【Tax Refund on Lump-Sum Withdrawal】

When the Lump-sum Withdrawal Payment is made by the Social Insurance Agency, that payment will be subjected to a 20% tax called Alternative Taxation. Those who are eligible to file for the Lump-sum Withdrawal Payment on the Employees’ Pension Insurance, which includes most JET participants, may also qualify to receive a refund on the 20% flat tax placed on the Lump-sum Withdrawal Payment in accordance with Article 171 of Income Tax Law. The process for claiming a refund on the tax is described below.

1. Designate Tax Representative Before Leaving Japan

2. File for Lump-sum Withdrawal Payment

3. Designate bank account and file for Tax Refund

1. Designate a person to file your tax paperwork

Before leaving Japan, get a copy of the Nozeikanrinin no todokedesho (gaikokujin-yo) [Declaration Naming a Person to Administer the Taxpayer’s Tax Affairs (For use by aliens)] form, appoint a Tax Representative and submit the form to the local tax office where you were a resident (i.e. in the jurisdiction where your residence is located). When designating a Tax Representative, find someone you trust (a colleague, friend, etc.) with financial matters and whom you can easily correspond with once you return to your home country. A Tax Representative must be a resident of Japan, but does not have to be Japanese.

2. File for the Pension Refund

After leaving Japan, file for the Lump-sum Withdrawal Payment. Once receiving your Lump-sum Withdrawal Payment, send the original Dattai ichijikin shikyu kettei tsuchisho [Notice of the Lump-sum Withdrawal Payment (Entitlement)] to your Tax Representative. Details on how to file are here.

3. Designate a bank account and file for the Tax Refund

Have your Tax Representative go to the same tax office as step 1 above and file the kakutei shinkokusho on your behalf. The refund will be deposited into your Tax Representative's bank account in Japan. Then have your Tax Representative transfer the refunded amount into your own bank account.

You may file for the Pension Tax Refund as soon as you receive your Notice of the Lump-sum Withdrawal Payment (Dattai ichijikin shikyu kettei tsuchisho). You do not need to wait until January 1st of the following year in order to file as you would with other tax refunds.

Notes:

・Application must be made within 5 years after leaving Japan.

・A JET participant receiving an average monthly remuneration of 300,000 yen should receive a full refund on the 20% tax of the Lump-sum Withdrawal Payment.

・All JET participants, whether they pay Japanese taxes or not, will be subject to the 20% taxation on their Lump-sum Withdrawal Payment.

・Any further inquiries must be directed to the designated tax office where you were a resident in Japan. Please note that JET participants must personally pursue their specific case with their Contracting Organisation and local tax authorities.

・CLAIR does not handle the paperwork for this tax refund nor for the Pension Refund.

DISCLAIMER: The above information is based on a pamphlet issued by the Social Insurance Agency. CLAIR assumes no responsibility for the accuracy of information provided here. This information is intended to help guide former JET Programme participants through the process of filing for the pension refund, but all specific questions and concerns must be addressed directly to the Social Insurance Agency.