Answering the regulation on paying personal income tax on early retirement money when streamlining the apparatus

Xuyên Đông |

The Ministry of Finance has just responded to Phu Tho voters regarding the regulation on personal income tax payment for early retirement support when streamlining the apparatus.

Voters in Phu Tho province reflected that in the process of implementing the arrangement and streamlining of the organizational structure of state-owned enterprises associated with the arrangement of administrative units, a part of workers at electricity industry units have retired early due to changes in organizational model and no longer have suitable job positions.

According to the unit's plan, workers are paid support from the welfare fund to contribute to stabilizing their lives.

However, the determination of whether this support belongs to personal income taxable income or not still has inconsistent understanding and application in practice.

Voters believe that this is a support item for stabilizing life, not in the nature of ordinary salaries and wages, and propose that the Ministry of Finance have specific and unified guidance.

On the Information Portal, the Ministry of Finance said that according to the Law on Personal Income Tax No. 109/2025/QH15, income from salaries and wages of individuals includes salaries, wages and items of salary and wage nature; remuneration, benefits in cash or not in cash in any form and other allowances, subsidies, and income.

The Law also stipulates the deduction of the following allowances and allowances: Allowances and allowances according to the provisions of law on preferential treatment for people with meritorious services; severance allowances, unemployment allowances; social protection allowances and other allowances, allowances, and incomes that are not of a salary or wage nature as prescribed by the Government.

At the same time, at point h, clause 3, Article 8 of Decree No. 253/2026/ND-CP dated June 30, 2026 of the Government detailing a number of articles and measures to organize and guide the implementation of the Personal Income Tax Law, it has clearly stipulated the items not included in taxable income, including: "Sudden difficulty allowance, unemployment allowance, severance allowance, job loss allowance according to the provisions of law".

Decree No. 253/2026/ND-CP also stipulates: In case organizations and enterprises have specific regulations in financial regulations or internal regulations or labor contracts or labor agreements on the level of severance allowance and job loss allowance higher than the level prescribed by law, the actual payment exceeding this level will also not be included in the taxable income of employees.

Xuyên Đông
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