How is Australian Superannuation treated?

[ayetobee]

I have found out further information on Super.
When you switch to 'Retirement mode' the funds are still owned by the Superannuation Trust, held in your name. It does not become your asset, therefore, you do not have to claim it on the Oversees Asset Reporting report.
You only need to declare the amount the Superannuation Fund pays you, which is considered income in Japan.
Upon your passing, the remaining balance is transferred into cash and paid out to your beneficiaries, which will be subject to Inheritance tax in Japan as well.

[UBear]

Good to know..

Sub-question in relation to having to pay local income taxes on the Oz pension.

In my case, I have been out of Oz cumulatively for 20+ years. The employer contributions I made whilst working in Australia from 20 + years ago only make up a small portion of the total current sum. The growth of the original principal was largely attributed to its own return.

Later years I started adding my own contributions to my superannuation scheme with after-tax income from Japan.

So, my question, at a minimum, would the Japan tax office consider the after-tax principal that I contributed non- taxable and only the return on contribution taxable?

[Tkydon]

As the Superannuation is a National Public Pension, you can claim the Public Pension Deduction against the annual Pension Income.

See the table here:
https://www.tax.metro.tokyo.lg.jp/book/ ... k2021e.pdf

Page 8
Calculating the Public Pension Plan Deduction (Calculation Table)

After deducting the Public Pension Plan Deduction and all other allowances and deductions from your total Aggregate Income, the total Taxable Income will be taxed at your National Marginal Tax Rate and Reconstruction Tax, and 10% Residents' Tax Rate.

[ayetobee]

UBear
The amount you nominate for the fund to pay you on a weekly/monthly/annual basis is considered income by the Japanese Tax Office, with tax subject to the calculations tkydon provided.
The monies in the superannuation fund are not considered to be owned by you while they are earning a return. They are owned by the Superannuation Fund in your name with a nomination on death and payout nomination on your weekly/monthly/annual or lump sum terms.
I spoke to the ATO and my superannuation fund and got those answers from them over the phone. I asked for references and the super fund referred me to their PDS, the ATO did the same (which I found very surprising).

[UBear]

I did not fare well from own calculations from all this and I appreciate that it probably is very much a case by case situation.

However, just hypothetically, if I was to target the following drawings from Super each year in retirement, ignoring currency exchange rate ups and downs, what would be the gross pension drawing to after tax (net) japan take home say for

30k super drawing (annual)
45k
60k AUD?

A net loss of around 30% after national tax, local tax, health insurance etc?

[Tkydon]

After making lots of assumptions, it depends on the Exchange Rate.

Assuming an exchange rate or AUD 1 = Y95

Then

AUD 30k super drawing (annual) = Y2,850,000
AUD 45k = Y4,275,000
AUD 60k = Y5,700,000

Not taxable in Aus under the Japan - Aus Tax Treaty - Article 17

Public Pension Tax Deduction - See Table on Page 8 - "Calculating the Public Pension Plan Deduction (Calculation Table)"
https://www.tax.metro.tokyo.lg.jp/book/ ... k2021e.pdf

Deduction depends on Age and amount of other income...

Taxable Income is the amount left after deduction of this and all other Deductions and Tax Credits

Assuming this is your only income, then

Income Tax Rates 総所得金額の合計、復興特別所得税、住民税の税率
Band (Taxable Income) - Marginal Tax rate (％) National + Reconstruction + Residents' Taxes = Total Max National & Residents' Taxes in Band Yen
Under 1,949,000 - 5% + 0.105% + 10% = 15.105% = Y97,705 + Y195,000
1,950,000 to 3,299,000 - 10% + 0.21% 10% = 20.21% = Y135,284 + Y135,000
3,300,000 to 6,949,000 - 20% + 0.42% 10% = 30.42% = Y731,553 + Y365,000
6,950,000 to 8,999,000 - 23% + 0.483% 10% = 33.483% = Y472,490 + Y205,000
9,000,000 to 17,999,000 - 33% + 0.693% 10% = 43.693% = Y982,158 + Y900,000
18,000,000 to 39,999,000 - 40% + 0.84% 10% = 50.84% = Y8,818,480 + Y2,200,000
Over 40,000,000 - 45% + 0.945% 10% = 55.945% No Limit...

[UBear]

would a more simple way to look at how australian super is taxed in japan is to just consider it as comparable to a local salary and thereby x taken as tax? or is tax a little lighter during retirement years?_