule before payment.
– In case the Company pays employees the financial supporting equal to 02 months of salary after the termination of the labor contract, if this expense is from two million (2,000,000) VND or more, the Company must withhold 10% tax on the income before it is paid to the person.
