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Foreigners are welcome! How "Furusato" tax payment works, how to start, and popular websites.

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tax payment at home

Have you ever heard of "Furusato Tax Payment"? Not only will you receive local specialties and other returns, but you will also be able to deduct from your income and inhabitant taxes the portion of your donation that exceeds 2,000 yen.

For those born and raised overseas or foreign nationals living in Japan, this system may not be very familiar. To begin with, some may wonder if foreigners can also pay hometown taxes.

In this issue, we will explain in detail the basic structure of Furusato tax payment, the actual procedure flow, and the conditions for deductions. We will also introduce information on profitable tax returns and recommended Furusato tax sites.

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What is Hometown Tax Payment?

Furusato tax payment is a system that allows you to make a "donation" to your hometown, a municipality that has been a great help to you, or a municipality that you would like to support. Although the word "tax payment" may give a formal image, when you make a donation, you will receive special products from the municipality as a token of appreciation.

What is even more attractive is that the portion of the donation amount exceeding 2,000 yen will be deducted from your income tax and inhabitant tax. In other words, this is a very economical system where you can not only contribute to the local community by making a donation to the local government, but also receive a tax deduction.

However, in order to receive the deduction, you must make a donation within a certain limit according to your income status. Please note that if you exceed the limit, you will be responsible for the excess amount of your donation.

Nevertheless, within the limit of the deduction, it is an attractive program that not only allows you to obtain local specialties and other items at a great value for only ¥2,000 in real terms, but also to support local governments. This is especially useful for those who are from rural areas, or as a way to give back to the local communities that have helped you during your travels.

Can foreigners pay tax in Furusato?

In conclusion, Furusato tax payment is available to foreign residents. However, there is a condition that they must pay income tax and inhabitant tax in Japan.

Specifically speaking, if you are a foreigner residing in Japan and have a certain level of income, you can receive a return gift or receive a tax deduction for your hometown tax payment. This applies to foreign students who have a part-time job and foreigners who work for a Japanese company.

By the way, you can make a donation to the municipality of your choice in Furusato Tax Payment. When you hear the word "hometown," you may have a strong image that it refers to the land where you were born and raised, but this is not actually the case.

For example, you can donate to any municipality that you would like to support, whether it is a place you were impressed by on a trip, a nostalgic place where you used to live, or a municipality that attracts you with its special products.

  • Municipalities to support
  • Municipalities with attractive returns
  • Municipalities that allow you to choose how your donation will be used, etc.

One of the attractions of "Furusato" is that you can donate to municipalities that you find attractive.

【3STEP】How to start paying taxes in your hometown, how to do it, and the procedure

Some of you may be interested in Furusato Tax, but may not know how exactly to get started. From here, we will explain how to start paying Furusato tax in three steps.

STEP 1 《Research》 《Investigation

First, it is important to understand the limit of deductions you can receive from your hometown tax payment. The deduction limit depends on your annual income and family structure. For an approximate guide, please refer to the Ministry of Internal Affairs and Communications'Furusato Tax Portal SiteIt can also be found at

Next, select the municipality you wish to support. In doing so, it is a good idea to refer to the return goods offered by each municipality and how the donation will be used. Some municipalities may use the donation for a specific purpose, such as promotion of local tourism or support for child-raising. It is one way to choose a municipality that suits your sense of values, rather than simply relying on returned goods.

STEP ②《Donation》》(Donation》)

Once the donation destination is decided, the actual donation procedure is carried out. It is convenient to use the Furusato Tax Payment website when making a Furusato tax payment. The Furusato Tax Payment site allows you to check the returns from all local governments in Japan at once and complete the donation procedure in a one-stop shop. Incidentally, it is also possible to simulate the maximum amount of deduction based on your income.

The registration process for each site differs slightly, but the general process is to enter basic information such as name, address, and e-mail address, and then pay the donation by credit card or bank transfer. Once the donation is completed, the local government will send you the returned goods and a "Certificate of Receipt of Donation". This certificate is required for tax deductions, so please keep it in a safe place.

*The hometown tax sites are introduced at the end of this article.

STEP ③《Procedure

Simply making a donation does not entitle you to a tax deduction. You must file a tax return or complete the One-Stop Special Exception System procedures.

To file a tax return, submit a tax return to the nearest tax office by March 15 of the year following the year of donation. By attaching a "Certificate of Receipt of Donation," you can receive a tax deduction for your donation.

On the other hand, the One-Stop Special Exception System is a convenient system that does not require a final tax return. In order to use this system, several conditions must be met, but if the conditions are met, deductions can be received simply by submitting an application to the municipality to which the donation is made.

What is the One-Stop Special Exception System?

Let's take a closer look at the One-Stop Special Exception System mentioned earlier. This is a very convenient system that does not require a final tax return and allows you to receive deductions simply by submitting documents to the municipality to which you donate.

