Guidance on the personal income tax policy for deceased employee

In case the indefinite labor contract between the Company and the employee expires due to the employee's death, the finalization of PIT from the employee's income from wages and remunerations in 2020 is determined as follows:

For the severance allowance, special support, ... paid by the Company after the employee's death, they are not the employee's income from wages and remunerations, but instead income from inheritance in accordance with the law. A person who is entitled to receive this part of the inheritance upon receiving severance allowances and special monetary benefits paid by the Company is not obliged to declare PIT on inheritance income due to this amount is not an object to pay personal income tax in accordance with Clause 9, Article 2, Circular No.111/2013.

Pursuant to the provisions of Clause 1, Article 43 of Circular 156/2013, the person who receives  the inheritance according to the law of the deceased employee is responsible for declaring the 2020 PIT finalization and paying PIT still have to pay (if any) or get a refund of the overpaid PIT amount of the deceased within the estate left by the deceased and only calculate PIT on the income from wages and remunerations that the individual actually received when he is alive.

In case when the employee is alive, the employee only has income at the Company and if there is authorization for the finalization of PIT of the beneficiary of the inheritance, the Company shall make the final settlement of PIT in 2020 for the dead according to regulations.