However, due to a recent local merger on 1/7, the pension payout location is now over ten kilometers from my home. Given my age and the risks of long-distance motorbike travel, I'm considering switching to bank transfers.
I'm concerned about potential tax implications for pension payments or social security benefits received via bank transfer. 8 million VND barely covers my and my spouse's living expenses, and any tax deductions would create a significant financial burden.
Do Thi Yen, 68 years old
Vietnam Social Security Administration’s response:
According to personal income tax regulations, pension payments are exempt from taxation. Specifically:
The Law Amending and Supplementing a Number of Articles of the Personal Income Tax Law states: "Pension payments disbursed by the Social Insurance Fund and monthly pension payments from the Voluntary Pension Fund" are exempt from income tax.
Clause 10, Article 4 of Decree 65/2013/ND-CP, further clarifies: "Pension payments disbursed by the Social Insurance Fund under the Law on Social Insurance, and monthly pensions from the Voluntary Pension Fund are exempt from income tax." Additionally, individuals residing and working in Vietnam are tax-exempt on pension payments received from abroad.
Social security benefits
The law also specifies that social security benefits are not subject to personal income tax. These benefits are designed to support workers during hardship and unforeseen circumstances, and are not considered salary or wages for tax purposes.
The Law Amending and Supplementing a Number of Articles of the Personal Income Tax Law lists the following social security benefits as deductible from taxable income derived from salaries and wages:
- Occupational accident and disease benefits.
- One-time maternity or adoption benefits.
- Disability benefits.
- One-time retirement benefits.
- Monthly survivor benefits.
- Other benefits as prescribed by the law on social insurance.
Therefore, both pensions and social security benefits are exempt from personal income tax, regardless of whether they are received in cash or via bank transfer.
