{"id":9720,"date":"2026-09-04T16:14:21","date_gmt":"2026-09-04T09:14:21","guid":{"rendered":"https:\/\/ketoan.man.net.vn\/?p=9720"},"modified":"2026-09-04T16:14:21","modified_gmt":"2026-09-04T09:14:21","slug":"cong-van-12004-ttphcm-qldn3","status":"publish","type":"post","link":"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/","title":{"rendered":"Official Document 12004\/TTPHCM-QLDN3: Tax deduction for severance pay (10%)\u00a0"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">Official Letter 12004\/TTPHCM-QLDN3 is the official response from the Ho Chi Minh City Tax Department, addressing a common issue faced by payroll accountants: whether or not to deduct personal income tax (PIT 10%) when paying salaries and allowances to employees after they have left their jobs, and on which amounts. Incorrect application risks both retroactive tax collection and over-deducting, potentially disadvantaging employees. This article systematically reviews all the legal basis related to Official Letter 12004\/TTPHCM-QLDN3, helping accounting and human resources departments handle payments correctly from the very first payment.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_88 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Index<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewbox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewbox=\"0 0 24 24\" version=\"1.2\" baseprofile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Vi_sao_Cong_van_12004TTPHCM-QLDN3_dang_chu_y_voi_ke_toan_tien_luong\" >Why is Circular 12004\/TTPHCM-QLDN3 noteworthy for payroll accounting?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Can_cu_phap_ly_lam_nen_cho_Cong_van_12004TTPHCM-QLDN3\" >Legal basis for Official Letter 12004\/TTPHCM-QLDN3<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Thu_nhap_chiu_thue_theo_Luat_Thue_thu_nhap_ca_nhan_2025\" >Taxable income under the Personal Income Tax Law 2025<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Khoan_thu_nhap_duoc_mien_thue_lien_quan_den_ngay_phep_chua_nghi\" >Tax-exempt income related to unused vacation days.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Nghia_vu_khau_tru_10_khi_chi_tra_cho_nguoi_khong_con_hop_dong_lao_dong\" >The obligation to deduct 10% when paying employees who no longer have an employment contract.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Hieu_luc_ap_dung_theo_Dieu_69_Nghi_dinh_2532026ND-CP\" >Effective date as per Article 69 of Decree 253\/2026\/ND-CP<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Noi_dung_tra_loi_chinh_thuc_tai_Cong_van_12004TTPHCM-QLDN3\" >The official response is contained in Official Letter 12004\/TTPHCM-QLDN3.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Vi_du_minh_hoa_cach_ap_dung_Cong_van_12004TTPHCM-QLDN3\" >Example illustrating how to apply Official Letter 12004\/TTPHCM-QLDN3<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Nhung_sai_sot_doanh_nghiep_thuong_gap\" >Common business mistakes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Vi_sao_doanh_nghiep_nen_ra_soat_lai_quy_trinh_chi_tra_cho_lao_dong_nghi_viec_ngay_tu_bay_gio\" >Why businesses should review their severance pay processes now.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Ket_luan\" >Conclude<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Thong_tin_lien_he_MAN_%E2%80%93_Master_Accountant_Network\" >Contact information MAN \u2013 Master Accountant Network<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Cau_hoi_thuong_gap_ve_Cong_van_12004TTPHCM-QLDN3\" >Frequently Asked Questions about Official Document 12004\/TTPHCM-QLDN3<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Nguoi_lao_dong_da_nghi_viec_thi_cong_ty_co_phai_khau_tru_thue_TNCN_khi_tra_luong_con_no_khong\" >If an employee has left the company, is the company still required to deduct personal income tax when paying outstanding wages?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Tro_cap_thoi_viec_co_bi_tinh_vao_thu_nhap_chiu_thue_de_khau_tru_10_khong\" >Are severance pay payments included in taxable income for the purpose of deducting tax under form 10%?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Tien_nhung_ngay_phep_chua_nghi_khi_thoi_viec_co_duoc_mien_thue_toan_bo_khong\" >Are unused vacation days paid upon termination of employment fully tax-exempt?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Muc_chi_tra_duoi_5_trieu_donglan_cho_lao_dong_nghi_viec_co_phai_khau_tru_thue_khong\" >Is a severance payment of less than 5 million VND subject to tax deduction?