Is the lump-sum withdrawal payment subject to taxation?
Is the lump-sum withdrawal payment subject to taxation?
1.Taxes on the lump-sum withdrawal payment
Taxes on the lump-sum withdrawal payment are as shown below.
| Pension type | Subject to taxation? | Tax rate |
|---|---|---|
| 1.National Pension Insurance | Not taxed | None |
| 2.Employees’ Pension Insurance | Subject to income tax | 20.42％ (as of 2021)
Ex.: Lump-sum withdrawal payment of 500,000 yen Income tax: 100,000 yen (approx. 20%) After withholding: 400,000 yen (amt. received) |
2.Refund of income tax
The above income tax can generally be refunded by completing the refund procedure.
Because the foreign national who receives the lump-sum withdrawal payment is not in Japan at the time, he or she must select an administrator of tax payment (*) in Japan and complete the tax return filing for the refund procedure.
※Administrator of tax payment: Person who processes tax work on behalf of a person without an address in Japan (foreign national after returning home).
Basic information about lump-sum withdrawal payments
2.What payments are refunded?
3.How much is refunded?
4.How is the amount calculated?
5.What are the conditions for receiving the lump-sum withdrawal payment?
6.Is the lump-sum withdrawal payment subject to taxation?
7.How does the process work?
8.Are there any precautions concerning the lump-sum withdrawal payment?
We have been in business since 1986 and have nearly 40 years of experience in consulting on various procedures for foreigners, with a focus on visa applications.
Telephone, e-mail, online, and in-person consultations are available. We also provide services in English.