The One-Stop Special Exception System is available when the following conditions are met

  • Company employees and other salaried employees who normally do not need to file a tax return.
  • Number of hometowns that have paid tax within one year is within 5 organizations.
  • Total donation within the maximum deduction amount

Those who are eligible need only fill out the application form, attach the "Certificate of Receipt of Donation" and send it to the local government to which you are donating. In principle, the procedure must be completed by January 10 of the year following the year in which the donation was made, so do not forget to apply by the deadline.

By following the above three steps, even foreign residents can participate in the Furusato tax payment. The donation procedure can be completed online, and the tax deduction procedure has been simplified to some extent, so the hurdle may not be as high as you think.

Furusato Tax Payment Structure and System

At first glance, Furusato may seem like a complicated system, but once you understand the basic structure, it is not that difficult.

Simply put, Furusato tax payment is a system of "donation" to the local government you wish to support. When you make a donation, you will receive local specialties as a thank-you gift. In addition, the portion of the donation amount exceeding 2,000 yen will be deducted from your income tax and inhabitant tax.

In other words, it is like paying taxes to the local government in the form of a donation. It is as if you are paying in advance the taxes that you were supposed to pay in the future by voluntarily choosing a place to donate your money.

If you make a donation to a municipality, you will not receive any amount of specialty products or other returns based on the amount of your donation. The maximum amount of returned goods is set at approximately 30% of the donation amount, which is within the range of the thank-you gift to promote the attractiveness of the region. Therefore, making unlimited donations for the purpose of returning items would be contrary to the purpose of the system.

In addition, each municipality discloses how it intends to use the donations from Furusato taxpayers. If you know how your donation will be used, you will be able to choose the recipient of your donation in a way that reflects your own wishes. It is desirable to make donations with a sense of support to the local government, rather than simply purchasing returned goods.

When are taxes deductible?

The timing of tax deductions from Furusato tax payments differs between income tax and inhabitant tax.

Income tax is deductible for the year in which the donation is made. In other words, if you file a tax return for your hometown in the year 2023, your income tax for the year 2023 will be deductible. If you file a tax return and receive a deduction for your donation, you will receive a refund for the income tax you have overpaid.

On the other hand, the inhabitant tax is deducted for the following fiscal year, meaning that if you pay your hometown tax in 2023, your inhabitant tax for the fiscal year 2024 will be reduced.

Please note that there is a gap between the timing of deductions for income tax and inhabitant tax. However, in principle, the procedure itself is done in a lump sum when you file your tax return for the year in which you make the donation, and the calculation of the deduction amount can be easily simulated on the Furusato Tax website, so there is no need to think that hard.

Returned goods you can get for your hometown tax payment

As we have explained, the appeal of hometown taxation is that in addition to receiving tax deductions, municipalities give back gifts to taxpayers.

Each municipality prepares return gifts centering on local specialties in order to fully showcase the charms of the region. The most commonly seen are fresh local agricultural products, marine products, and processed specialty products. For example, crabs from Hokkaido, sponge cakes from Nagasaki, and muskmelons from Shizuoka are standard return gifts. In addition, many municipalities offer unique gifts such as locally brewed sake, handicrafts, lodging coupons, and experience-based plans.

The details of returned goods can be checked on each municipality's website or on the Furusato Tax Portal site. Some of them may have different return gifts to choose from depending on the amount of donation, even for the same municipality, so it is important to check carefully. Depending on the conditions, you may be able to get a very reasonable return gift.

In addition, some local governments may offer ways to use donations for specific purposes, such as disaster relief or community development, for which no returns are given. We recommend that you consider these options and look for a donation destination that suits you.

Five Advantages of Hometown Tax Payment

From here, we will explain the appeal of Furusato tax payment, dividing it into merits and demerits. First, let us look at the advantages of using Furusato Tax.

1. luxurious returned goods

One of the major attractions of the Furusato tax system is the gorgeous gifts that are returned. Municipalities throughout Japan offer local delicacies as gifts to be returned. Among the most popular are food returns such as brand-name Japanese beef, crabs, and fruits. Some municipalities offer returns equivalent to 40-50% of the donation amount, so if you make good use of them, you can enjoy considerable savings.

In addition to food products, there are also other attractive local products such as locally brewed sake, crafts, travel coupons, and other gifts with a rich regional flavor. Through the returned goods, you will have a chance to learn more about the municipality, and you may even develop an attachment to the area by actually tasting the local specialties.

2. tax deductions

Tax deductions through Furusato tax payment are another benefit that should not be overlooked. In principle, the full amount of any donation exceeding 2,000 yen will be deducted from your income and inhabitant taxes.

Suppose you paid 10,000 yen as a hometown tax payment, the deductible amount would be 8,000 yen after subtracting 2,000 yen. The larger the deduction amount, the more you can save money because you can reduce the actual amount you have to pay.

You can choose the municipality you want to support.

In Furusato tax payment, you can choose the municipality you wish to support and make a donation. This ability to choose your own tax recipient is one of the major advantages of Furusato tax payment.

Recently, some municipalities have prepared a menu of donations linked to specific programs, such as support for recovery from natural disasters or childcare support. This means that you can choose how to use your donation and decide where to pay your taxes. If you make a donation as if you are returning a favor to the municipality that has taken care of you, you may find it even more fulfilling.

