Calculation of Miscellaneous Income from Individual Annuities

Calculation Method

• Miscellaneous Income = Annual Pension Amount − Necessary Expenses


• Necessary Expenses = Annual Pension Amount x Necessary Expense Ratio


• Deduction Ratio = Total Premiums Paid / Total Pension Receipts or Estimated Total Pension Receipts (Round up to the 3 decimal place)

• Total amount received or projected for a lifetime annuity: Annual annuity amount x Remaining life expectancy


• Total amount received or projected for a period-certain annuity: Annual annuity amount x Payment period


• Total amount received or estimated amount for a fixed-term annuity: Annual annuity amount x The shorter of the payment period and the remaining life expectancy


• Total amount received or estimated total amount for a lifetime annuity with a guaranteed period: Annual annuity amount x The longer of the payment period and the remaining life expectancy

Life expectancy is calculated based on the life expectancy table specified in Article 82-3 of the Enforcement Ordinance of the Income Tax Act.

Since gift tax applies when the policyholder and the annuity recipient are different individuals, this calculation cannot be performed.

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