Circular of the State Administration of Taxation on Issues concerning the Imposition of Individual Income Tax on Economic Compensation Received by Individuals Due to Termination of Labor Contracts

Circular of the State Administration of Taxation on Issues concerning the Imposition of Individual Income Tax on Economic Compensation Received by Individuals Due to Termination of Labor Contracts

Guo Shui Fa [1999] No.178

September 23, 1999

Recently, several requests have been received asking for clarification on issues concerning the policies of imposing the individual income tax on lump-sum economic compensation paid to employees that were dismissed due to cancellation of labor contracts by enterprises during the process of reorganization, reform, or downsizing- for-efficiency.
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