On January 2, 2024, will the person receiving a pension of 280 million VND have to pay tax?

According to the pension and social insurance allowance payment plan for January and February 2024 of Social Insurance (Social Insurance) Ho Chi Minh City The 2 months of Tet pension (January and February 2024) of retirees in Ho Chi Minh City will be combined and paid in 1 payment in the payment period of January 2024.

Currently, Mr. P.P.N.T. is the person with the highest pension in Ho Chi Minh City and also the highest in the country. As of July 2023, Mr. T.’s pension is more than 140 million VND/month.

So when Ho Chi Minh City Social Insurance pays Gross pension for 2 months (January and February 2024) in the payment period January 2024 (starting payment from January 2, 2024) Mr. T. received more than 280 million VND.

Mr. T. has a pension as high as The above is because during the process of participating in social insurance, Mr. T.’s salary as the basis for paying social insurance is very high.

Before retiring, Mr. T. was the General Director of an FDI company with a salary of up to 250 million VND/month. During the period when Mr. T. participated in social insurance, there was no regulation on the maximum salary as a basis for paying social insurance.

Mr. T. retired from April 2015 with a pension of 87 million VND/month. After many adjustments, his pension from July 2023 is more than 140 million VND/month.

The above information surprised many readers because they did not know what to do with Mr. T. . has such a high pension. Many people also wonder whether Mr. T. has to pay personal income tax with such a high pension.

According to Ho Chi Minh City Social Insurance, any pension All people do not have to pay personal income tax. The same is true in the case of Mr. T. who is receiving a pension of more than 140 million VND/month and receives 280 million VND when combining 2 pension periods.

Decree No. 65/2013/ND-CP of the Government detailing a number of articles of the Law on Personal Income Tax and the Law amending and supplementing a number of articles of the Law on Personal Income Tax clearly stating this.

Specifically, Article 4 of Decree 65/2013/ND-CP, the Government stipulates 14 tax-exempt income sources.

In which pensions are specified in Clause 10: “Pensions paid by the Social Insurance Fund According to the provisions of the Social Insurance Law, pensions are received monthly from the Voluntary Retirement Fund. Individuals living and working in Vietnam are exempt from tax on pensions paid by foreign countries.”

Later, Circular 111/2013/TT-BTC issued by the Ministry of Finance provides clearer guidance on Implement Decree 65/2013/ND-CP which regulates in great detail tax-exempt income in Article 3.

Pension is tax-exempt income specified in point k, clause 1 of Article 3 Circular 111: “Pensions are paid by the Social Insurance Fund according to the provisions of the Social Insurance Law; pension received monthly from the Voluntary Retirement Fund. Individuals living and working in Vietnam are exempt from tax on pensions paid from abroad.”

Thus, pensions are income exempt from personal income tax. However, in the case of pensioners, Retired/people of full retirement age who continue to work, invest in business… and generate income from the above jobs, they still have to pay personal income tax on this income from business.

The basis for calculating tax and how to calculate personal income tax are specified in great detail in Circular 111/2013/TT-BTC. Readers can learn HERE.