On November 13, 2023, Hai Duong Provincial Tax Department issued Official Dispatch No. 15692/CTHDU-TTHT, whereby:
In case the Company signs an indefinite-term labor contract in accordance with the provisions of the Labor Code, the two parties now agree to terminate the labor contract but the Company completes the settlement and payment procedures. salary and benefits for employees after the date of termination of the Labor Contract. Based on the time of payment of income to employees, determine taxable income as follows:
- For wages, remunerations, unused leave paid and and the other amounts paid as wages or remunerations, the Company makes withhold according to a progressive tax table before paying to employees;
- Severance and other benefits according to the provisions of the Labor Code are not included in personal income taxable income from the employee’s wage and remuerations;
- For the income that the Company pays to employees (other than the provisions of the Labor Code) after terminating the labor contract at the paying agency, if this expense is excess two million (2,000,000 ) VND, the Company shall withhold according to the instructions in Point i, Clause 1, Article 25 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance.
