Do high pension recipients have to pay personal income tax in Vietnam?
Do high pension recipients have to pay personal income tax in Vietnam?
Based on the provisions in Article 4 of the 2007 Personal Income Tax Law (amended by Clause 2, Article 1 of the 2012 Amended Personal Income Tax Law and supplemented by Clause 3, Article 2 of the 2014 Law on Amending Taxes) regarding tax-exempt incomes, include:
Tax-Exempt Income
1. Income from the transfer of real estate between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; grandparents and grandchildren; brothers and sisters to each other.
2. Income from the transfer of residential housing, homestead land use rights, and assets attached to homestead land of individuals in cases where individuals have only one house or one homestead land.
3. Income from the value of land use rights of individuals allocated land by the State.
4. Income from inheritance and gifts of real estate between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law; parents-in-law and sons-in-law; grandparents and grandchildren; brothers and sisters to each other.
5. Income of households and individuals directly engaged in agricultural production, forestry, salt-making, aquaculture, and fishing that have not been processed into other products or only through normal preliminary processing.
6. Income from the conversion of agricultural land by households and individuals allocated land by the State for production.
7. Income from interest on deposits at credit institutions and interest from life insurance contracts.
8. Income from remittances.
9. Part of night shift or overtime salary that is higher than the daily salary or within working hours as prescribed by law.
10. Pension paid by the Social Insurance Fund; pension paid by a voluntary retirement fund on a monthly basis.
11. Income from scholarships, including:
a) Scholarships received from the state budget;
b) Scholarships received from domestic and foreign organizations according to their scholarship support programs.
12. Income from life insurance contracts, non-life insurance, labor accident compensation, state compensation, and other compensations as prescribed by law.
13. Income received from charities permitted to be established or recognized by competent state agencies, operating for charitable, humanitarian purposes, not for profit.
14. Income received from foreign aid for charitable, humanitarian purposes in the form of government and non-government approved by competent state agencies.
15. Income from wages and salaries of Vietnamese seafarers working for foreign shipping companies or international shipping companies in Vietnam.
16. Income of individuals who are shipowners, individuals having the right to use a ship, and individuals working on a ship from providing goods and services directly serving offshore fisheries exploitation and fishing.
Thus, pensions are income that is exempt from personal income tax, regardless of whether they are low or high. However, in cases where a retiree continues to work and earns income from such work, they are still required to pay personal income tax on income from wages and salaries.
Do high pension recipients have to pay personal income tax in Vietnam? (Image from the Internet)
Which income from wages and salaries of a retiree is subject to personal income tax in Vietnam?
Based on the provisions in Clause 2, Article 3 of the 2007 Personal Income Tax Law, amended by Clause 1, Article 1 of the 2012 Amended Personal Income Tax Law, regarding income from wages and salaries of retirees subject to personal income tax is as follows:
(1) Wages, salaries, and income of a salary or wage nature;
(2) Allowances, subsidies, except for the following:
- Allowances and subsidies as prescribed by law on preferential treatment for people with meritorious services;
- National defense and security allowances;
- Allowances for dangerous or hazardous work environments;
- Attraction allowances and regional allowances as prescribed by law;
- Unexpected hardship allowances, occupational accident and disease allowances, one-time childbirth or adoption allowances, reduced work capacity allowances, one-time retirement allowances, monthly survivor benefits, and other allowances as prescribed by social insurance law;
- Severance and unemployment allowances as prescribed by the Labor Code;
- Social protection allowances and other allowances and subsidies not of a salary or wage nature as prescribed by the Government of Vietnam.
How many years of compulsory social insurance contribution are required to receive a pension in Vietnam in 2024?
Based on the provisions in Article 54 of the 2014 Social Insurance Law (amended by Point a, Clause 1, Article 219 of the 2019 Labor Code) regarding conditions for receiving a pension in 2024 for participants in compulsory social insurance as follows:
Retirement Conditions
1. Employees specified at points a, b, c, d, g, h, and i, Clause 1, Article 2 of this Law, except for cases specified in Clause 3 of this Article, upon termination of employment having paid social insurance contributions for 20 years or more are eligible for pension if they meet one of the following conditions:
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2. Employees specified at point đ and point e, Clause 1, Article 2 of this Law, upon termination of employment having paid social insurance contributions for 20 years or more are eligible for a pension if they meet one of the following conditions:
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3. Female workers who are officials at commune level or part-time workers at a commune, ward, or commune-level town who participate in social insurance, upon termination of employment having paid social insurance contributions for between 15 and under 20 years and reaching retirement age as prescribed in Clause 2 of Article 169 of the Labor Code, are eligible for a pension.
4. Conditions on retirement age for certain special cases as prescribed by the Government of Vietnam.
Thus, based on the aforementioned provisions, to be eligible for a pension in 2024, workers need to meet conditions regarding retirement age as well as the number of years of social insurance contributions.
Specifically, the number of years of social insurance contributions to be eligible for a pension is as follows:
- The number of years of social insurance contributions is at least 20 years for both men and women.
- For female workers who are officials at commune level or part-time workers at a commune, ward, or commune-level town, between 15 and under 20 years of social insurance contributions and reaching the retirement age as prescribed in Clause 2, Article 169 of the 2019 Labor Code are eligible for a pension.
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