🏠 What is “Furusato Nozei”?
“Furusato Nozei” (Hometown Tax Donation) is a system that allows you to donate to a local government (city, town, or village) you wish to support.
When you make a donation, you receive thank-you gifts (local specialties, etc.), and for the portion of your donation exceeding ¥2,000, you can receive tax credits (deductions) from your income tax and residence tax.
💰 How the Tax Deduction Works
If you file a tax return:
Part of your donation is deducted from your income tax for the current year, and the remaining amount is deducted from your residence tax for the following year.
Approximate calculation:
(Donation − ¥2,000) × Income Tax Rate (5–45%) → Deduction from income tax
Remaining amount (Donation − ¥2,000) → Deduction from next year’s residence tax
If you use the One-Stop Special System:
For those who do not file a tax return (such as salary earners),
the entire deduction is applied to the next year’s residence tax
(no income tax deduction).
⚠️ Important Note on Gifts
The gifts you receive have economic value.
If the total value of gifts received in one year exceeds ¥500,000,
it needs to be declared as temporary income in your tax return.
🧭 How to Do “Furusato Nozei”
1️⃣ Choose a municipality to donate to
Select a local government and gifts on websites such as
Furusato Choice, Satofuru, or Rakuten Furusato Nozei.
2️⃣ Make a donation
Pay online using a credit card, bank transfer, or PayPay.
3️⃣ Receive a donation receipt
You will receive a donation certificate from the municipality (paper or electronic).
4️⃣ Apply for the tax deduction
If filing a tax return → Attach the certificate and file your return.
If using the One-Stop Special System → Submit the application form when donating.
5️⃣ Receive the tax benefit
Income tax: Deducted for the current year
Residence tax: Deducted from the following year’s tax amount
💡 Key Points
✅ Foreign residents who pay residence tax in Japan can also use this system.
✅ Remember to declare temporary income if the total value of gifts exceeds ¥500,000.
