What a tax representative has to do
The subscriber of the pension plan is eligible to claim Pension Lump-Sum Withdrawal Payment(脱退一時金) once their residency is de-registered in Japan. The pension subscriber will be eligible to claim the pension premiums that they have paid into the system in the past 60 months. Even if the subscriber has lived in Japan for more than 60 months, they will not be eligible to claim the premiums paid into the system before then.
When Pension Lump-Sum Withdrawal Payment is paid to the subscriber of the pension plan, about 20% of the total amount the subscriber has paid into the pension system will be automatically deducted as income tax. Thus, the subscriber only receives about 80% of the total amount of the pension premiums they have paid into the system. However, the subscriber may be qualified to claim this 20% tax since the income(i.e. Pension Lump-Sum Withdrawal Payment) is paid after the subscriber already left Japan (i.e. the subscriber is no longer subject to pay the tax in Japan since the person in question is no longer registered as a resident of Japan).
The subscriber can claim the 20% tax by appointing someone who will still be in Japan even after they have left Japan as their tax representative so the representative can claim the 20% tax on their behalf.
How to appoint someone as your tax representative?
The subscriber receives a "Lump-Sum Withdrawal Payment Report" from Private School Mutual Aid stating the details of the Pension Lump-Sum Withdrawal Payment after the payment has been made by Private School Mutual Aid. Then the original copy of the report has to be sent to the tax representative as the report has all the necessary information to claim the 20% tax.
Before the subscriber leaves Japan, make sure to talk about the means to transfer the 20% tax to the subscriber after the claim as the 20% tax will be deposited in the tax representative's bank account in Japan(It will NOT be deposited in the subscriber's bank account overseas or in Japan).
The tax representative has to visit the tax office that has jurisdiction over the area that the subscriber used to live to claim the 20% tax.
Local tax offices and their jurisdiction areas:
What a tax representative has to bring to the tax office:
- ID card (e.g. Japanese driving license, resident card, etc)
- The tax representative's bank passbook
- Lump-Sum Withdrawal Payment report received from the pension subscriber
What a tax representative has to do at the tax office:
- Avoid going to the tax office during the "tax return(確定申告)" period which is normally between mid-Feb and mid-Mar(mid-Apr for 2020) as it is the busiest season at the tax office and the procedure which you are required to do can be processed even out of this period.
- Make sure to claim the 20% tax within 5 years since the Lump-Sum Withdrawal Payment has been made.
- Tell the tax officer that you are there as a tax representative to claim income tax that was taxed on the Pension Lump-Sum Withdrawal Payment after the tax payer left Japan. (If you don't speak Japanese, show the following line)
- Fill in the form (所得税の確定申告書B様式) and provide the tax office with your bank account details by showing them your bank passbook. (The tax officer will help you fill in the form in case you are not sure how to fill the form)
- The 20% tax will be deposited in the tax representative's bank account in Japan.
- Transfer the amount to the pension subscriber in whatever the means available.