China to offer tax concessions for private pensions

China will offer tax concessions for private pension schemes, according to a State Council executive meeting chaired by Chinese Premier Li Keqiang on Monday.

It was decided at the meeting that tax concessions would be offered for private pension schemes that enjoy policy support and are run commercially.

The meeting noted that such private pension schemes are useful complements to the basic old-age insurance scheme, and can better meet people's diverse needs and enhance social security safeguards.

Personal income tax concessions will be made available for these private pension schemes. Participants will be entitled to a contribution deduction of up to 12,000 yuan each year from their annual taxable income.

No tax will be levied on investment yields for the time being. The actual tax burden for receiving pension benefits will be lowered from its previous 7.5 percent to 3 percent. This policy will be applied retroactively to Jan 1 this year.

Source from State taxation administration of the P.R.C.

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