Is there a plan to pay 02 months of pension before the 2025 Tet holiday in Vietnam? Is pension subject to personal income tax in Vietnam?

Is there a plan to pay 02 months of pension before the 2025 Tet holiday in Vietnam?

Based on Section 27 of the Appendix issued with Resolution 233/NQ-CP of 2024 on the November 2024 monthly session of the Government of Vietnam, the Government of Vietnam has specifically assigned tasks to Vietnam Social Security as follows:

Vietnam Social Security is tasked with sustainably expanding the coverage of social insurance and health insurance; considering within its authority the organization of the payment of pensions for 02 months (January and February of 2025), and social insurance benefits in the same payment period of January 2025, to facilitate the public in joyfully celebrating the Lunar New Year of the Year of the Snake 2025; closely coordinating with agencies and localities affected by storm No. 3 to promptly complete tasks and solutions to mitigate the storm's effects, contributing to stabilizing the people's lives.

Thus, it is anticipated that Vietnam Social Security will organize the cumulative payment of two months' pensions (January and February 2025) before the 2025 Tet holiday to enable the citizens to joyfully celebrate the Lunar New Year of the Year of the Snake 2025.

To be specific:, the payment of two months' pension and social insurance benefits will be implemented in the same payment period of January 2025. This means that pensioners will receive a total of two months' pension in a single payment.

Is there a plan to pay 02 months of pension before the 2025 Tet holiday in Vietnam? Is pension subject to personal income tax in Vietnam? (Image from the Internet)

Is pension subject to personal income tax in Vietnam?

Based on Clause 10, Article 4 of the Law on Personal Income Tax 2007 (supplemented by Clause 3, Article 2 of the 2014 Amended Tax Laws; amended by Clause 2, Article 1 of the 2012 Amended Personal Income Tax Law), stipulations on tax-exempt income are as follows:

Tax-Exempt Income

...

5. Income of households and individuals directly engaged in agriculture, forestry, salt production, aquaculture or fisheries that have not been processed into other products or only through ordinary preliminary processing.

6. Income from conversion of agricultural land allocated by the State for production by households and individuals.

7. Income from interest on savings deposits at credit institutions, interest from life insurance contracts.

8. Income from remittances.

9. Night shift pay, overtime pay higher than the day shift pay, as regulated by the law.

10. Pension paid by the Social Insurance Fund; pension paid by the 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 the study encouragement support programs of such organizations.

...

Therefore, under the above regulation, pensions are subject to personal income tax exemption.

Which entities are personal income taxpayers in Vietnam?

Pursuant to the provisions of Article 2 of the Law on Personal Income Tax 2007, regulations are as follows:

Tax Payers

1. Personal income tax payers are resident individuals with taxable income as stipulated in Article 3 of this Law arising within and outside the territory of Vietnam and non-resident individuals with taxable income as stipulated in Article 3 of this Law arising within the territory of Vietnam.

2. A resident individual is one who meets one of the following conditions:

a) Being present in Vietnam for 183 days or more within a calendar year or 12 consecutive months from the day of first arrival in Vietnam;

b) Having a regular residence in Vietnam, including having a registered permanent residence or a leased house to reside in Vietnam as per a leased contract of a term.

3. A non-resident individual is one who does not meet the conditions specified in Clause 2 of this Article.

Thus, as per the aforementioned regulations, those subject to personal income tax include resident individuals with taxable income as specified in Article 3 of the Law on Personal Income Tax 2007 arising within and outside the territory of Vietnam, and non-resident individuals with taxable income specified in Article 3 of the Law on Personal Income Tax 2007 arising within the territory of Vietnam.

- A resident individual is one who meets one of the following conditions:

+ Being present in Vietnam for 183 days or more within a calendar year or 12 consecutive months from the day of first arrival in Vietnam;

+ Having a regular residence in Vietnam, including having a registered permanent residence or a leased house to reside in Vietnam as per a leased contract of a term.

- A non-resident individual is one who does not meet the following condition:

+ Being present in Vietnam for 183 days or more within a calendar year or 12 consecutive months from the day of first arrival in Vietnam;

+ Having a regular residence in Vietnam, including having a registered permanent residence or a leased house to reside in Vietnam as per a leased contract of a term.