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/ketoan.man.net.vn\/en\/cong-van-12004-ttphcm-qldn3\/#Cong_van_12004TTPHCM-QLDN3_ap_dung_tu_thoi_diem_nao\" >From what date does Official Document 12004\/TTPHCM-QLDN3 come into effect?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Vi_sao_Cong_van_12004TTPHCM-QLDN3_dang_chu_y_voi_ke_toan_tien_luong\"><\/span><b>Why is Circular 12004\/TTPHCM-QLDN3 noteworthy for payroll accounting?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">From July 1st, 2026, <\/span><strong><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/thuvienphapluat.vn\/van-ban\/Thue-Phi-Le-Phi\/Nghi-dinh-253-2026-ND-CP-huong-dan-Luat-Thue-thu-nhap-ca-nhan-699193.aspx\" target=\"_blank\" rel=\"noopener\">Decree 253\/2026\/ND-CP<\/a><\/span><\/strong><span style=\"font-weight: 400;\"> Officially effective and applicable to the 2026 personal income tax period, this regulation has led to a series of situations arising in the actual payment of salaries that were not fully listed in the original document. These include cases where businesses pay salaries, unused annual leave pay, and severance pay to employees. <\/span><b>employment contract terminated<\/b><span style=\"font-weight: 400;\"> is one of them.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Circular 12004\/TTPHCM-QLDN3 was issued specifically to answer this question. This is not a new legal document, but rather a guidance circular on application. However, for accountants, it has very high practical value because it clearly specifies how to apply three groups of regulations simultaneously: determining taxable income, tax-exempt income, and the obligation to deduct tax.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Ignoring Circular 12004\/TTPHCM-QLDN3 can lead to businesses forgetting to deduct payments made after employees have left their jobs, resulting in a shortfall in withheld and paid taxes, and subsequent tax recovery during final settlement or audits.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Can_cu_phap_ly_lam_nen_cho_Cong_van_12004TTPHCM-QLDN3\"><\/span><b>Legal basis for Official Letter 12004\/TTPHCM-QLDN3<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<figure id=\"attachment_9722\" aria-describedby=\"caption-attachment-9722\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-9722\" src=\"https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Can-cu-phap-ly-lam-nen-cho-Cong-van-12004_TTPHCM-QLDN3.jpg\" alt=\"C\u0103n c\u1ee9 ph\u00e1p l\u00fd l\u00e0m n\u1ec1n cho C\u00f4ng v\u0103n 12004\/TTPHCM-QLDN3\" width=\"1200\" height=\"675\" srcset=\"https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Can-cu-phap-ly-lam-nen-cho-Cong-van-12004_TTPHCM-QLDN3.jpg 1200w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Can-cu-phap-ly-lam-nen-cho-Cong-van-12004_TTPHCM-QLDN3-300x169.jpg 300w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Can-cu-phap-ly-lam-nen-cho-Cong-van-12004_TTPHCM-QLDN3-1024x576.jpg 1024w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Can-cu-phap-ly-lam-nen-cho-Cong-van-12004_TTPHCM-QLDN3-768x432.jpg 768w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Can-cu-phap-ly-lam-nen-cho-Cong-van-12004_TTPHCM-QLDN3-18x10.jpg 18w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><figcaption id=\"caption-attachment-9722\" class=\"wp-caption-text\">Legal basis for Official Letter 12004\/TTPHCM-QLDN3<\/figcaption><\/figure>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The response in Official Letter 12004\/TTPHCM-QLDN3 is based on four layers of reasoning; accountants need to understand all four to apply it correctly, not just remember the number 10%.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Thu_nhap_chiu_thue_theo_Luat_Thue_thu_nhap_ca_nhan_2025\"><\/span><b>Taxable income under the Personal Income Tax Law 2025<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">According to<\/span><strong><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/thuvienphapluat.vn\/van-ban\/Thue-Phi-Le-Phi\/Luat-Thue-thu-nhap-ca-nhan-2025-so-109-2025-QH15-665870.aspx\" target=\"_blank\" rel=\"noopener\"> Clause 2, Article 3 of the Personal Income Tax Law 2025<\/a><\/span><\/strong><span style=\"font-weight: 400;\">:<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">Taxable income from salaries and wages includes salaries, wages and payments of a similar nature; fees, monetary or non-monetary benefits in any form; and allowances, subsidies, and other income, except for those separately exempted.