How to get back the 20.42% tax on your Japan pension refund

When you receive the Employees' Pension lump-sum withdrawal payment after leaving Japan, 20.42% is taken as income tax. For most people all of it can be refunded, but only if someone in Japan files a return for you. Here is the procedure, step by step.

Checked against Japan Pension Service and National Tax Agency documents on 14 October 2026.

Short answer. Before you leave Japan, name a tax agent (納税管理人, nōzei kanrinin) who lives in Japan and register them at your tax office. After the refund is paid, send them the payment notice. They file a tax return choosing "retirement income taxation" (退職所得の選択課税), and the tax comes back to their Japanese bank account. On a ¥990,000 refund, that is about ¥202,000.

Why the tax comes back

Once you have left Japan, you are a non-resident for tax purposes. The Employees' Pension refund is treated like a retirement payment, and for non-residents the payer withholds a flat 20.42% (20% income tax plus the 2.1% reconstruction surtax). The National Pension refund has no tax withheld, so this only concerns the Employees' Pension part.

The law lets a non-resident choose to be taxed as if they were a resident on this payment instead. Residents get a large deduction on retirement income:

• Deduction: ¥400,000 per year of service, at least ¥800,000.
• What is left after the deduction is halved, then taxed.

Because the refund is at most 5 years of contributions, the deduction usually covers all of it, so the tax becomes zero and everything withheld is refunded. In the National Tax Agency's own example, a refund of ¥291,478 had ¥59,519 withheld, and the whole ¥59,519 came back.

Estimates assume no other retirement payment in the same year, and that "years of service" equals your coverage period (our assumption; the tax office decides). Try your own numbers in the calculator.

Step by step

1. Before you leave: choose a tax agent. Anyone with an address in Japan can do it: a friend, a colleague, or a paid tax accountant. The refund will be paid into their Japanese bank account, so pick someone you trust.
2. Before you leave: register the agent. Submit the "Notification of Tax Agent for Income Tax/Consumption Tax" (所得税・消費税の納税管理人の届出書) to the tax office for your address in Japan, in person, by post or through e-Tax. If you already left without doing this, it can be submitted together with the tax return later, but doing it first is easier.
3. Before you leave: file the moving-out notice (転出届) at your city or ward office. This also makes the pension claim simpler.
4. Claim the lump-sum payment from the Japan Pension Service (see how much you get). You can post it from abroad, or submit it before departure once your moving-out date has passed.
5. Send the payment notice to your agent. When the money is sent, the Japan Pension Service mails you the "Notice of Lump-sum Withdrawal Payment Determination" (脱退一時金支給決定通知書). Send the original to your tax agent; the return needs it.
6. Your agent files the return at the tax office for your last address in Japan. It is the normal income tax return form, marked "退職所得の選択課税" (retirement income taxation at the taxpayer's option), for the year written as the payment decision date on the notice. For example, a decision in 2026 means a return for 2026 (令和8年分). The National Tax Agency says it can be filed from 1 January of the next year, or earlier once the total for that year is fixed.
7. The refund arrives in your agent's Japanese account. They forward it to you, for example by international transfer.

Mistakes to avoid

• Leaving without an agent. Not fatal, but finding someone to register and file for you from abroad is much harder.
• Losing the payment notice. Keep the original safe and send it to your agent; make a copy for yourself.
• Filing for the wrong year. Use the year of the payment decision on the notice, not the year you left Japan.
• Waiting too long. Under the general rule for tax refunds, the right to a refund expires after 5 years. File as soon as you can.

Next step

Estimate your refund and the tax you can recover in the pension refund calculator. Your numbers stay on your device, and you can save the result as a PDF to share with your tax agent.

Sources

• Japan Pension Service, English claim form guide (PDF), section "Income tax on Lump-sum Withdrawal Payments".
• National Tax Agency, sample return for retirement income taxation at the taxpayer's option (Japanese; example 2 is the pension refund).
• National Tax Agency, tax agent notification procedure (Japanese).
• National Tax Agency, tax on the income of non-residents.

General information, not personal tax advice. If you are unsure, ask the tax office or a tax accountant.