Core Viewpoint - The article emphasizes that the requirement to pay personal income tax at a rate of 3% on personal pension withdrawals is not new, as it was established in a previous announcement by the Ministry of Finance and the State Taxation Administration in December 2024 [1][5]. Summary by Sections Personal Pension Taxation Policy - According to the announcement, personal pensions are taxed separately at a rate of 3% upon withdrawal, without distinguishing between principal and investment income [2][5]. - The taxation of personal pensions is designed to encourage individual savings for retirement, reflecting a policy direction that supports lower tax rates for pension withdrawals [5][6]. Implementation Timeline - The personal pension system was initially implemented in 36 cities in November 2022, and it was fully rolled out nationwide starting December 15, 2024 [6]. - The announcement also specifies that from January 1, 2024, contributions to personal pension accounts can be deducted from taxable income up to a limit of 12,000 yuan per year, and investment income in these accounts is not subject to personal income tax [6]. Taxation Framework - The personal pension system is characterized as a tax-deferred pension scheme, where contributions are deducted from the tax base at the time of payment, and taxes are levied upon withdrawal [5][6]. - The 3% tax rate on withdrawals is lower than the marginal tax rates for most wage earners, resulting in a lighter tax burden and balancing tax incentives with tax obligations [5].