What is Furusato Nozei
The Furusato Nozei Program, or Hometown Tax Donation Program, is a tax incentive scheme by the Japanese government to support the development of smaller, less funded municipalities.
Taxpayers can choose to donate to a city, prefecture, municipality or cause that they want to support, such as social and environmental programs and aid in times of disaster.
In return, taxpayers are exempted from a portion of their income and resident taxes and get to enjoy gifts such as wagyu, melons, sake and other premium local specialties delivered to them as a token of appreciation.
In brief, doing Furusato Nozei give you wonderful gifts※ and support the causes you believe in with your tax money at the same time.
※ Actually, the gifts cost 2,000 JPY, but the value of the gifts is far beyond this.
Steps of Furusato Nozei
- Find out the upper limit of your eligible donation
- Choose gifts online
- Receive gifts and receipt of your donation
- File for your hometown tax donation exemption and receive a deduction on your income tax (所得税) and/or resident’s tax (住民税) in the following fiscal year, minus a one time out-of-pocket payment of 2,000 JPY.
Recommand Sites
You need a site to do Furusato Nozei (They are basiclly online shop). These sites usually provide a calculator to calculate your maximum amount of donation, and you can choose the gifts you want (or the cause you are interested in) below this amount. Just follow the guide on the site, it’s easy to understand.
Here are some sites recommanded by 【2019年完全版】ふるさと納税サイト徹底比較！最もおすすめはこれ！ and other sources.
- FURUMARU (Support English and Chinese!!! They got really good guide, if you get confused by this article, just check this site)
- ふるさとプレミアム (Having a event now [2019/10/05], 20% of the donation will be returned as Amazon gift cards [specified items only])
- ふるなび (1%~3% returned as Amazon gift card)
- 楽天 (1% returned as rakuten point)
- ふるさとチョイス (Most types of gifts)
Tax Reduction
Most Important Part!!!
About One Stop Exemption (ワンストップ特例制度)
One Stop Exemption is a easier way to get tax reduction. (between One Stop Exemption and Income Tax Return)
- Eligibility：
- Salaried employee
- donated to 5 or less different cities, prefectures or municipalities in the calendar year
- When： Every donation
- Deadline： Before January 10th of the next year
- Refund Method： Deduction on your Residential Tax (住民税) for the next year
- How to:
- Get the Donation Deduction Application Form (usually sent together with the gifts)
- Submit the Donation Deduction Application Form and Identification Document & My Number Verification Document※ to the local government you donated to
※ 3 Types of document - If you have My Number Card (個人番号カード), just submit a copy of it (both side) - Else if you have My Number Notification Card(通知カード), submit a copy of it with My Number verification document - Else submit Japanese Residence Record with your My Number (住民票) with My Number verification document
My Number verification document can be a copy of one of the following: - Passport - Residence Card (在留カード) - Driver’s License - Driving Record Certificate - Disability Certificate - Mental Disability Certificate - Rehibilitation Certificate - Special permanent residence certificate