In order to implement the spirit of the 19th National Congress of the Communist Party of China, promote the construction of a multi-level pension insurance system, and conduct useful exploration of the third pillar of pension insurance, the Ministry of Finance, the State Administration of Taxation, the Ministry of Human Resources and Social Security, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission issued the Notice on the Development of Personal Taxation

Notice on the Pilot Program of Deferred Commercial Pension Insurance (Caishui [2018] No. 22) makes the following provisions on issues related to the pilot program of personal tax-deferred commercial pension insurance (hereinafter referred to as tax-deferred pension insurance).

1. Pilot Areas and Time Starting from May 1, 2018, the pilot program of personal tax-deferred commercial pension insurance will be implemented in Shanghai, Fujian Province (including Xiamen City) and Suzhou Industrial Park.

The pilot period is tentatively scheduled for one year.

2. Pilot policy content: For the expenditures of individuals in pilot areas purchasing qualified commercial pension insurance products through personal commercial pension fund accounts, pre-tax deductions are allowed within certain standards; investment income included in personal commercial pension fund accounts will not be levied on individuals for the time being.

Income tax; personal income tax is levied when individuals receive commercial pensions.

The specific provisions are as follows: (1) Pre-tax deduction standards for individual contributions.

For individuals who have received wages, salaries, and continuous labor remuneration before December 31, 2018, the premiums paid by them are allowed to be deducted within the actual limit when calculating the taxable income in the month when the deduction is declared. The deduction limit is based on the wages, salaries, and continuous labor remuneration of the month.

The lower of 6% of remuneration income and 1,000 yuan is determined.

For individual industrial and commercial owners, sole proprietorship investors, natural person partners of partnerships and contracting and leasing operators who obtain income from production and operation of individual industrial and commercial households and income from contracting and leasing operations of enterprises and institutions, the premiums paid by them are allowed to be calculated in the year when the deduction is declared.

The amount of taxable income shall be deducted according to the actual limit, and the deduction limit shall be determined according to the lower of 6% of the taxable income of the year and 12,000 yuan.

(2) Account capital gains are not taxed for the time being.

For investment income included in personal commercial pension fund accounts, no personal income tax will be levied during the payment period.

(3) Taxation on individuals receiving commercial pensions.

When individuals reach the retirement age stipulated by the state, they can receive commercial pensions on a monthly or annual basis, and the period of receipt is in principle for life or no less than 15 years.

If an individual dies, becomes totally disabled as stipulated in the insurance contract, or suffers from a major illness, he or she can receive a commercial pension in one lump sum.

For commercial pension income received when an individual meets the prescribed conditions, 25% of it will be exempted from tax, and the remaining 75% will be calculated and paid personal income tax at a proportional rate of 10%. The tax will be included in "other income" before December 31, 2018.

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3. Taxpayers to whom pilot policies are applicable refer to individuals who receive wages, salaries, and income from continuous labor remuneration in the pilot areas, as well as income from production and operation of individual industrial and commercial households, and income from contracting and leasing operations of enterprises and institutions.

For individual industrial and commercial owners, investors in sole proprietorships, natural persons partners of partnerships and contractors and lessees, the individual income tax withholding unit for their wages, salaries and continuous labor remuneration, or for individual industrial and commercial households, contracting and leasing units, sole proprietorships,

The actual business locations of partnerships are located within the pilot areas.

Income from continuous labor remuneration refers to the income obtained by taxpayers from providing labor services to the same unit for more than 6 consecutive months (including 6 months).

4. Commercial pension fund account and information platform Personal commercial pension fund account is a special commercial bank personal account designated by the taxpayer and used to collect tax-deferred commercial pension insurance payments, income and fund collection, etc.

This account operates in a closed manner, is bound to the resident identity document, and is unique.

During the pilot period, the information platform established by China Insurance Information Technology Management Co., Ltd. (hereinafter referred to as the China Insurance Platform) will be used.

Personal commercial pension fund accounts are registered on the China Banking Trust platform to verify their uniqueness.

Changes to personal commercial pension fund accounts must be verified by the China Insurance Credit Platform before the account is transferred, and transfers are allowed once a year.

The China Insurance Credit Platform is connected with the tax system, commercial insurance institutions and commercial banks to provide basic services such as account management, information inquiry, tax audit, and external supervision.

5. Commercial pension insurance products and management Individual commercial pension insurance products are selected based on the principle of mainly stable products and supplemented by risky products, and are determined through a directory.

The products during the pilot period refer to commercial pension insurance products developed by insurance companies that comply with the principles of "stable income, long-term lock-in, lifetime payment, and actuarial balance" and meet the insured's requirements for the safety, profitability, and long-term management of pension account funds.

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Specific guidelines for commercial pension insurance products were proposed by the China Banking and Insurance Regulatory Commission and released after consultation with the Ministry of Finance, the Ministry of Human Resources and Social Security, and the State Administration of Taxation.

6. Collection management (1) Pre-tax deduction for payment.

When individuals purchase commercial pension insurance products that meet the regulations and enjoy tax-deferred benefits, they must use the tax-deferred pension deduction certificate issued by the China Insurance Credit Platform as the tax deduction certificate.

Individuals who receive income from wages and salaries and income from continuous labor remuneration should provide relevant vouchers to the withholding unit in a timely manner.