<\/span><\/p><\/blockquote>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Article 8 of Decree 253\/2026\/ND-CP specifies this regulation, defining income from salaries and wages as including salaries, wages, and other payments of a similar nature that employees receive from employers in any form, whether in cash or in kind, along with other remuneration and benefits.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Khoan_thu_nhap_duoc_mien_thue_lien_quan_den_ngay_phep_chua_nghi\"><\/span><b>Tax-exempt income related to unused vacation days.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">This is the most confusing point when applying Circular 12004\/TTPHCM-QLDN3. Clause 8, Article 4 of the Personal Income Tax Law 2025 stipulates tax exemption for night work wages, overtime pay, and wages paid for days not taken as leave as prescribed by law.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Article 26 of Decree 253\/2026\/ND-CP further clarifies:<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">Tax exemption for wages and salaries paid for non-vacation days only applies when such payments comply with the regulations on wage conditions and levels in Clause 3, Article 113 of the Labor Code. If the payment exceeds the regulations, the excess amount must be included in taxable income.<\/span><\/p><\/blockquote>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Regarding the basis for this payment, Clause 8, Article 113 of the 2019 Labor Code stipulates:<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">In cases of resignation or job loss where the employee has not taken their annual leave or has not used all of their annual leave days, the employer is entitled to pay the employee wages for the unused leave days.<\/span><\/p><\/blockquote>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Nghia_vu_khau_tru_10_khi_chi_tra_cho_nguoi_khong_con_hop_dong_lao_dong\"><\/span><b>The obligation to deduct 10% when paying employees who no longer have an employment contract.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">This is the core content that Official Letter 12004\/TTPHCM-QLDN3 applies to address the practical situation. Clause 2, Article 50 of Decree 253\/2026\/ND-CP stipulates that organizations and individuals paying salaries, wages, fees, and other payments to resident individuals who do not sign a contract or sign a labor contract for less than 3 months, <\/span><b>This includes cases where wages and other income are paid to employees whose employment contracts have been terminated.<\/b><span style=\"font-weight: 400;\">For payments of 5 million VND or more per transaction, tax must be deducted at a rate of 10% on the income before payment to the individual. If the payment is less than 5 million VND per transaction, the deduction is only made upon the individual&#039;s request.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">This clause directly names the case addressed in Official Letter 12004\/TTPHCM-QLDN3: the employee. <\/span><b>contract terminated<\/b><span style=\"font-weight: 400;\"> It is still subject to deduction under Article 10% if the payment reaches the threshold of 5 million VND per transaction, regardless of whether it is outstanding salary, bonus, allowance, or other expenses that are taxable income.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Hieu_luc_ap_dung_theo_Dieu_69_Nghi_dinh_2532026ND-CP\"><\/span><b>Effective date as per Article 69 of Decree 253\/2026\/ND-CP<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Regarding the timeframe, Clause 1, Article 69 of Decree 253\/2026\/ND-CP stipulates that the Decree takes effect from July 1, 2026; however, regulations related to income from business activities, salaries, and wages of resident individuals apply from the 2026 tax year. This is the basis for Official Letter 12004\/TTPHCM-QLDN3 to determine the effective date as July 1, 2026.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Noi_dung_tra_loi_chinh_thuc_tai_Cong_van_12004TTPHCM-QLDN3\"><\/span><b>The official response is contained in Official Letter 12004\/TTPHCM-QLDN3.