Japan Pension Refund

Necessary documents to apply for Japan Pension Refund

How long does Japan Pension Refund take ?

When you can apply for refund of Pension of Japan ?

Pension Refund and Income Tax Refund of Japan

What is Japan pension refund ?

In the case foreign nationals have paid Employee’s Pension (Kosei Nenkin) for more than six month (less than ten years) in Japan and leave Japan continuously, they can apply for refund of pension tax and I call it “Japan pension refund“.

When you receive salary from your employer, employee’s pension tax is withheld by employer. And when you get old in Japan, you will be able to receive pension from Japanese government.

However if you have decided to reside outside Japan, you will not receive pension from Japanese government.

So you will hope to apply for Japan Pension Refund.

Even if you are not in Japan now, you can still apply for Japan Pension Refund as far as it is within 2 years from your departure from Japan.

If you have worked in Japan with annual salary of 6 million yen for 3 years, you will be able to receive about 1,650,000 yen as refund of Japan pension.

(6 million yen / 12 months = 500,000 yen. 500,000 yen * 3.3 = 1,650,000 yen.)

If you are not enrolled in Employee’s pension (Kosei Nenkin), but enrolled in National Pension (Kokumin Nenkin), you can apply for Japan Pension Refund.

If you are not in Japan now, I will be your agent and make necessary documents and apply for Japan Pension Refund on your behalf. You can receive money by your bank account in home country.

If you left Japan with re-entry permit, you need to submit a report to city office where you resided.

Ex. You lived in Chuo-ward, Tokyo and left Japan with re-entry permit. But you have decided to reside outside Japan from now on. In that case in order to apply for refund of pension tax of Japan, you need to submit a paper to Chuo-ward office that notifies you will live outside Japan.

By the way, when you resign from your job, you might have received Retirement Salary. In that case you can refer to “Retirement Income Tax of Japan“.

Necessary documents to apply for Japan Pension Refund

In order to apply for Japan Pension Refund, your Pension Book (Nenkin Techo) is necessary.

In this pension book, your basic pension number （Kiso Nenkin Bango) is indicated. If you lost your Nenkin Book, I will confirm with authority on your behalf.

And copy of your passport.

It should include your name, date of birth, nationality, signature, status of residence.

You also need to prepare document that certifies your bank name (ex. bank of America), name and branch of bank (ex. Washington Branch, 1-1, Washington, USA), bank account number, bank account holders name (it should be you).

And you need to clarify your Pension coverage history.

So you can clarify Name and address of your employer, Employment Period, Category of Pension (national pension or Employee’s pension).

How long does Japan Pension Refund take ?

After application for Japan Pension Refund, it will take about 5 months to receive your money.

When you receive Refund of Japanese Employee’s Pension, income tax is withheld from the money automatically.

If amount of refund is 100 yen, about 20 yen is withheld. So withholding income tax rate is about 20%.

On the other hand, in the case of National Pension, income tax is not withheld from your refund.

So, you can receive 100 yen.

When you can apply for refund of Pension of Japan ?

You can apply for this Japan Pension Refund before or after departure from Japan.

Assumed that you report Ward office that you will leave Japan on 1st September, 2020. In that case you need to submit Refund of Pension of Japan after 1st September 2020. So if you post an application paper on 1st September 2020, Authority will receive your application paper on 2nd September 2020 and it is OK.

Disadvantage of Japan Pension Refund

Assumed that you have paid Pension Tax in Japan for 5 years.

And you left Japan and live in India. According to Pension System in India, if a person have paid Pension Tax for 20 years, she can receive Pension when she gets old (this period differs depending on each country).

So if she pays pension tax in India for 15 years, she is entitled to receive Pension from government of India.

However if she applies for Japan Pension Refund, she can not include the 5 years in calculation.

So she need to pay Pension Tax to Indian Government for 20 years.

By the way, if you have paid Pension tax to government of Japan for ten years or more, you can not apply for Japan Pension Refund. Because you are entitled to receive Pension when you get old or reason to receive Pension immediately.

