Official Dispatch 223: MobiFone to be transferred to the Ministry of Public Security of Vietnam

Official Dispatch 223: MobiFone to be transferred to the Ministry of Public Security of Vietnam

On February 27, 2025, the Prime Minister of the Government of Vietnam issued Official Dispatch 223/TTg-DMDN for the year 2025 regarding the transfer of the ownership representation of state capital at the MobiFone Telecommunications Corporation from the Committee for the Management of State Capital at Enterprises to the Ministry of Public Security.

Download Official Dispatch 223/TTg-DMDN for the year 2025 concerning the transfer of MobiFone to the Ministry of Public Security

Upon considering the proposal from the Committee for the Management of State Capital at Enterprises regarding the transfer of the ownership representation of state capital at the MobiFone Telecommunications Corporation from the Committee to the Ministry of Public Security, based on conclusions and directions from authorized levels, the Deputy Prime Minister of the Government of Vietnam has the following opinion:

Approval of the policy to transfer the ownership representation of state capital at the MobiFone Telecommunications Corporation from the Committee for the Management of State Capital at Enterprises to the Ministry of Public Security. The Committee is responsible for the content of the report and proposal.

The Committee for the Management of State Capital at Enterprises and the Ministry of Public Security shall implement the transfer of ownership representation of state capital at the MobiFone Telecommunications Corporation in accordance with the provisions of Decree 23/2022/ND-CP and the directives of the Politburo and the Government's Steering Committee.

>>> View the full text of Official Dispatch 223/TTg-DMDN for the year 2025 here

Official Dispatch 223: MobiFone to be transferred to the Ministry of Public Security of Vietnam (Image from the Internet)

Vietnam: Shall employees whose employment contracts are terminated be provided with severance allowances when carrying out transfer?

Based on Clause 2, Article 53 of Decree 23/2022/ND-CP which stipulates policies towards employees in enterprises during the transfer process as follows:

Policies for employees when carrying out transfer

1. The transferring enterprise shall compile a list of all current employees, a list of employees continuing to work after the transfer, a list of employees to be retrained to continue working after the transfer, a list of retirees, and a list of employees who must terminate their employment contract.

2. Employees terminating their employment contract are entitled to severance or job loss allowances as per labor law regulations.

3. Employees eligible for a pension are to be handled according to social insurance law and other benefits as prescribed by labor law.

Thus, employees terminating their employment contract due to enterprise transfer are entitled to receive severance allowances according to labor law regulations.

Is severance allowance subject to personal income tax in Vietnam?

According to point b.6, clause 2, Article 2 of Circular 111/2013/TT-BTC, the regulations are as follows:

Taxable Income

According to Article 3 of the Law on Personal Income Tax and Article 3 of Decree 65/2013/ND-CP, taxable personal income includes:

...

2. Income from wages and salaries

Income from wages and salaries is what employees receive from employers, including:

...

b) Various allowances and subsidies, except for the following:

...

b.6) Sudden hardship allowances, work accident allowances, occupational disease allowances, one-time allowances for childbirth or adoption, maternity benefits, recuperation and health recovery benefits post-maternity, allowances due to reduced work capacity, one-time pension allowances, monthly compensation, severance allowance, job loss allowances, unemployment benefits, and other allowances as stipulated by the Labor Code and the Social Insurance Law.

...

Hence, according to the above regulation, severance allowance is not considered taxable personal income, and thus, severance allowance in all cases, including organizational streamlining, is not subject to personal income tax.

How to determine personal income tax period in Vietnam?

Based on the provisions of Article 7 of the Law on Personal Income Tax 2007 (amended and supplemented by clause 3, Article 1 of the Law on Amendments to the Law on Personal Income Tax 2012), the personal income tax period is determined as follows:

(1) The tax period for resident individuals is as follows:

- An annual tax period applies to income from business; income from wages and salaries;

- A tax period per income occurrence applies to income from capital investment; income from transfer of capital, except income from securities transfer; income from real estate transfer; winnings; royalties; franchising; inheritance; gifts;

- A tax period per transfer or annually for income from securities transfer.

(2) The tax period for non-resident individuals is determined per income occurrence for all taxable income.