Xinhua News Agency, Beijing, June 26th Question: Do you have to pay a 3% tax to receive a pension? These three problems need to be clarified.
Xinhua News Agency reporters Jiang Lin and Shen Cheng
"When an individual pension is received, personal income tax is paid at 3% of the amount received, regardless of the principal and investment income." A policy message recently released by the Ministry of Human Resources and Social Security has aroused widespread concern in society. How to understand the relevant policies? Does this mean that everyone has to pay a 3% tax to receive pensions?
This "gold" is not another "gold", and the basic pension received after retirement is not subject to tax.
First of all, it needs to be clear that what we usually call pensions and personal pensions are not the same thing.
The old-age pension we usually talk about belongs to the basic old-age insurance system of the country. It is the pension money that the insured urban workers and urban and rural residents can receive on a monthly basis after reaching the legal retirement age and meeting the payment period.
Personal pension refers to the system of government policy support, individual voluntary participation and market-oriented operation, which was only implemented in 2022. Individuals can deposit a sum of money in a specific account, not exceeding 12,000 yuan per year, as a supplement to the basic old-age insurance, and have another source of pension when they retire.
From the perspective of taxation, the basic pension is not taxed. According to the individual income tax law, the basic pension or retirement fee, retirement fee and retirement living allowance paid to cadres and workers in accordance with the unified provisions of the state are exempt from individual income tax.
The staff of the 12366 tax payment service hotline of the Beijing Municipal Taxation Bureau also clearly responded that the basic pension that everyone receives every month after retirement, that is, the pension that everyone said, does not need to pay personal income tax. Therefore, you don’t have to worry that the basic pension you get after retirement will "shrink".
Paying 3% tax on personal pension is not a new policy, and it has been implemented for more than three years.
Different from the basic pension tax exemption, personal pension needs to pay 3% personal income tax when it is received. However, this is not a new policy. According to the announcement previously issued by the Ministry of Finance and State Taxation Administration of The People’s Republic of China, since January 1, 2022, the preferential policy of deferred tax payment will be implemented for individual pensions.
That is to say, at the time of payment, the individual’s contribution to the personal pension fund account is not subject to individual tax for the time being, and is deducted from the comprehensive income or operating income according to the limit standard of 12,000 yuan/year. Participants can declare the deduction by scanning the QR code on the payment voucher with the "Personal Income Tax" App.
"When the personal pension generates investment income in the middle year, it is not necessary to pay a tax for the time being until it is finally collected. Moreover, in terms of tax rate, the individual tax rate has seven excessive progressive tax rates ranging from 3% to 45%, but the personal pension is subject to the lowest tax rate of 3%, which reflects the preferential policies and support. " He Daixin, director of the Finance Research Office of the Institute of Finance and Economics of China Academy of Social Sciences, said.
He Daixin said that in order to give consideration to incentives and fairness, and prevent some people from avoiding taxes and enjoying too many concessions, the personal pension is currently limited to 12,000 yuan per year. Internationally, the individual retirement account system in relevant countries has also set the upper limit of the annual payment.
For different income groups, the degree of personal pension benefits is different.
Many people wonder that although individual pensions enjoy tax incentives when they are purchased, they should be taxed at 3% when they are received. Is this "one in and one out" still cost-effective? Experts say that personal pensions have different effects on different income groups.
Take a participant who is 34 years old and has an annual income of about 200,000 yuan before tax as an example, and the corresponding marginal tax rate is 10%. Considering that you have to pay 3% tax in the end, if you save 12,000 yuan a year, you can probably earn more than 800 yuan, excluding the income from buying products. The higher the income and the higher the tax rate, the more cost-effective it will be to buy personal pension. For low-income groups, it may not be cost-effective to participate in the personal pension plan if the salary has not reached the tax threshold of 5,000 yuan per month.
The reporter noticed that at present, all major bank apps have special personal pension "calculators", and everyone can calculate according to their own income. In addition to the difference between tax saving and tax payment, participants can also get long-term investment income if they buy financial products properly.
The data shows that as of the end of November last year, the number of individual pension accounts in China exceeded 70 million, with most of the participants aged 30 to 40, and some of them opened accounts near retirement age.
According to the reporter’s understanding, the Ministry of Human Resources and Social Security is working with relevant departments to study and formulate relevant support policies for personal pensions, further enhance the attractiveness of the personal pension system, guide more qualified people to participate, and make the life of the elderly more secure.