Pension Refund and Income Tax Refund of Japan
年金の還付と所得税の還付　

Suppose that you worked in Japan but retired. And you have returned to India. While you were in Japan, you were a company employee and enrolled in the Employees’ Pension Plan (厚生年金). However, you will not receive any pension from the Japanese government when you get old. So you have decided to ask for a refund of the pension you paid.
あなたは、日本で働いていましたが退職しました。そして、あなたはインドへ戻ったとします。あなたが日本にいるとき、あなたは会社員として厚生年金に加入していました。しかし、あなたは日本政府から年金を受け取らないので（あなたが歳をとったときに）、あなたは支払いをした年金を返してもらうことにしました。

Your request to the Japanese government to return your pension must be made within two years of your departure from Japan.
あなたが日本政府に年金を返せという要求は、出国をしてから２年以内にする必要がある。

You then successfully applied for and received back a portion of the Employee’s pension (Kosei Nenkin) that you paid. This money is called the “Lump-sum Withdrawal Payment (脱退一時金)”.
そして、無事に申請を行い、支払いをした厚生年金の一部を返してもらいました。このお金を”厚生年金の脱退一時金”と言います。

However, when you received your pension back, part of the lump-sum withdrawal payment was withheld by the Japanese government. For example, when you should have received 1,000,000 yen back, approximately 200,000 yen was withheld by the Japanese government.
（tax rate is about 20% and it is unreasonable high）
しかし、あなたが厚生年金を返してもらったときに、脱退一時金の一部が日本政府により源泉徴収されていました。例えば、あなたが1,000,000円を返してもらうべきところ、およそ200,000円が日本政府により源泉徴収されていました。

In this case, you may be able to get the 200,000 yen back if you file a tax return.
この場合、あなたは税務申告をすれば200,000円を返してもらえるかもしれません。

To file this tax return, you need to submit a “退職所得の選択課税適用による還付” form to the tax office.
この税務申告をするには”退職所得の選択課税適用による還付”を税務署へ提出する必要があるよ。

In order to file this tax return, you need to appoint a person residing in Japan as your tax agent（納税管理人）. A person other than a licensed tax accountant can also be appointed as a tax agent.
この税務申告をするには、日本に住んでいる人を納税管理人として選任する必要があるよ。税理士以外も納税管理人になることができるよ。

♥Why can I get a refund of withheld Lump-sum Withdrawal Payments?
どうして源泉徴収された脱退一時金を返してもらえるのか？

To understand this, it is necessary to understand retirement allowances and taxes.
このことを理解するには退職金と税金について理解する必要がある。

Suppose that you have lived in Japan for 8 years and 1 month and paid an employee pension during that time. (If you paid the employee pension for 10 years, you cannot receive the lump-sum withdrawal payment. Instead, you can receive a pension from the Japanese government when you get old. If you paid pension tax less than 6 months, you can not receive 脱退一時金.)
あなたは、日本に8.1 年間住んでその間厚生年金を支払っていました。（１０年間厚生年金を支払っていたら、脱退一時金を受け取ることはできない。その代わり、あなたが歳を老人になったときに日本政府から年金を受け取ることができる）

Then you retired and received a retirement allowance of 5 million yen.
そして退職し、５００万円の退職金をもらいました。

In this case, You would calculate the amount of tax on the retirement allowance as follows

あなたは、この場合の退職金にかかる税金額は以下のとおりに計算するよ。

Retirement income deduction : 400,000 yen (this amount is stipulated by law) x 9 years = 3,600,000 yen
退職所得控除：400,000円×9＝3,600,000円

Retirement income (taxable retirement allowance) : (5,000,000 yen – 3,600,000 yen) ÷ 2 = 700,000 yen
退職所得（課税される退職金）：（5,000,000円－3,600,000円）÷２＝700,000円

Amount of income tax : 700,000 yen x 5% (tax rate) = 35,000 yen
所得税の額：700,000円×５％（税率）＝35,000円

♥Lump-sum withdrawal payment（脱退一時金=Dattai Ichiji Kin) is treated as retirement income for tax purposes. However, when calculating the amount to be withheld from the lump-sum withdrawal payment (200,000 yen in the above example), the above retirement income deduction is not taken into account.

脱退一時金は税金上は退職所得として扱われる。しかし、脱退一時金から源泉徴収する金額（上記の例での200,000円）を計算するときに上記の退職所得控除を考慮に入れていない。

So if you file a tax return, you will be refunded from the 200,000 yen.
だから、あなたが確定申告をすれば200,000円から返金されるよ。

If you need any assist in this Japan Pension Refund process, you can contact me via email.

akiyama(a)japan-law-tax.com Solicitor Tomohiko AKIYAMA

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