Are pensions exempt from personal income tax in Vietnam?
Are pensions exempt from personal income tax in Vietnam? In 2024, in what cases will employees be suspended from receiving pension in Vietnam? Please advise.
Who must pay personal income tax in Vietnam?
Pursuant to Article 2 of the Personal Income Tax Law 2007, it is stipulated that subjects must pay personal income tax:
Taxpayers
1. Personal income taxpayers include residents who earn taxable incomes specified in Article 3 of this Law inside and outside the Vietnamese territory and non-residents who earn taxable incomes specified in Article 3 of this Law inside the Vietnamese territory.
2. Resident means a person who satisfies one of the following conditions:
a/ Being present in Vietnam for 183 days or more in a calendar year or 12 consecutive months counting from the first date of their presence in Vietnam;
b/ Having a place of habitual residence in Vietnam, which is a registered place of permanent residence or a rented house for dwelling in Vietnam under a term rent contract.
3. Non-resident means a person who does not satisfy any of the conditions specified in Clause 2 of this Article.
Thus, personal income taxpayers are resident individuals with taxable income arising inside and outside the territory of Vietnam and non-resident individuals with taxable income arising inside Vietnamese territory.
Are pensions exempt from personal income tax in Vietnam? (Image from the Internet)
Are pensions exempt from personal income tax in Vietnam?
Pursuant to Clause 10, Article 4 of Decree 65/2013/ND-CP supplemented by Clause 6, Article 2 of Decree 12/2015/ND-CP, there are regulations on income exempt from personal income tax as follows:
Income is tax-free
...
9. Salary or wage amounts paid for night shift and overtime work, which are higher than those paid for day shifts or prescribed working hours under law.
10. Retirement pensions that are paid by Social Insurance Fund under the Law on Social Insurance, and pensions received monthly from the voluntary retirement Fund. Individuals residing and working in Vietnam are eligible for exemption from personal income tax on pensions paid by foreign countries.
11. Incomes from scholarships, including:
a) Scholarships granted from the state budget;
b) Scholarships granted by domestic and foreign organizations (including amounts for living expenses) under study promotion programs of those organizations.
...
In addition, at Point k, Clause 1, Article 3, Circular 111/2013/TT-BTC also provides guidance on pensions paid by Social Insurance Fund according to the Law on Social insurance; monthly pensions from the voluntary pension fund. The pensions paid from abroad to the people living and working in Vietnam are tax-free.
Thus, from the above regulations in Vietnam, it can be seen that pensions are income exempt from personal income tax in Vietnam.
In 2024, in what cases will employees be suspended from receiving pension in Vietnam?
According to Article 64 of the 2014 Law on Social Insurance, regulations on suspension from or continuation of enjoyment of pension or monthly social insurance allowance are specifically as follows:
Suspension from or continuation of enjoyment of pension or monthly social insurance allowance
1. Persons on pension or monthly social insurance allowance shall be suspended from enjoying such pension or allowance in one of the following cases:
a/ They illegally leave the country;
b/ They are declared missing by the court;
c/ There are grounds to confirm that their enjoyment of social insurance is illegal.
2. Pension or monthly social insurance allowance must continue to be paid when emigrants legally return to reside in the country in accordance with the residence law. In case there is a court's legally effective decision annulling the decision to declare missing, they are entitled not only to continue enjoying such pension or allowance but also to have their pension or monthly social insurance allowance retrospectively paid since the time of suspension.
3. Social insurance agencies, when deciding on suspension from enjoyment of social insurance under Point c, Clause 1 of this Article, shall notify in writing and clearly state the reason. Within 30 days from the date of suspension, social insurance agencies shall issue a decision settling the enjoyment; if deciding on termination of enjoyment of social insurance, they shall clearly state the reason.
According to this Article, in 2024, employees will be suspended from receiving pension in Vietnam in the following cases:
- Illegally leaving the country;
- Be declared missing by the Court;
- There are grounds to determine that social insurance benefits are not in accordance with the law.
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