The Ministry of Finance (MoF) issued on the 31st December 2024 the decision # 1311/1 in application of the article 90 of the 2024 Budget Law # 324, that extended the deadline set in the article 36 of the Budget Law of the year 2022. Accordingly, the Severance pay or Termination compensations paid to dismissed or resigned employees during the period from 15th February 2024 until 31st December 2025 are exempted from tax on salaries and are considered as tax deductible expenses to the employer subject to income tax on the basis of actual profits, even if they exceed the ceiling defined by the applicable laws.
Knowing that the article 36 of the Budget Law of the year 2022 exempted from tax on salaries the termination compensations paid to dismissed or resigned employees during the period from 1st July 2019 till 30th September 2022, the period between the 1st October 2022 and the 14th February 2024 as well as any payment of severance pay from the 1st January 2026 are not covered by this tax exemption.