What are regulations on time limit for resignation policies in Vietnam according to Decree 178? Is severance allowance subject to personal income tax in Vietnam?
What are regulations on time limit for resignation policies in Vietnam according to Decree 178?
The Ministry of Finance issued Official Dispatch 1767/BTC-TCCB in 2025 to provide guidance on implementing the policy for early retirement and resignation according to the provisions of Decree 178/2024/ND-CP, applicable to organizations and units under and directly administered by the Ministry of Finance.
Based on sub-item 5, Section III of Official Dispatch 1767/BTC-TCCB in 2025, the timelines and process for resignation policies matters are as follows:
The resolution of the resignation policy is conducted monthly. Specifically:
- Before the 1st of each month, units must submit a list and dossiers for cases requesting early retirement or resignation for the following month to units responsible for appraisal tasks (units advising on human resources and financial affairs).
- Within 10 days, the unit advising on human resources must complete the appraisal regarding the subject for cases with complete dossiers and send a document to the unit advising on financial affairs for budget appraisal.
- Within 5 days from receiving the appraisal document from the human resources advisory unit, the financial advisory units must complete the budget appraisal and send the appraisal document back to the human resources advisory unit for aggregation.
- Within 2 days from receiving the budget appraisal document, the human resources advisory unit aggregates and submits to the competent authority for approval.
What are regulations on time limit for resignation policies in Vietnam according to Decree 178? Is severance allowance subject to personal income tax in Vietnam? (Image from Internet)
What are the conditions and criteria for resignation policies in Vietnam?
According to Section II of Official Dispatch 1767/BTC-TCCB in 2025, the conditions and criteria for resignation policies are guided as follows:
(1) Compulsory Resignation Subjects: The evaluation criteria to determine subjects required to resign are as follows:
Failing to meet the requirements for the evaluation criteria specified in Clauses 1, 2, 3, Article 6 of Decree 178/2024/ND-CP.
(Specific evaluation criteria will be guided by the Ministry of Finance in another document).
(2) Voluntary Resignation Subjects: officials and public employees, and workers with a voluntary application for early retirement or resignation meet one of the following conditions:
- Early retirement due to remaining work time being 10 years or less until retirement age as specified in Appendix I attached to Decree 135/2020/ND-CP, or 5 years or less until retirement age as specified in Appendix II attached to Decree 135/2020/ND-CP and having sufficient working time contributing to compulsory social insurance to be eligible for a pension under the Law on Social Insurance.
- Resignation when meeting one of the following conditions:
+ Civil servants, public employees holding leadership positions, managers at units with a surplus number of leaders, managers compared to regulations of the Communist Party, the State, or officials, and public employees holding leadership positions, managers at units after reorganization hold lower leadership, management positions or cease to hold leadership, management positions post-reorganization.
+ Civil servants, public employees, and workers in the past two years rated task performance below completion (except for cases with two consecutive years rated as not completing tasks).
+ Civil servants, public employees, and workers in the preceding year or in the year of policy consideration have the total number of working days off due to illness with confirmation from the Social Insurance agency eligible for illness allowance under current regulations equal to or exceeding the maximum days off due to illness as specified by the Law on Social Insurance or having illnesses in the list of prolonged treatment diseases under the Social Insurance Law.
+ Cases due to legal changes leading to not meeting the level, professional training required for job positions, official rank standards, professional title standards of public employees, leadership criteria, management standards, having been arranged to another job position but choosing voluntary resignation.
+ Some other conditions specific to the unit (if any). Heads of units with vertical organizational structures, the State Securities Commission, public service providers under the Ministry of Finance should provide specific guidance on peculiar conditions in the system of units to serve as a basis to identify eligible policy subjects.
In cases where all the above-mentioned cases have been reviewed and arranged but are still insufficient to reduce officials and public employees as required by competent authorities, if other individuals have aspirations, justifiable reasons, and meet requirements per regulations of the Communist Party, the State, the agencies, organizations, and direct employers of officials and public employees must report to the competent authorities for approval of early retirement, resignation according to decentralized assessments and decisions.
Is severance allowance subject to personal income tax in Vietnam?
Based on point b.6, clause 2, Article 2 of Circular 111/2013/TT-BTC stipulating as follows:
Taxable Incomes
According to Article 3 of the Law on Personal Income Tax and Article 3 of Decree No. 65/2013/ND-CP, taxable incomes include personal income tax as follows:
...
- Income from Salaries and Wages
Income from salaries and wages is income that employees receive from the employer, including:
...
b) Allowances, supports, excluding the following allowances and supports:
...
b.6) Emergency hardship allowances, work accident allowances, occupational disease benefits, lump-sum childbirth or adoption benefits, maternity benefit policies level, health recovery sustenance post-maternity, allowances due to reduced work capacity, lump-sum pension allowance, monthly funeral allowance, severance allowance, job loss allowance, unemployment allowance, and other allowances according to the Labor Code and the Law on Social Insurance.
...
Thus, under the above regulations, severance allowance is not included in taxable personal income, so severance allowance in all cases, including streamlining the apparatus, will not be subject to personal income tax.
