How to stop paying social security in multiple countries (that have a totalization agreement, US and Japan)

Question

I'm working for a small US company remotely from Japan. The company doesn't have a branch in Japan or anything, so American social security tax is still being deducted from my paycheck (payroll is all done under an American address)

However, since I don't have any plans to move back to the US in the next 5 years, and Japan and the US have a totalization agreement for social security, I should be paying the tax in Japan, and not the US (according to my research from Googling & from talking to the social security information desk in Japan). Currently I'm paying in both countries.

I can't seem to find any resources that explain what I need to do to stop paying social security in the US. What kind of paperwork needs to happen? Is it even possible when it's a small company with no Japanese branch?

Answer 1

As your question suggests, you should not have to pay social security tax in both countries, thanks to their totalization agreement. The US Social Security Administration (SSA) provides details on the US totalization agreements with each of 29 countries. Their page on the US totalization agreement with Japan answers your question as follows:

• If you are working in Japan, for a US employer who sent you to work in Japan for more than five years, then ... your Social Security coverage and taxes will be only with Japan.
• "To establish your exemption from coverage under the U.S. Social Security system, your employer in Japan must request a certificate of coverage (form J/USA 6) from the local Japanese social insurance agency that collects your Social Security taxes in Japan." The US SSA website gives detailed instructions for such a request. (Note that J/USA 6 is different from USA/J 6.)
• "Certificates of coverage issued by Japan should be retained by the employer in the United States in case of an audit by the Internal Revenue Service (IRS). No copies should be sent to IRS unless specifically requested by IRS."

The Japanese Social Security website also information about the totalization agreement, although what I found about your situation was still rather vague when I put it through Google translate:

• 長期派遣者などが日米協定に基づいて日本の社会保障制度のみに加入する場合、そのことを証明する適用証明書の交付を受ける必要があります。適用証明書の交付を受けるためには、日本の社会保障制度への加入が条件となります。前述した、日本からアメリカへ派遣される場合の手続きに準じ、原則事業主（自営業者の場合は本人）が、年金事務所に「適用証明書交付申請書」を提出することにより、交付を受けることができます。

As I understand it, this means your employer needs to submit social security taxes to Japan on your behalf, in order to get the certificate of coverage from Japan, so that they will not have to submit social security taxes to the US on your behalf. You said that you're already paying Japanese social security taxes, but you also said that your US employer is paying you "under a US address", so I must have misunderstood either the facts of your question or the mechanism by which Japan collects your social security taxes. If your Japanese social security taxes are being collected properly, then the Japanese Social Security office should be able to answer your question and give your employer the required form. With that form in hand and paying the Japanese social security taxes, your US employer should no longer pay or withhold US social security taxes for you.

Answer 2

If you want to stop paying social security in the US, then you need to be on a Japanese payroll, not a US payroll. The bottom line is that as long as you are a US payroll, then US social security must be withheld. Your US employer has no way to stop withholding this from your paycheck.