Procedures for Permanent Residents Returning Home Permanently and the Pension Lump-sum Withdrawal Payment#

For foreign nationals who have lived in Japan for many years as “Permanent Residents” (Eijusha), the decision to return permanently to their home country constitutes a significant life event. While obtaining Permanent Residence is a rigorous process, relinquishing this status requires precise procedures to ensure compliance with Japanese laws and to avoid future tax liabilities. Furthermore, individuals who have contributed to the Japanese public pension system for an extended period are eligible to receive a “Lump-sum Withdrawal Payment” upon their departure.

This article provides an objective and detailed explanation of the immigration procedures for surrendering Permanent Resident status, the necessary municipal and tax formalities, and the process for claiming pension refunds.

Immigration Procedures: Loss of Resident Status#

“Permanent Return” refers to the act of removing one’s residential base from Japan and departing without the intention of returning to reside. In this scenario, the foreign national will lose their Permanent Resident status.

Surrendering the Residence Card (Zairyu Card)#

The procedure to surrender your status takes place at the airport’s immigration control counter upon your final departure. You must present your Residence Card to the immigration officer and clearly state, “I am leaving Japan permanently and wish to return my Residence Card.”

The officer will punch a hole in the card to invalidate it and return it to you. This action signifies the formal termination of your residence status. Crucial Warning: When filling out the Embarkation Disembarkation Card (ED Card), do not check the box that says “I am leaving with a Special Re-entry Permit.” If you check this box, you will technically remain a resident of Japan in the eyes of the system, which may cause your residence tax and social insurance obligations to continue accumulating even after you have left.

Can Permanent Residence be “Paused”?#

Some individuals wish to keep their Permanent Resident status “just in case.” If you obtain a Re-entry Permit (valid for up to 5 years) before leaving, you can maintain the status provided you return within the validity period. However, maintaining the status implies you still have ties to Japan, which can complicate your tax residency status. If you have no concrete plan to return, a clean break via proper surrender is often the most legally sound approach.

Municipal and Tax Procedures#

Before leaving Japan, you must complete procedures at the municipal office (City Hall or Ward Office) where you reside.

Submission of “Moving-out Notification” (Tenshutsu-todoke)#

Once your departure date is set, you must submit a “Notification of Moving Out” to your local municipal office. This removes you from the Basic Resident Register. Consequently, your obligation to pay into the National Health Insurance and National Pension systems ceases as of your departure date. Failing to do this will result in continued billing for insurance premiums.

Settlement of Residence Tax and Appointment of a Tax Representative#

Residence Tax (Jumin-zei) is levied on individuals residing in Japan as of January 1st, based on their income from the previous year. Therefore, even if you leave in the middle of the year, you are liable for the full amount of Residence Tax calculated for that year.

If you are leaving before receiving the tax bill (for example, leaving in March when bills for the previous year’s income arrive in June), or if you have unpaid installments remaining, you must appoint a Tax Representative (Nouzei-kanrinin). A Tax Representative is a resident in Japan (such as a friend or former colleague) who is designated to receive tax documents and pay taxes on your behalf. You must submit a notification designating this person to your local tax office and municipal tax division before departure.

The Pension Lump-sum Withdrawal Payment#

Foreign nationals who have contributed to Japan’s public pension systems (National Pension or Employees’ Pension Insurance) for at least six months can claim a “Lump-sum Withdrawal Payment” (Dattai Ichijikin) after leaving Japan. For Permanent Residents who have worked in Japan for many years, this amount can be significant.

Eligibility Criteria#

You must meet all the following conditions:

1. You do not possess Japanese nationality.
2. You have six months or more of coverage periods under the Japanese public pension system.
3. You no longer have a registered address in Japan (you have submitted the Moving-out Notification).
4. You have never established the right to receive pension benefits (including disability allowance).

Application Period and Procedure#

You must mail the “Claim for the Lump-sum Withdrawal Payment” to the Japan Pension Service within two years of your departure (specifically, within two years of no longer having a registered address in Japan). Required documents include:

• The application form.
• A copy of your passport (pages showing your ID and the date of final departure).
• Documents verifying your bank account information (the account must be in your name).
• Your Pension Handbook (Nenkin Techo) or Basic Pension Number Notice.

Important Note: The 20.42% Withholding Tax#

When receiving the Lump-sum Withdrawal Payment from the Employees’ Pension Insurance (Kosei Nenkin), a 20.42% income tax is automatically withheld at the source. This means you only receive approximately 80% of the calculated amount in your bank account initially. However, you can reclaim this withheld tax.

Procedure for Tax Refund on the Lump-sum Payment#

To recover the 20.42% tax withheld, you must file a tax return (specifically, a claim for a refund on retirement income) with the Japanese tax office.

1. Receive the Notice: After your pension claim is processed, the Japan Pension Service will send a “Notice of Entitlement for Lump-sum Withdrawal Payment” to your overseas address. This document shows the amount paid and the tax withheld.
2. Utilize Your Tax Representative: Since you are no longer in Japan, you cannot file this return in person. You must mail the original “Notice of Entitlement” to your Tax Representative in Japan.
3. Filing the Return: The Tax Representative files the tax return at the tax office that had jurisdiction over your last address in Japan.
4. Receipt of Refund: The tax refund will be deposited into the Tax Representative’s bank account in Japan. The representative must then remit the funds to you overseas.

Conclusion#

When a Permanent Resident returns to their home country permanently, it involves more than just packing luggage. It requires a systematic approach involving the surrender of the Residence Card at immigration, the removal of residency records at City Hall, and the settlement of taxes. Furthermore, claiming the Pension Lump-sum Withdrawal Payment is a vital right to recover a portion of your contributions. Because the process—especially the secondary tax refund—requires a Tax Representative in Japan, planning and securing a trustworthy contact before departure is essential for a smooth transition.