On July 16th, 2024, the Binh Duong Province Tax Department issued Official Letter No. 18833/CTBDU-TTHT, accordingly:
In cases where the Company and employee (who has signed a labor contract with the Company for 03 months or more) agree to terminate the labor contract from July 15th, 2024, and on August 05th, 2024, the Company pays employee wages, salary, leave pay, severance allowances, and other supports, the Company must deduct PIT as follows:
+ For salaries, wages, and other amounts of salary and wages for the period before the termination of the labor contract (working period of July 2024), the Company shall deduct PIT according to the progressive tax rates.
+ For severance allowances paid to employees who quit their jobs according to the provisions of the Social Insurance Law and the Labor Law, they are not included in taxable income from salaries and wages.
+ For termination support payments and seniority support according to the Company’s policy, if these support payments are outside the provisions of the Labor Law and the Social Insurance Law after the termination of the contract at the Company, for each payment of two million (2,000,000) VND or more, the Company must deduct PIT at the rate of 10% of the total income paid.