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<figure id=\"attachment_9723\" aria-describedby=\"caption-attachment-9723\" style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-9723\" src=\"https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Noi-dung-tra-loi-chinh-thuc-tai-Cong-van-12004_TTPHCM-QLDN3.jpg\" alt=\"N\u1ed9i dung tr\u1ea3 l\u1eddi ch\u00ednh th\u1ee9c t\u1ea1i C\u00f4ng v\u0103n 12004\/TTPHCM-QLDN3\" width=\"1200\" height=\"675\" srcset=\"https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Noi-dung-tra-loi-chinh-thuc-tai-Cong-van-12004_TTPHCM-QLDN3.jpg 1200w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Noi-dung-tra-loi-chinh-thuc-tai-Cong-van-12004_TTPHCM-QLDN3-300x169.jpg 300w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Noi-dung-tra-loi-chinh-thuc-tai-Cong-van-12004_TTPHCM-QLDN3-1024x576.jpg 1024w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Noi-dung-tra-loi-chinh-thuc-tai-Cong-van-12004_TTPHCM-QLDN3-768x432.jpg 768w, https:\/\/ketoan.man.net.vn\/wp-content\/uploads\/2026\/09\/Noi-dung-tra-loi-chinh-thuc-tai-Cong-van-12004_TTPHCM-QLDN3-18x10.jpg 18w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><figcaption id=\"caption-attachment-9723\" class=\"wp-caption-text\">The official response is contained in Official Letter 12004\/TTPHCM-QLDN3.<\/figcaption><\/figure>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Based on the aforementioned legal grounds, the Ho Chi Minh City Tax Department responded in Official Letter 12004\/TTPHCM-QLDN3 with two clear principles that businesses can apply immediately:<\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>The first principle regarding the obligation to deduct: <\/b><span style=\"font-weight: 400;\">In cases where a company makes payments of 5 million VND or more in salary or wages to employees after the termination of their employment contract, from July 1, 2026, the company is responsible for deducting personal income tax from the employee at the rate of 10% on the total taxable income from salary and wages, based on Clause 2, Article 50 of Decree 253\/2026\/ND-CP.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>The second principle regarding the exclusions before calculating 10%: <\/b><span style=\"font-weight: 400;\">Payments for non-vacation days, if they comply with the regulations in Clause 3, Article 113 of the Labor Code, along with severance pay and unemployment benefits as prescribed by law, are exempt from personal income tax according to Clause 8, Article 4 of the Personal Income Tax Law and Article 26 of Decree 253\/2026\/ND-CP, meaning they are not included in the taxable income for the purpose of calculating deductions.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">In other words, the overarching spirit of Official Letter 12004\/TTPHCM-QLDN3 is: the deduction of 10% applies to... <\/span><b>total taxable income<\/b><span style=\"font-weight: 400;\">, after clearly separating which income is taxable and which is tax-exempt according to the law, rather than deducting taxes indiscriminately from the entire amount paid.<\/span><\/p>\n<p style=\"text-align: justify;\"><b>The procedures are implemented in accordance with the spirit of Official Letter 12004\/TTPHCM-QLDN3.<\/b><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">To avoid errors when applying Circular 12004\/TTPHCM-QLDN3 to daily operations, the payroll accounting department should follow the following procedure:<\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Step 1 \u2013 Break down the payments: List in detail all payments to be made to the former employee: outstanding salary, unused vacation days, severance pay, unemployment benefits, bonuses or other benefits (if any).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Step 2 \u2013 Verify tax exemption conditions for each item: For payments for unused vacation days, check if the payment amount complies with Clause 3, Article 113 of the Labor Code; if it exceeds the prescribed limit, the excess amount must be included in taxable income according to Clause 3, Article 26 of Decree 253\/2026\/ND-CP. For severance pay or unemployment benefits, verify that the amount is correct according to current labor law regulations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Step 3: Determine the remaining taxable income: After deducting the tax-exempt portion, the remaining amount is the basis for determining the threshold of 5 million VND\/transaction according to Clause 2, Article 50 of Decree 253\/2026\/ND-CP.