Defined Contribution in Japan has 3 tax incentives regardless of corporate type and individual type（iDeCo).
First, contributions are not taxed.
In case of optional DC plan,which is corporate type, employee can choose whether you join the DC or not. Suppose that monthly contribution is 10,000JPY. If you don’t join, you can receive 10,000JPY as saraly and it’s taxable normally.
If you join, it’s not taxed.
In case of individual type, full amount of contributions is regarded income deduction.
Next, profits from investment are not taxed.
Basically, you have to pay 20.315% taxation when you get investment profits like interest,dividend and capital gain.
However, as long as you operate your money in DC, these profits are not taxed.
Last one is receipt of pension benefits.
When receiving pension benefits, some tax deductions apply, and full amount of the benefits or a certain portion of the benefits are tax examption.But, note that, tax incentives depends on your other income and other factors in the year.
Taxt burden view point, Lump sum may give advantage, or installments may give it. Taking them into account, you should decide how you recieve in advance.
Things to be considered before participating in DC
Defined Contribution in Japan