What should someone leaving Japan know about lump-sum pension withdrawals and tax?

Question

I may leave Japan and apply for a lump-sum pension withdrawal. Please explain who can claim it, why withholding tax still appears on the payment, and when a tax agent becomes important.

TaxGuided · Accepted Answer

NTA says that people without Japanese nationality who were enrolled in Japanese public pension schemes for at least six months can claim lump-sum withdrawal payments after leaving Japan. That sounds straightforward until the tax treatment enters the frame. On employees' pension lump-sum withdrawals, the NTA says income tax at 20.42% is withheld at source. So the person leaving Japan should not confuse "eligible to claim the pension refund" with "nothing more to think about on tax."

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What should someone leaving Japan know about lump-sum pension withdrawals and tax?

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