Original title: Shi News | Do you have to pay taxes for pensions?
To distinguish between basic pension insurance and personal pension
On the evening of September 27, after the National Standing Committee proposed "Implementation of individual income tax concessions for policy-supported and commercialized personal pensions", some people asked: Do you still have to pay taxes for pensions?
In fact, this is to confuse the concepts of basic pension insurance and individual pension.
At present, my country is developing a multi-level, multi-pillar old-age insurance system.
The first pillar is the basic pension insurance undertaken by the government, the second pillar is enterprise annuity, occupational pension and group commercial pension insurance, and the third pillar is individual commercial pension insurance. The basic framework of the insurance system.
Pensions in the usual sense refer to the basic pensions of the first pillar, which can also be said to be in the field of public pensions.
In my country, the pension system is not balanced enough, and public pensions still dominate.
The policy package sent at the regular session of the National Assembly is aimed at the personal pension of the third pillar.
There is no personal tax to receive the basic pension.
The "Individual Income Tax Law" clearly stipulates that the settlement allowance, retirement allowance, basic pension or retirement allowance, retirement allowance and retirement living allowance paid to cadres and employees in accordance with the unified regulations of the state shall be exempted from individual income tax.
What is that person's pension?
On April 21, the General Office of the State Council issued the "Opinions on Promoting the Development of Individual Pensions" (hereinafter referred to as the "Opinions"), clarifying that workers participating in the basic endowment insurance for urban employees or basic endowment insurance for urban and rural residents within the territory of China can participate in individual pension plans. pension system.
The individual pension system adopts an individual account system, and the contributions are entirely borne by the participants and are fully accumulated.
Regarding the positioning of the development of personal pensions, the "Opinions" pointed out that it is necessary to accelerate the construction of a new development pattern, and promote the development of personal pensions that are suitable for China's national conditions, government policy support, individual voluntary participation, and market-oriented operations, and basic pension insurance, enterprise ( Occupational) annuities are linked together to realize the supplementary function of endowment insurance, coordinate the development of other personal commercial endowment financial services, and improve the multi-level and multi-pillar endowment insurance system.
In short, while paying social security, employees can also voluntarily participate in the personal pension system. After reaching the retirement age in the future, they can receive both social security pension and personal pension at the same time.
In the view of many academics and people in the industry, policy-supported and commercialized personal pensions need tax incentives, which will help increase demand and participation, and expand the coverage of the third pillar.
The "Opinions" also propose that the state formulates preferential tax policies to encourage qualified personnel to participate in the individual pension system and receive individual pensions in accordance with regulations.
In fact, before the introduction of the personal pension system, the tax-deferred commercial pension insurance has already been piloted.
The so-called tax-deferred pension insurance means that the insured pays the premium before tax, and then pays the tax according to the current tax rate when receiving the insurance money.
During the pilot period, the tax-deferred pension insurance adopted an effective tax rate of 7.5% at the receiving stage, but this tax rate was considered to be insufficiently favorable.
The regular meeting of the National Assembly proposed that the annual limit of 12,000 yuan will be deducted before tax for the payers, the investment income will not be taxed for the time being, and the actual tax burden of receiving income will be reduced from 7.5% to 3%.
As Zhu Junsheng, research director of the China Insurance and Pension Research Center of the PBC School of Finance, Tsinghua University, said, the 7.5% effective tax rate has greatly reduced the coverage of preferential tax policies.
The current tax rate of a large number of low- and middle-income earners is lower than the tax rate when receiving tax-deferred pensions. If they participate, not only will they not be able to enjoy the tax-saving effect of tax-deferred pensions, but they will increase their tax burden.
Therefore, the effective tax rate at the receiving stage should be greatly reduced, the participation of low- and middle-income taxpayers should be encouraged, and the coverage of individual pensions should be expanded to better achieve policy goals.
Generally speaking, there is no need to pay taxes to receive basic pensions in the conventional sense, but employees who voluntarily participate in the personal pension system can enjoy preferential tax policies.
At the time of payment, employees can deduct pre-tax according to the annual limit of 12,000 yuan and enjoy the current tax preference. When receiving personal pensions, they have to pay taxes at a rate of 3.5%.