Vietnam: Official Dispatch 4791 on the lump-sum payment of 2 months' pension before the 2025 Tet holiday promulgated? Are pensions taxable in Vietnam?

Vietnam: Official Dispatch 4791 on the lump-sum payment of 2 months' pension before the 2025 Tet holiday promulgated?

On December 20, 2024, Vietnam Social Security issued Official Dispatch 4791/BHXH-TCKT of 2024...Download, concerning the payment of pension and social insurance benefits for January and February 2025.

The specific contents of Official Dispatch 4791/BHXH-TCKT of 2024 are as follows:

(1) Vietnam Social Security allocates funds to pay pensions and social insurance benefits for January and February 2025 to social insurance agencies in provinces and centrally-managed cities (collectively referred to as provincial social insurance) during the payment period for pensions and social insurance benefits in January 2025 (including those receiving through cash and personal accounts).

(2) Provincial social insurance is required to implement the following actions:

- Report to the local party committee and government on the plan to pay pensions and social insurance benefits for January and February 2025 during the same payment period as January 2025.

- Implement monthly pension and social insurance benefit payments via personal accounts for recipients for January and February 2025 during the January 2025 payment period, ensuring full and prompt payment for beneficiaries.

- Based on the fund allocation plan from Vietnam Social Security, transfer funds to the provincial post office to promptly execute cash payments for monthly pension and social insurance benefits for January and February following the guidance of Vietnam Social Security.

- Coordinate with the postal agency to inform beneficiaries of the payment schedule for January and February 2025 during the January 2025 payment period.

- Strengthen inspection and supervision of the payment process to beneficiaries, and promptly coordinate to resolve and address any issues arising during implementation.

(3) Vietnam Post Corporation directs its subordinate units to cooperate with social insurance agencies to develop a plan for monthly pension and social insurance benefit payments for January and February 2025 within the January 2025 payment period, providing the most convenient conditions for beneficiaries during the Lunar New Year; organize home payments for the elderly, lonely, sick, or incapacitated who cannot collect their payments at designated points; conduct communication and notify monthly pension and social insurance beneficiaries about the lump-sum payment mentioned above.

Thus, pensions for January and February 2025 will be paid in a lump sum during the same payment period as pensions and social insurance benefits for January 2025.

See more about Official Dispatch 4791/BHXH-TCKT of 2024...Download

Vietnam: Official Dispatch 4791 on the lump-sum payment of 2 months' pension before the 2025 Tet holiday promulgated? (Image from the Internet)

Vietnam: How will the pension be adjusted from July 1, 2025?

Based on Article 67 of the Social Insurance Law 2024 (effective from July 1, 2025) which prescribes the adjustment of pensions as follows:

Adjustment of pensions

1. Pensions are adjusted based on the increase rate of the consumer price index in accordance with the capacity of the state budget and social insurance fund.

2. Make appropriate increases to pensions for those with low pensions and who retired before 1995 to narrow the disparity in pensions between retirees of different periods.

3. The Government of Vietnam prescribes the timing, subjects, and levels of pension adjustment as regulated in this Article.

Based on existing law, Article 57 of the Social Insurance Law 2014 regulates the adjustment of pensions as follows:

Adjustment of pensions

The Government of Vietnam regulates the pension adjustment based on the increase rate of the consumer price index and economic growth, in line with the state budget and social insurance fund.

Thus, from July 1, 2025, additional regulations provide for appropriate pension increases for those with low pensions and who retired before 1995 to ensure narrowing the pension gap among retirees of different periods.

Are pensions taxable in Vietnam?

Based on the provisions of Article 4 of the Personal Income Tax Law 2007 (amended by Clause 2 Article 1 of the Amended Personal Income Tax Law 2012 and supplemented by Clause 3 Article 2 of the Amended Tax Laws 2014), which includes tax-exempt income:

Tax-exempt income

...

5. Income of households and individuals directly engaged in agriculture, forestry, salt production, aquaculture, and fishing not yet processed into other products or only through preliminary processing.

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

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

8. Income from remittances.

9. Night work and overtime wages are higher than daytime or regular hour wages as prescribed by law.

10. Pension paid by the Social Insurance Fund; pension paid monthly by a voluntary pension fund.

...

Thus, pensions are exempt from personal income tax, so high or low pensions do not affect the tax payment level on personal income.