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What is Furusato Nozei?
Furusato Nozei, often called the “Hometown Tax Donation,” is a unique Japanese tax scheme that allows you to donate to any local government (city, town, or village) of your choice. In return, you can receive a significant tax deduction and enjoy specialty products from that region.
It was originally designed to support rural areas suffering from declining tax revenue due to urban migration. Today, it’s a popular way for residents across Japan to support local communities while benefiting from tax savings.
How Does It Work?
Instead of simply paying your income tax and residence tax to your local city, you can donate part of your taxes to another municipality. In return:
- You’ll get a tax deduction based on your donation amount.
- You’ll receive thank-you gifts, usually local specialties like fruits, meat, seafood, or crafts.
Although it’s called a “donation,” it’s mostly covered by the tax deduction. You only pay an out-of-pocket cost of 2,000 yen, no matter how much you donate (within your limit).
For example, if your income is 5 million yen, your maximum donation limit is roughly 60,000 yen. You will receive a 58,000 yen tax deduction and only bear the 2,000 yen cost.
Enjoy Delicious Local Gifts with Furusato Honpo
If you want to enjoy the best local gifts while using Furusato Nozei, consider using Furusato Honpo — a specialized portal site focused on Japan’s most delicious regional specialties.
- They offer high-quality products like branded Wagyu beef, crab, and Shine Muscat grapes—luxuries that are usually hard to buy on a daily budget.
- Furusato Honpo only lists products compliant with the official Furusato Nozei system, so you can donate with confidence.
- The site also runs campaigns where you can win Amazon gift cards, making your donation even more rewarding.
- If you love variety, their subscription (teiki-bin) service delivers your favorite specialties regularly to brighten your everyday life.
- Furusato Honpo is run by a trusted company, a 100% subsidiary of a Tokyo Stock Exchange listed group.
Whether you want to treat yourself or send a special gift to family or friends, Furusato Honpo makes it easy and fun to explore Japan’s local flavors while supporting communities.
Major Benefits of Furusato Nozei
- Receive Local Specialties as Gifts
Municipalities offer thank-you gifts worth up to 30% of your donation. This means a 60,000 yen donation could get you products worth up to 18,000 yen, in addition to the tax deduction. - Lower Your Income and Residence Taxes
Your total tax (income tax and residence tax) will be reduced in the next year, so you’re essentially pre-paying your taxes in the form of donations. - Choose How Your Donation is Used
You can decide how your donation will be used: disaster recovery, education, child support, environmental protection, and more.
Two Ways to Apply for Tax Deductions
- One-Stop Special System (ワンストップ特例制度):
No need to file a tax return. Just submit a form to the local government.
Conditions:- You are a salary earner who doesn’t need to file a tax return.
- You donated to 5 or fewer municipalities in one year.
- You submit the form by January 10th of the following year.
- Tax Return (確定申告):
If you’re self-employed, donated to 6+ municipalities, or already filing a tax return, you’ll claim the deduction when you file your taxes.
Simple 5-Step Process to Use Furusato Nozei
- Check Your Donation Limit
Your maximum deduction depends on your annual income and family situation. Use online calculators on official sites to check it. - Choose a Municipality and a Gift
Use major Furusato Nozei websites to search for regions and gifts you want to support. - Make a Donation
Pay using your preferred method—credit card, bank transfer, or convenience store payment. - Receive Your Gift and Receipt
Your gift will arrive in a few weeks to months. You’ll also receive a donation receipt, which you’ll need for tax procedures. - Apply for the Tax Deduction
Submit a One-Stop form or file a tax return the following year to complete your deduction.
Things to Watch Out For
- It’s a Tax Deduction, Not a Cash Refund:
Your tax payments will be reduced next year, but no cash will come back to you immediately. - Cash Flow:
You’ll pay the donation amount upfront, so only donate if your finances allow. - Correct Name Matching:
Make sure the donation and tax filer’s names match, especially if you use someone else’s credit card. - Payment Fees:
Depending on your payment method, extra fees (e.g., bank transfer fees) may apply. - Donation Limits for One-Stop:
If you donate to more than 5 municipalities, you can’t use the One-Stop system.
Final Thoughts
Furusato Nozei lets you support local communities, enjoy delicious gifts from across Japan, and lower your taxes. It’s a great opportunity for foreigners working in Japan to explore different regions and give back while optimizing their finances.
Start by checking your donation limit and explore what local gifts you might enjoy this year.
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