Certain Minimum Severance Payments Now Exempt from Income Tax
27 March 2012
From 1 January 2012, certain minimum contractual severance payments to employees in case of termination of an employment contract are not subject to individual income tax. The exemption applies to payments not exceeding in total three times the average monthly salary (six times for regions of the Far North and equivalent locations). Such payments include: compensation to the CEO, deputy CEO, or chief accountant of an organization; severance pay for all employees; and average monthly payments for the period of unemployment.