Q: I have contributed to my personal pension this year. Hearing that these contributions are eligible for personal income tax deductions, I want to know when exactly I can claim the deduction.

A: In accordance with Article Two of the Announcement of the Ministry of Finance and the State Taxation Administration on Implementing Personal-Income-Tax Preferential Policies for Personal Pensions Nationwide (MOF-STA Announcement No 21 of 2024), the deduction certificate issued by the Personal Pension Information Management Service Platform shall serve as the supporting document for pre-tax deductions on personal pension contributions.

For taxpayers receiving wages and salaries, or remuneration for personal services withheld and remitted under the cumulative withholding method, contributions may be deducted within the statutory limit either in the current-year withholding-and-remittance process or in the following-year annual tax reconciliation. If you opt for current-year withholding deduction, you shall submit the deduction certificate to your withholding agent in a timely manner. The withholding agent shall process the pre-tax deduction in compliance with provisions set forth in this Announcement.

For income from services, author's remuneration, royalties, or business activities, personal-pension contributions shall be deducted within the prescribed limit during the following year's annual tax reconciliation.

When an individual withdraws funds from their personal pension account, the commercial bank holding the account shall withhold and remit the corresponding personal income tax.