Pensions are exempt from personal income tax
According to Article 4 of the 2025 Personal Income Tax Law, the State stipulates many tax-exempt incomes, including pensions.
Specifically, Clause 9, Article 4 clearly states: "Pensions paid by the Social Insurance Fund; income paid by the supplementary pension insurance fund, voluntary pension fund" are income exempt from personal income tax.
This means that people who are receiving monthly pensions from the Social Insurance Fund will not have to pay personal income tax on this amount. Similarly, if employees participate in supplementary pension funds or voluntary pension funds and are paid at retirement, the amount received is also not taxed.
Pensions are the main source of income for most people who have quit their jobs. The exemption from personal income tax on pensions reflects the State's social security policy, aimed at ensuring the lives of the elderly after many years of working and contributing.
Thanks to this regulation, retirees are entitled to the full pension, without being deducted additional tax.
The 2025 Personal Income Tax Law will officially take effect from July 1, 2026. However, regulations related to business income and salaries and wages of resident individuals have been applied since the tax period of 2026 (ie from January 1, 2026).
For pensions, tax exemption will be implemented according to the general effective date of the law, which is from July 1, 2026.
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