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Announcement on Individual Income Tax Policies for Personal Pensions2022-11-03 16:24:19

Announcement on Individual Income Tax Policies for Personal Pensions

Announcement of the Ministry of Finance and the State Taxation Administration [2022] No.34

November 3, 2022



In order to implement the relevant requirements of the Opinions of the General Office of the State Council on Promoting the Development of Personal Pensions (Guo Ban Fa [2022] No.7), the individual income tax policies for personal pensions are hereby announced as follows:

I. As of January 1, 2022, the preferential policy on deferred tax payment shall be implemented for personal pensions. Upon payment, the payment made by an individual to the personal pension account shall be deducted according to the actual conditions from the comprehensive income or business income to the extent of CNY12,000/year; upon investment, the investment income included in the personal pension account shall not be subject to individual income tax for the time being; upon receipt of a personal pension, the personal pension received by an individual shall not be consolidated into the comprehensive income, and shall be separately subject to individual income tax at the tax rate of 3%, with the tax paid included in the item of "wage and salary income."

II. Where an individual is entitled to the pre-tax deduction preference upon payment, the deduction voucher issued by a personal pension information management service platform shall be the tax deduction voucher. Where the wage and salary income or the labor remuneration income withheld and paid according to the accumulative withholding method for individual income tax purposes is obtained, upon payment of individual income tax, such income may be deducted according to the actual conditions within the limit during the withholding and payment in the current year or the final settlement in the following year. Where a taxpayer chooses to withhold and pay individual income tax in the current year, he or she shall provide the relevant vouchers to the withholding entity in a timely manner. The withholding entity shall, in accordance with the relevant requirements hereof, handle matters relating to pre-tax deduction for the taxpayer. Where any other labor remuneration, author's remuneration, royalty, or any other income or business income is obtained, upon payment of individual income tax, such income may be deducted according to the actual conditions within the limit during the final settlement in the following year. Where an individual receives a personal pension in accordance with the regulations, his or her payable individual income tax shall be withheld and paid by the commercial bank in the city where his or her personal pension account is opened.

III. The human resources and social security authorities shall establish a mechanism for information exchange with the tax authorities, to exchange the tax-related information of personal pensions with the tax authorities through the personal pension information management service platform, and cooperate with the tax authorities in the relevant tax collection and administration.

IV. The relevant branches of commercial banks shall declare the tax payment by all taxpayers who have opened personal pension accounts with the banks in full amount and in detail in a timely manner and ensure the authenticity and accuracy of the information.

V. The authorities of finance, human resources and social security, taxation, and financial regulation at all levels shall closely cooperate with each other, earnestly organize and implement the relevant work, and promptly report any difficulties and problems encountered in the implementation hereof to the competent authorities at the higher level.

VI. The tax policies prescribed herein shall come into force in personal pensions-related pioneer cities as of January 1, 2022.

The list of personal pensions-related pioneer cities shall be separately promulgated by the Ministry of Human Resources and Social Security in concert with the Ministry of Finance and the State Taxation Administration. As of January 1, 2022, the tax policies prescribed herein shall be uniformly implemented in Shanghai Municipality, Fujian Province, the Suzhou Industrial Park, and other regions where the pilot program for deferred individual tax-related commercial pension insurance is implemented.

The Announcement is hereby given.