Personal pension tax concessions are here! It can be deducted before tax, and the actual tax burden is reduced to 3%

　　China News Service, September 29 (Chief Financial Reporter Li Jinlei) The preferential tax policies for personal pensions are here.

　　The executive meeting of the State Council held on September 26 decided

　　What is a personal pension?

Simply put, personal pension is the third pillar of my country's pension system.

　　The first pillar is the basic old-age insurance, which together with the old-age insurance for urban and rural residents has covered more than 1 billion people.

The second pillar is enterprise annuity and occupational annuity, which have covered more than 58 million people.

　　On April 21, 2022, the "Opinions of the General Office of the State Council on Promoting the Development of Individual Pensions" was released.

Workers who participate in the basic endowment insurance for urban employees or the basic endowment insurance for urban and rural residents in China can participate in the individual pension system.

The individual pension system adopts an individual account system, and the contributions are entirely borne by the participants and are fully accumulated.

Participants can pay a maximum of 12,000 yuan per year for personal pensions.

　　The most direct benefit of individuals participating in the personal pension system is that they can enjoy the preferential tax policies of the state.

Now, the relevant tax preferential policies have finally been clarified.

The annual limit of 12,000 yuan is deducted before tax

　　Feng Wenmeng, director of the Research Office of the Institute of Public Administration and Human Resources of the Development Research Center of the State Council, told Zhongxin Finance that the clarification of preferential tax policies means that a solid step has been taken in the implementation of personal pensions.

　　What do you think of the 12,000 yuan deduction limit?

　　Feng Wenmeng believes that the deduction limit of 12,000 yuan means that the monthly pre-tax deduction limit is 1,000 yuan. This amount is more in line with the current payment status and is more reasonable.

　　He explained that, on the one hand, the upper limit of the annual pre-tax deduction is 12,000 yuan, which takes into account the current residents’ financial affordability and existing actual payment status; on the other hand, it also takes into account that the current pre-tax deduction already includes children Education, care for the elderly, etc.

At the same time, this quota cannot be out of touch with the status quo. Excessive quotas can easily lead to speculation and may lead to other risks. More importantly, it is necessary to avoid too large a gap in pension levels and maintain a reasonable income distribution and security pattern.

　　Nie Mingjun, director of the Pension Insurance Department of the Ministry of Human Resources and Social Security, pointed out at the State Council's regular policy briefing in April that the initial stage is 12,000 yuan. With the development of the economy and society, as the disposable income of urban and rural residents increases, the payment will be gradually increased in due course. The upper limit can better meet the needs of the people for supplementary pensions.

Data map: People handle social security business.

Photo by China News Agency reporter Zhang Bin

The actual tax burden of receiving income is reduced to 3%

　　According to regulations, personal pension contributions can be used to purchase financial products such as bank wealth management, savings deposits, commercial pension insurance, and public funds that meet the regulations.

The policy is clear, investment income will not be taxed for the time being.

　　In addition, the actual tax burden on receiving income has been reduced from 7.5% to 3%.

Zhang Yinghua, executive researcher of the World Social Security Research Center of the Chinese Academy of Social Sciences, told Zhongxin Finance and Economics that this is the current lowest tax bracket for personal income tax, which is conducive to encouraging the vast majority of taxpayers to participate in personal pensions.

The development of personal pensions and the conversion of some residents' savings into pension assets will help smooth consumption in the life cycle of individuals.

　　7.5% is the actual tax burden of the previous personal tax-deferred commercial pension insurance.

In 2018, the Ministry of Finance and other five departments issued the "Notice on Launching the Pilot Program of Individual Tax-Deferred Commercial Pension Insurance", 25% of the commercial pension income received by individuals when they meet the specified conditions is exempted from tax, and the remaining 75% is subject to tax exemption. The 10% proportional tax rate is calculated and paid for personal income tax, and the tax is included in the "other income" item.

　　Feng Wenmeng believes that reducing the actual tax burden at the receiving stage to 3%, the tax rate is relatively low, and the contributors will receive tangible benefits, which will greatly encourage the development of personal pensions.

The use of tax tools in multiple links to provide incentives and encourage the development of individual commercial endowment insurance will enable residents to have more adequate endowment insurance in the future, and promote the gradual maturity of the multi-pillar endowment insurance system.

Where can I buy it?

　　The preferential tax policy has been released, and many people are concerned about where to buy a personal pension?

　　According to the above opinions, the Ministry of Human Resources and Social Security and the Ministry of Finance should strengthen guidance and coordination, and implement it step by step in light of the actual situation. Select some cities for a one-year trial, and then gradually roll it out.

　　Zhongxin Finance noticed that the Sichuan Human Resources and Social Security Department announced in July that Chengdu was identified as the first city for personal pensions in Sichuan Province.

In the next step, Sichuan Province will, in accordance with the relevant national deployment and requirements, start the implementation of individual pensions in Chengdu in due course.

　　According to media reports, many banks, fund companies, etc. are rushing to prepare for the pension system preparation, and many banks may have completed the four-party joint testing of related systems. At present, many large and medium-sized fund companies in the industry are also participating.

(Finish)