Refunding income tax from money of ending Kosei pension insurance

The process is a bit difficult to understand, but it’s not difficult to do.

I don’t recommend spend money finding someone to help you.

If you got some friend in Japan or you have a bank account in Japan, then you can do it.

First of all, let me explain the whole tax system about this.

Japanese government took 20% income tax while the Pension Insurance Office pays you the return money from ending Kosei pension insurance.

In 2015, an additional tax for East Japan earthquake was added for 0.42%.

So In total, it’s 20.42% tax.

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Under tax law, the returned money from ending Kosei pension insurance is categorized as “income from retirement or ending a job”.

In this category, there is a special amount for tax deduction.

You can also check the official information on the website of Japanese Tax Office: https://www.nta.go.jp/taxanswer/shotoku/1420.htm

At the time I wrote this article, the amount for tax deduction for income from retirement or ending a job is 400,000 yen for a working year.

If the working time is less than a year, it’s counted as a full year.

In my case, I worked 5 years and 4 months, so it’s counted as 6 years for tax deduction.

The tax deduction amount was 400,000 yen * 6 years = 2,400,000 yen.

As a result, if my returned money is less than this amount, I don’t have to pay any tax and I can refund those 20.42% income tax.

Here is the real procedure I did for your reference.

There is a process for refunding tax.

First, before leaving Japan, you need to send a paper to local tax office to register your tax manager in Japan. Yes, by paper mail. It will be good if you leave a cope or scanned file with you.

It can be your relatives or reliable friends.

If you will keep a Japanese bank account, you can ask anyone to be your tax manager. As long as you have a Japanese bank account, the refunded tax money will go to your bank account directly.

If you will close all your Japanese bank accounts, then you need someone you can trust, because the refunded money will go to his/her bank account.

Refunded tax money can only be sent to Japanese bank accounts.

Here is the paper for registering your tax manager.（https://www.nta.go.jp/tetsuzuki/shinsei/annai/shinkoku/pdf/07.pdf）

Remember to do this before leaving Japan!!

Then you pack all your stuff, leave Japan, apply for returning money from ending Kosei Pension Insurance and receive the letter of notification of returned money payment.

Then tax refunding procedure continues.