Lump-sum Withdrawal Payments of Pension by Foreigners who returned to home country permanently.

I am wondering if you have read the article "How to avoid the trouble of paying double on return to Oz (18th Oct 2011)" of thejapantimes?

Application for Lump-sum Withdrawal Payments of Pension

１．General information:

If you are non-Japanese and you have short coverage periods under the National Pension system or the Employees' Pension Insurance system, you can apply for the Lump-sum Withdrawal Payments.

Please make sure you are no longer covered by these pension systems, and you file the application for the Payments within two years since you leave Japan.

Application form (ENGLISH provided by Japan Pension Service )

Note 1. You may be qualified for the totalisation benefits under Japanese system as well as foreign system if you have qualifying coverage periods under pension systems of countries with which Japan have totalisation agreements, subject to each qualification conditions:

As of December 2011, Japan has such bilateral agreements with Germany, the United States, Belgium, France, Canada, Australia, Netherlands, Czech, Spain, and Ireland respectively. The agreements between Japan and Brazil as well as Switzerland are in preparation. For updated agreement status, please refer to the Japan Pension Service web-site.

Once you receive your payments, however, your coverage periods for the basis of the payments entitlement will no longer be valid to apply for other Japanese benefits.

Note 2. The amount of your lump-sum withdrawal payments will be calculated depending on your coverage periods up to 36 months. We urge you to note that even if your coverage periods are 37 months or longer, your payments will be calculated up to 36 months and your total coverage periods will no longer be valid to apply for other Japanese benefits.

２．Suggestion:

If your pension payment period exceeds 36 months, you should consult with a Social insurance specialist. Licensed Social Insurance specialist would simulate which is preferable (1) Lump-sum Withdrawal Payments of Pension or (2) wait to qualify to receive period by pension agreement between your home country and Japan.

3．20.42% of withholding tax is deducted:

When Lump-sum Withdrawal Payments of Pension (social security pension) is made, 20.42% of withholding tax is deducted by Japan Pension Service under the Japanese Individual tax regulation.

Refund 20.42% of withholding tax through a Tax return filing.

If you take below steps, you may obtain 20.42% of withholding tax refund through your tax return filing. Tax administrator is necessary for filing as you are non Resident of Japan when tax return filing is made.

1．Apply Lump-sum Withdrawal Payments for Pension Service:

Application form (ENGLISH provided by Japan Pension Service )

2. Assign Tax Agent and file a form to tax office:

Tax agent assign report.(NTA)

3. Tax return filing:

Lump-sum Withdrawal Payments is categorised as Retired income. There is a deduction in Retired income calculation based on worked years. So normally, your Retired income would be calculated as Nil so withheld tax would be refunded.

4. Money remittance to you:

Refund of withholding tax would be paid to a bank account in Japan of the Tax agent of you. Refunded tax would be remitted to your bank account in your home country after a deduction of a fee (20% of refund or a minimum JPY 30,000) for this tax related procedures.

(IMPORTANT NOTICE)
We, Yamajo International Tax and Accounting Office do not provide a tax service to Individuals, whereas we introduce our external affiliated Japanese tax specialist. Social insurance issue will be advised by also our external affiliated licensed HR specialist (Shakai-hoken Romushi).