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A query was raised regarding whether the exemption from severance pay remains valid if a dismissed employee is rehired after 21 months. The DGT has ruled that re-hiring within a three-year period creates a presumption that no real termination of the employment relationship occurred.
Companies re-hiring former employees within a three-year window may lose the tax exemption on severance payments, as the authorities may deem the dismissal to have been non-effective.
The tax team reviews your specific situation.
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