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Step 4: Withdrawal and Documentation: If the total taxable income is 5 million VND or more per payment, deduct the tax before payment, prepare a tax withholding certificate for the employee, and declare and pay the withheld tax as prescribed. If the total tax is less than 5 million VND per payment and the employee commits to not having the tax withheld, the business must still compile a list and income of these individuals and submit it to the tax authorities using the prescribed form at the end of the tax year.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">For businesses with a high rate of employee terminations or a small accounting staff, standardizing processes from the outset is the most effective way to avoid recurring errors. Many organizations have chosen to do this.<\/span><strong><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/ketoan.man.net.vn\/en\/dich-vu-ke-toan-tron-goi\/\"> full accounting service<\/a><\/span><\/strong><span style=\"font-weight: 400;\"> With the expertise of specialized units like MAN \u2013 Master Accountant Network, the deduction, declaration, and archiving of documents, in accordance with the spirit of Circular 12004\/TTPHCM-QLDN3, are carried out synchronously without interruption when internal personnel rotate.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Vi_du_minh_hoa_cach_ap_dung_Cong_van_12004TTPHCM-QLDN3\"><\/span><b>Example illustrating how to apply Official Letter 12004\/TTPHCM-QLDN3<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Ms. H. resigned from Company B in August 2026. In September 2026, the company paid Ms. H. the remaining amounts, including:<\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unpaid August salary (12 million VND);<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Compensation for 6 days of unused leave as per Clause 3, Article 113 of the Labor Code (4 million VND);<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">And severance pay in accordance with labor law regulations (10 million VND).<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">According to the Official Letter, the unused leave pay (4 million VND) and severance pay (10 million VND) are exempt from personal income tax and are not included in taxable income. However, the unpaid August salary (12 million VND) is taxable income, reaching the threshold of 5 million VND or more per payment, so the company must deduct 1.2 million VND before paying Ms. H.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The example above illustrates the key point when applying this: Do not deduct 10%. <\/span><b>the entire amount<\/b><span style=\"font-weight: 400;\"> one-time payment, which is only deducted from <\/span><b>taxable income<\/b><span style=\"font-weight: 400;\"> after excluding tax exemptions as required by law.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Nhung_sai_sot_doanh_nghiep_thuong_gap\"><\/span><b>Common business mistakes<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Here are some common accounting mistakes made by businesses:<\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The most common misconception is that withholding tax is not applicable because the employee has left the job. Clause 2 of Article 50 of Decree 253\/2026\/ND-CP clearly states that the obligation to withhold tax applies even when paying income to employees whose employment contracts have been terminated.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Deduction 10% on the entire amount paid, including the tax-exempt portion: Including severance pay and unused leave pay in taxable income for deduction calculation results in over-deduction for employees, contrary to the spirit of Official Letter 12004\/TTPHCM-QLDN3.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Do not compare the vacation pay rate with Clause 3, Article 113 of the Labor Code: If the company pays more than the legally stipulated rate for unused vacation days, the excess amount must be included in taxable income according to Article 26 of Decree 253\/2026\/ND-CP, and is not exempt from full tax.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Failure to compile a list of individuals below the deduction threshold: Even if the payment is less than 5 million VND per transaction and no deduction is made as per the employee&#039;s commitment, the business is still obligated to compile and submit a list to the tax authorities at the end of the tax year.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Vi_sao_doanh_nghiep_nen_ra_soat_lai_quy_trinh_chi_tra_cho_lao_dong_nghi_viec_ngay_tu_bay_gio\"><\/span><b>Why businesses should review their severance pay processes now.