Possible to get 20% tax return on my lump sum ?

3 comments

1. Correct me if I’m wrong, but you aren’t supposed to take out lump sum if you plan to live in Japan in the first place. So I’d say no, you can’t take the rest of the 20%.

2. >I live in Japan now, will this be possible still ?

   Yes. And you don’t need a tax representative if you are living in Japan. You can just file a tax return yourself to obtain the refund.

   Note that the reason for the 20.42% tax withholding is to prevent non-residents (i.e., people who are non-residents at the time of receiving the “retirement income”) from having to file an income tax return in Japan. But anyone who files an income tax return (via a representative or otherwise) will have the retirement income taxed as if they were a resident at the time they received it. In most cases, having the income taxed in that way will reduce the recipient’s tax liability to zero, which is the reason for the refund.

   So there is nothing strange about living in Japan at the time you file an income tax return to have the retirement income taxed as if you were a resident at the time you received it. The only difference is that, because you are living in Japan, you will need to wait until after the calendar year has ended (i.e., the calendar year in which you received the lump-sum withdrawal) before you can file an income tax return. That is because all your retirement income for the calendar year must be combined and taxed together, and since you are living in Japan, there is a chance that you will receive more retirement income before the end of the year. (In practice, you may know that is not going to happen, but it’s theoretically possible, at least.)

3. Do I understand correctly that you took away your pension, and then came back to live in Japan?

   I hope you thought that you would not be coming back, and that you’re aware that your contributions will restart at zero.