Thuế TNCN với người nghỉ việc – PIT for resignation

Personal income tax for people who quit their job is special because some income will be paid after the labor contract has ended.

How much tax is deducted?
> If the Company pays the employee before terminating the labor contract, personal income tax is deducted according to the partially progressive schedule.

> If the Company pays the Employee after terminating the Labor Contract, the payment to the Employee is 2,000,000 VND or more, the Company shall deduct personal income tax at the rate of 10% when paying.

Thus, in case the Company pays salary after terminating the Labor Contract but deducts tax according to the progressive tax schedule, it may result in under-deduction of personal income tax and the company will have to bear the underpayment of tax along with the money. late payment penalty.

For example: If the labor contract ends on April 30, 2022, but the April salary is paid on May 10, 2022, the final month’s personal income tax will be calculated at 10% of the payment level.

Refer to official dispatch 51/TCT-DNNCN

Pursuant to the above regulations and instructions, in case Suntory Pepsico Vietnam Beverage Company Limited pays income from salaries and wages of two million (2,000,000) VND or more per time to employees At the time after the labor contract has been terminated, the Company must deduct the employee’s personal income tax at the rate of 10% of the total taxable income from salaries and wages determined according to stipulated in Clause 2, Article 3 of the Law on Personal Income Tax No. 04/2007/QH12 dated November 21, 2007 of the National Assembly (amended by Clause 1, Article 1 of Law No. 26/2012/QH13, Supplementing a number of articles of the Law on Personal Income Tax dated November 22, 2012 of the National Assembly). In case the employee only has income that is subject to tax deduction at the above rate but the estimated total taxable income of the employee after deducting family circumstances is not at the level to pay tax, the employee Employees with income make a commitment (according to the form issued with the guiding document on tax management) sent to the Company so that the Company can temporarily not deduct personal income tax.

Are subsidies and compensation amounts subject to personal income tax?
According to official dispatch 48772/Ct-htr, in Clause 2, Article 2 Taxable incomes: “2. Income from salaries and wages: Income from salaries and wages is the income the employee receives from employers, including:…b) Allowances and allowances, except for the following allowances and allowances:

b.6) Unexpected hardship allowance, allowance for labor accidents, occupational diseases, one-time allowance for giving birth or adopting a child, maternity benefits, convalescence and recovery allowances Post-maternity health benefits, benefits due to reduced working capacity, one-time retirement benefits, monthly survivor benefits, severance benefits, job loss benefits, unemployment benefits and other benefits according to regulations provisions of the Labor Code and the Social Insurance Law.

Excerpt from official dispatch 813/TCT-TNCN:

Based on the above regulations and based on the opinions of the Ministry of Labor, War Invalids and Social Affairs in Official Dispatch No. 4754/LDTBXH-LDTL dated December 2, 2013 of the Ministry of Labor, War Invalids and Social Affairs, the amount The severance allowance paid by Scancom Vietnam Co., Ltd. to Mr. Thanh (determined according to the provisions of Article 42 of the 1994 Labor Code) is deductible when determining taxable income. The amount paid by the Company to Mr. Thanh for violating the notice period is compensation and is exempt from personal income tax.

Based on the above regulations and the documents attached to Official Dispatch No. 15062/BTC-TCT, the 5-month salary agreed upon by Scancom Vietnam Limited Liability Company with Mr. Nguyen Nhat Thanh is additional compensation. for employees to terminate labor contracts. According to the provisions of Point 12, Section III, Part A of Circular No. 84/2008/TT-BTC dated September 30, 2008 of the Ministry of Finance, this additional compensation (05 months’ salary) is other compensation under provisions of law are exempt from personal income tax.

Excerpt from official dispatch 3168/CT-TTHT

Based on the above regulations, in your case, if the Representative Office pays compensation for damages due to unilateral illegal termination of the labor contract in accordance with the provisions of the Labor Code, then This compensation belongs to income exempted from personal income tax according to regulations.

In case the Representative Office pays a severance allowance outside the provisions of the Labor Code and the Social Insurance Law, this payment must be included in the personal income taxable income, in case at the time of payment. Paying support, you have decided to quit your job and have quit your job, the Company deducts personal income tax at the rate of 10% on the total payment from two million (2,000,000) VND/time or more, at the end of the year you have Obligation to directly declare final settlement with tax authorities according to the partially progressive tax schedule.

Legal grounds
Regarding calculation and tax rates, Clause 2, Article 8 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance stipulates:

“2. Taxable income from salaries and wages

a) Taxable income from salaries and wages is determined by the total amount of salaries, wages, remunerations, and other income of the nature of salaries and wages that the taxpayer receives in a given period.

Tax according to the instructions in Clause 2, Article 2 of this Circular.

b) Time to determine taxable income: The time to determine taxable income for income from salaries and wages is the time when organizations and individuals pay income to taxpayers.

Article 25 on tax deductions and tax deduction documents stipulates:

“first. Tax deduction: Tax deduction is the act of organizations and individuals paying income calculating and subtracting the tax amount payable from the taxpayer’s income before paying income, specifically as follows:

b) Income from salaries, wages…….b.2) For resident individuals who sign a labor contract of three (03) months or more but quit work before the end of the labor contract, the organization will , individuals paying income still make tax deductions according to the Partial Progressive Tax Schedule.

….i) Tax deduction for some other cases

Organizations and individuals that pay wages, remunerations, and other payments to resident individuals do not sign labor contracts (as guided in Points c and d, Clause 2, Article 2 of this Circular) or sign labor contracts. Labor contracts of less than three (03) months with a total income payment of two million (2,000,000) VND/time or more must have tax deducted at the rate of 10% of the income before paying to the individual…. ”