Gulliver wrote: ↑Sun Jul 11, 2021 6:05 pm
The disclaimer at the bottom of page 23 it’s very interesting/as clear as mud. It states:
“Non requirement of filing tax returns concerning pension recipients
You are not required to file a return for income tax etc. if (a) your amount of earnings from public pensions is 4,000,000 yen or less,
(b) all the pensions you received are subject to the Japanese withholding (excluding ones that are covered by the provision in Article 203-7 of the Income Tax Act (public pensions, etc. not subject to the Japanese withholding), and
(c) your amount of income (excluding miscellaneous income from public pensions, etc.) is 200,000 yen or less.
* Even if you are not required to file a return for income tax etc., you are required to file a return for income tax etc. in order to receive refunds of income tax etc.
* For the inhabitant tax, see page 65.”
Questions:
1. So for section (a) if you make, for example, only ¥2 million foreign pension you do not have to file a tax return?
2. Section (b): Which pensions are they talking about that are and aren’t subject to Japanese tax withholding? Isn’t everything “subject”?
3. Section (c): So if you make ¥2 million public pension and ¥100,000 add a side gig, you don’t have to file a tax return?
4 then it says “* Even if you are not required to file a return for income tax etc., you are required to file a return for income tax etc.” are they totally contradicting themselves or is that just a bad translation? What in the world does that mean?
Thanks again for your help.
In answer to Gulliver's questions, inline.
Questions:
1. So for section (a) if you make, for example, only ¥2 million foreign pension you do not have to file a tax return?
No, if you receive a Foreign pension you DO have to file a tax return, as this is Excluded by (b)
Foreign Pensions have not be subjected to Japanese Withholding Tax. Therefore, they do not satisfy Section (b), so you must file.
2. Section (b): Which pensions are they talking about that are and aren’t subject to Japanese tax withholding? Isn’t everything “subject”?
Everything is liable for Japanese taxes. 'Subject to Withholding" means that the payments have already had the required Japanese Taxes withheld by the payer at source. (PAYE or PAYG) This is a legal requirement of Japanese Pension Payers.
Any pensions paid IN Japan have had the Japan taxes withheld at source, by the payer, and therefore, you can receive up to ¥2 million of post-tax Japanese Sourced Pensions without having to file. If the amount goes over ¥2 million, then you must file.
This is clearly not the case for Pensions paid overseas. Any pensions paid outside Japan have NOT had the Japanese taxes withheld at source, by the payer, and therefore, you must file.
The payments may have been subject to taxes of the remote country, but these don't count... This is not Japanese Withholding, and so you must file.
Also, check article 17 of any Tax Treaty between the country where the pension is being paid and Japan. If you are a Permanent Resident of Japan for Tax Purposes, then under most of the Treaties I have read, Only Japan is entitled to tax the Pension Income (including the US, UK, Aus Treaties).
See your Country's Tax Treaty here.
https://www.mof.go.jp/english/policy/ta ... st_en.html
3. Section (c): So if you make ¥2 million public pension and ¥100,000 add a side gig, you don’t have to file a tax return?
Yes, if you receive a Japanese Pension Net of Withholding Tax, then you can make up to ¥2 million Taxed Pension, and a side income of upto 200,000 yen without having to file and pay taxes on that 200,000 yen.
No, if you receive a Foreign Pension it will not have had Japanese Taxes withheld, and you must file.
4 then it says “* Even if you are not required to file a return for income tax etc., you are required to file a return for income tax etc.” are they totally contradicting themselves or is that just a bad translation? What in the world does that mean?
You only quoted half of the sentence. The whole sentence says,
"* Even if you are not required to file a return for income tax etc., you are required to file a return for income tax etc. in order to receive refunds of income tax etc."
" in order to receive refunds of income tax etc." is the important bit...
This means, If you want to claim tax deductions for medical bills, insurance premiums, home loan insurance, Furusato Nozei, etc., so that those are paid with pre-tax Yen, and claim back the credit against the tax withheld on the Pension Income by the payer, or you wish to claim Foreign Tax Credits, then you have to file.
When you are employed, deductions for the medical bills, insurance premiums, home loan insurance (2nd year onwards), Furusato Nozei, etc. would be handled by your employer in the Nenmatsu Chosei.
There is no such thing as a Nenmatsu Chosei for the Pension income.
Therefore, the Only way to get the overpaid tax back is to file a Kakutei Shinkoku.
Even if the amount qualifies under (a) (less than Y2M Japanese Pension), (b) (has had Taxes withheld at source), and (c) (side income is less than Y200,000), if you want any kind of tax refund or want to claim any type of Foreign Tax Credit, then you must file.