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Circular 12004\/TTPHCM-QLDN3, while addressing only a specific situation, reflects a general trend: tax authorities are tightening checks on deduction obligations for payments made after the termination of employment contracts, a group of transactions previously often overlooked in the standard timekeeping and payroll calculation process.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">For businesses with significant employee turnover, proactively updating procedures in accordance with Circular 12004\/TTPHCM-QLDN3 not only helps avoid the risk of tax arrears and late payment penalties, but also protects the legitimate rights of employees by ensuring they receive their tax-exempt income as stipulated by law. If a business is unsure about how to separate taxable or tax-exempt income for each specific case, it should proactively seek advice from a relevant agency.<\/span><strong><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/ketoan.man.net.vn\/en\/tu-van-dich-vu-ke-toan\/\"> accounting consulting services<\/a><\/span><\/strong><span style=\"font-weight: 400;\"> This allows for review before payments are made, instead of waiting until settlement or inspection to discover errors.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Ket_luan\"><\/span><b>Conclude<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Circular 12004\/TTPHCM-QLDN3 summarizes two key points that payroll accountants need to remember:<\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Firstly, the obligation to deduct tax on taxable income (10%) applies to payments to employees whose contracts have been terminated, provided that the amount is 5 million VND or more per payment;<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Secondly, before calculating deductions, it is necessary to correctly exclude amounts that are exempt from tax according to the law, including money for unused vacation days and legitimate severance pay or unemployment benefits.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Applying the spirit of the Official Letter correctly from the payroll calculation stage helps businesses avoid two risks: under-deducting taxes leading to retroactive collection, and over-deducting taxes causing losses to employees. For businesses wanting to reduce the workload of payroll and personal income tax for internal departments, this solution...<\/span><strong><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/ketoan.man.net.vn\/en\/thue-dich-vu-ke-toan-ngoai\/\"> outsource accounting services<\/a><\/span><\/strong><span style=\"font-weight: 400;\"> This is a worthwhile option to ensure that all payments to laid-off workers are handled properly from the outset.<\/span><\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/ketoan.man.net.vn\/en\/lien-he\/\"><span style=\"font-weight: 400;\"><strong><span style=\"color: #0000ff;\">Contact MAN \u2013 Master Accountant Network<\/span><\/strong><\/span><\/a><span style=\"font-weight: 400;\"> For timely advice and support!<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Thong_tin_lien_he_MAN_%E2%80%93_Master_Accountant_Network\"><\/span><b>Contact information MAN \u2013 Master Accountant Network<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Address:<\/b><span style=\"font-weight: 400;\"> No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Mobile\/Zalo:<\/b><span style=\"font-weight: 400;\"> 0903 963 163 \u2013 0903 428 622<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>E-mail:<\/b><span style=\"font-weight: 400;\"> man@man.net.vn<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Google Business Profile:<\/b> <strong><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/share.google\/EmihzHg354pCASC9k\" target=\"_blank\" rel=\"noopener\">View MAN \u2013 Master Accountant Network&#039;s Google Business Profile\u00a0<\/a><\/span><\/strong><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>LinkedIn Founder:<\/b> <a href=\"https:\/\/www.linkedin.com\/in\/tuy%C3%AAn-l%C3%AA-ho%C3%A0ng-65292aa0\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\"><strong><span style=\"color: #0000ff;\">View expert Le Hoang Tuyen&#039;s LinkedIn profile.<\/span><\/strong>\u00a0<\/span><\/a><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Responsible for production and professional content review by: Mr. <\/span><strong><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/man.net.vn\/le-hoang-tuyen\/\" target=\"_blank\" rel=\"noopener\">Le Hoang Tuyen \u2013 Founder &amp; CEO of MAN \u2013 Master Accountant Network<\/a><\/span><\/strong><span style=\"font-weight: 400;\">He is a CPA Vietnam auditor with over 30 years of in-depth experience in accounting, auditing, taxation, and corporate legal consulting.