Do individuals need to pay a 3% tax on the investment income of their pension funds? The Ministry of Human Resources and Social Security responds.

Workers participating in the basic old-age insurance for urban employees or the basic old-age insurance for urban and rural residents in China can all participate in the personal pension system. After participating in the personal pension system and making contributions, not only can they deduct personal income tax, but the money in the fund account can also be used to purchase designated investment products. Do individuals need to pay 3% tax on the investment return portion of their personal pension? The Ministry of Human Resources and Social Security responded: according to the policy regulations, when individuals receive their personal pension, they must pay 3% personal income tax based on the amount received, without distinguishing between principal and investment returns.