I just moved to Japan from the US on a spouse visa and we had a rather confusing interaction at the city office today regarding nenkin. Sometimes when I ask my wife about this stuff she doesn’t give me a complete or accurate answer (and I bear no ill feelings for that; she’s not my personal encyclopedia on Japanese society) so I thought I would inquire here.
Background:
I am currently a PhD student in computer science, employed as a part-time research assistant for my university. I’ve finished all required coursework and can easily conduct my research from anywhere, so I convinced my adviser to let me finish the degree from Japan (where I intend to live anyway). I’m still getting paid as an employee in the US, and my department frowns upon international remote work so I can’t expect any support from them.
I might be able to get my adviser to request a Certificate of Coverage ([https://opts.ssa.gov/](https://opts.ssa.gov/)) but this could be dicey since I can’t really tell the business end of my department that I’m working from Japan. If I am unable to provide the requisite exemption documentation, I understand that I get a two-year “grace period” before making payments.
Apparently, I’m already registered in the nenkin system; this probably occurred when I was an exchange student for four months in 2014 but I have no specific memory of registering and did not work or earn any income during that period.
Questions:
My wife says that I am obligated to pay into the nenkin system *even if I have no income*. Of course I do have a (very modest) income from my RA job, but it seems weird that I would have to pay even without an income. After searching for a bit I haven’t found any evidence to support this… so is it true? And if it is true, what am I to do about the \~8 years of non-payment since I registered as an exchange student?
I’m already certain that I will need to work with a tax specialist for a number of other reasons (cough crypto cough) but if you want to tell me that I need to talk to a tax specialist then I will still graciously thank you for your useful advice.
EDIT:
Thanks for the comments. Not sure why I couldn’t find it earlier, but I see now that the [current nenkin obligation](https://www.nenkin.go.jp/service/pamphlet/kaigai/kokunenseido.files/2English.pdf) is ¥16,590 per month. I’m not sure how this squares with the “welfare pension” tax of 9.15% that is listed [here](https://taxsummaries.pwc.com/japan/individual/other-taxes)…?
9 comments
Start a one-man company and use an accountant to set it up. You can deduct expenses and report your US income as Japanese income. This will solve 99% of your problems. The problem is a PhD is like a piece of rice stuck on the bottom of your shoe. If you get it you will still be hungry and if you don’t get it it is a bother that won’t go away.
edit: accountant for attorney
Go to the city office and explain you have no income- this is grounds for you to apply for a full exemption from pension payments. It’s not automatic and you have to apply for this exemption each year – assuming you have been here a few months now that’s two years you need to apply for (the year ends in June). If you do not and do not pay they will pass your case to third party debt collectors.
For the period you were not in Japan explain that you were not a resident of Japan (they will likely ask to see e.g. passport stamps etc) and you will not have to pay that period either.
Here is the government explanation in English: https://www.nenkin.go.jp/service/pamphlet/kaigai/menjyo-yuyo.files/00English.pdf
If you live here you gotta pay, get an exemption due to low/no income or be covered as a dependent of someone under the employee pension system.
Read the basic pension section here for a start.
https://retirewiki.jp/wiki/Japanese_pension_system
Yes, even if no income, you have the obligation to pay. But as others have said, you can apply for exemption. It is not a one and done thing, you will need to reapply every year (most of the time).
May not be a straight answer, but from my wife’s uncle mentioned before that they can only pay the nenkin and be able to utilized if you have been living here for X amount of time. But you definitely have had to have lived here at some point so they can ask you to pay. Not sure if a year of 5 years but that’s my 2 cents on it. Hope it helps
>even if I have no income
That’s where you’re wrong: you are residing in Japan and working, that’s considered Japan-based income whether you’re working for a Japanese or foreign entity.
You’re a resident and tax resident of Japan.
Thus Your earned income (regardless of where it’s earned) is taxable to Japan (regardless if remitted to Japan or not) as “domestic sourced income”.
Your realized crypto gains are also taxable to Japan too as miscellaneous income.
I am not too sure about how the scholarship is taxed in Japan though though (maybe someone can help with that one).
You will need to pay national pension to Japan (and I believe get an exemption US social security side?) and national health insurance.
TLDR: Declare your income and pay your dam taxes.
If it really is RA, it counts again the 1.2 million yen minimum for tax exemption.
If it’s classified as scholarship, it’s free of tax as it is not considered income (until a much higher limit at least, maybe about 200,000 a month?). You may still need to apply for exemption though. I applied retroactively and it was accepted.
There is no certificate of coverage or anything ambiguous about it. You are now a resident of Japan you have to pay your social responsibilities. Listen to your wife.