The lump-sum receipt is treated as retirement income. The retirement income deduction applies to reduce he tax burden.

The periodic receipt is treated as miscellaneous income related to public pensions, etc. Taxes are withheld at a fixed rate.
When calculating miscellaneous income on a final tax return, the public pension deduction applies to reduce the tax burden.

 

It is difficult to say which receiving method will be more tax-effective as it depends on the recipient’s age at the time of receipt, the amount receivable, and the status of retirement benefits other than defined contribution pension plans.
For more information about taxes, please contact your local tax office or the call center of the National Tax Agency.