<\/span><\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Cau_hoi_thuong_gap_ve_Cong_van_12004TTPHCM-QLDN3\"><\/span><b>Frequently Asked Questions about Official Document 12004\/TTPHCM-QLDN3<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Nguoi_lao_dong_da_nghi_viec_thi_cong_ty_co_phai_khau_tru_thue_TNCN_khi_tra_luong_con_no_khong\"><\/span><b>If an employee has left the company, is the company still required to deduct personal income tax when paying outstanding wages?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Yes. According to Official Letter 12004\/TTPHCM-QLDN3 and Clause 2, Article 50 of Decree 253\/2026\/ND-CP, if the payment is 5 million VND or more per payment to an employee whose employment contract has been terminated, the company must deduct tax on the taxable income before making the payment.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Tro_cap_thoi_viec_co_bi_tinh_vao_thu_nhap_chiu_thue_de_khau_tru_10_khong\"><\/span><b>Are severance pay payments included in taxable income for the purpose of deducting tax under form 10%?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">No. Severance pay and unemployment benefits, as stipulated by law, are exempt from personal income tax according to Clause 8, Article 4 of the Personal Income Tax Law 2025 and Article 26 of Decree 253\/2026\/ND-CP.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Tien_nhung_ngay_phep_chua_nghi_khi_thoi_viec_co_duoc_mien_thue_toan_bo_khong\"><\/span><b>Are unused vacation days paid upon termination of employment fully tax-exempt?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The exemption is only granted if the payment amount complies with the provisions of Clause 3, Article 113 of the Labor Code. Any payment exceeding the prescribed amount must be included in taxable income.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Muc_chi_tra_duoi_5_trieu_donglan_cho_lao_dong_nghi_viec_co_phai_khau_tru_thue_khong\"><\/span><b>Is a severance payment of less than 5 million VND subject to tax deduction?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">It is not mandatory; deductions are only made upon individual request. However, businesses must still compile a list and income of these individuals and submit it to the tax authorities at the end of the tax year.<\/span><\/p>\n<h3 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Cong_van_12004TTPHCM-QLDN3_ap_dung_tu_thoi_diem_nao\"><\/span><b>From what date does Official Document 12004\/TTPHCM-QLDN3 come into effect?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The deduction content 10% applies to payments made from July 1, 2026, as effective from Decree 253\/2026\/ND-CP, as stipulated in Clause 1, Article 69 of this Decree.<\/span><\/p>","protected":false},"excerpt":{"rendered":"<p>\u00a0C\u00f4ng v\u0103n 12004\/TTPHCM-QLDN3 l\u00e0 v\u0103n b\u1ea3n tr\u1ea3 l\u1eddi ch\u00ednh th\u1ee9c c\u1ee7a Thu\u1ebf Th\u00e0nh ph\u1ed1 H\u1ed3 Ch\u00ed Minh, gi\u1ea3i quy\u1ebft m\u1ed9t t\u00ecnh hu\u1ed1ng m\u00e0 h\u1ea7u nh\u01b0 k\u1ebf to\u00e1n ti\u1ec1n l\u01b0\u01a1ng n\u00e0o c\u0169ng g\u1eb7p: chi tr\u1ea3 ti\u1ec1n l\u01b0\u01a1ng, tr\u1ee3 c\u1ea5p cho ng\u01b0\u1eddi lao \u0111\u1ed9ng sau khi h\u1ecd \u0111\u00e3 ngh\u1ec9 vi\u1ec7c th\u00ec c\u00f3 ph\u1ea3i kh\u1ea5u tr\u1eeb thu\u1ebf thu [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":9721,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-9720","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/posts\/9720","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/comments?post=9720"}],"version-history":[{"count":1,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/posts\/9720\/revisions"}],"predecessor-version":[{"id":9724,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/posts\/9720\/revisions\/9724"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/media\/9721"}],"wp:attachment":[{"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/media?parent=9720"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/categories?post=9720"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ketoan.man.net.vn\/en\/wp-json\/wp\/v2\/tags?post=9720"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}