4. the ability to designate how the donation will be used

In some cases, Furusato taxpayers may be able to specify how their donations will be used. As mentioned earlier, in many cases, each municipality provides specific instructions on how the donation will be used. For example, the use of the donation may be set in line with the municipality's priority policies, such as childcare support, education enhancement, or revitalization of the local economy. When making a donation, you can specify where your donation will go by selecting the area you wish to support from among these options.

This is a major difference from ordinary taxes. In principle, income tax and inhabitant tax are used for local government operations as general funds that are not tied to a specific use. In contrast, in Furusato taxation, donations can be allocated to reflect taxpayers' intentions.

Depending on the site you use, you can also get points.

Furusato may offer points or other benefits depending on the site you use.

For example, with "Rakuten Furusato Tax Payment", you can earn 1 Rakuten Point per 100 yen. The accumulated points can be used to pay for donations and for shopping at Rakuten Ichiba. Also, if you use "Furnavi", you can earn Furnavi Coins that can be exchanged for Amazon gift certificates and other items.

If you take advantage of these benefits, you can also enjoy the benefits of regular shopping.

Three disadvantages of hometown taxation

While there are many profitable aspects to Furusato tax payment, there are also several disadvantages. The following points should be noted when using Furusato tax payment.

1. not tax-saving

Some people may think that "Furusato tax payment is a tax-saving measure," but this is not accurate. Furusato tax payment is just an act of donation to local governments. It does not mean that the total amount of tax paid will be reduced, only that the amount of donation will be deducted from income tax and inhabitant tax.

For example, suppose a person with an annual income of 5 million yen pays 100,000 yen in hometown taxes. In this case, 98,000 yen out of 100,000 yen, excluding 2,000 yen, is deductible for income tax and inhabitant tax. In other words, the amount of income tax and inhabitant tax normally payable will be reduced by 98,000 yen.

In other words, Furusato tax payment is like paying in advance the tax that you were originally supposed to pay, so you do not gain anything by deducting 2,000 yen from the donation you paid. It is important to understand that you will receive a gift in return for your donation to the local government.

Amounts in excess of the deductible limit are to be paid out-of-pocket.

There is a certain limit to the amount that can be deducted as a tax credit for taxpayers who live in Furusato. The deduction limit varies depending on annual income and family structure, but the general guideline is approximately 50,000 yen for an annual income in the 4 million yen range and 130,000 yen for an annual income in the 8 million yen range.

Suppose that a person with a deduction limit of 60,000 yen pays 100,000 yen in hometown tax. In that case, only up to 60,000 yen would be deductible, and the remaining 40,000 yen would be fully paid by the taxpayer. No matter how attractive the returned goods may be, there is no tax benefit for the portion exceeding the deduction limit.

Be sure to check the deduction limit when paying taxes in your hometown. Websites where you can simulate the deduction are also helpful.

Those who do not incur income and inhabitant taxes lose out.

To begin with, people who do not pay income tax or inhabitant tax cannot receive tax deductions if they pay Furusato tax. For example, people whose income is below the tax exemption limit and who do not incur income tax, or people whose dependents are exempt from residential taxation fall under this category.

If you make a Furusato tax payment in such a case, you will be responsible for the entire amount of your donation minus 2,000 yen. Please note that even if you donate thinking you will get a good deal on the returned goods, you will actually end up losing money.

3 popular hometown tax sites for foreigners

Finally, we recommend three hometown tax sites for foreign residents. If you want to start paying taxes in your hometown, you may feel more comfortable using a major portal site.

1. Rakuten Furusato Tax

This is a hometown tax payment portal operated by the well-known major e-commerce site Rakuten. It is recommended for those who often use Rakuten Ichiba.

The site boasts an overwhelming selection of over 40,000 returned goods listed. The site is designed to be easy to use even for beginners, with each municipality having its own special page and an extensive popularity ranking. The donation process is simple, and even foreign residents will be able to use the site without hesitation.

Number of municipalities1,630 (as of May 2024)
point redemptionUp to 31
Official Site【 Rakuten Ichiba 】 Rakuten Hometown Tax｜Easy even for first-time users!

2. hull navigation

FURUNAVI" is a portal site specializing in hometown tax payments and focusing on regional development.

One of the features is the existence of "furunavi coins" that can be exchanged for Amazon gift certificates, PayPay balances, and other items. In effect, you receive money certificates and points that can be used for Amazon and everyday purchases, making it the best value for money in the industry.

We offer a wide variety of community-based returns, making us ideal for those looking for specialty products that are particular to the area.

Number of municipalities1,266 (as of May 2024)
point redemption-
Official SiteFurusato Tax Payment Site 【 Furunabi 】

3. hometown choice

Furusato Choice is a well-established hometown tax payment site boasting one of the largest selection of products in Japan.

There are more than 100,000 returned goods listed on the site, and you may be able to find minor specialties that you cannot find on other sites. Another feature of the site is that it introduces many municipalities that allow you to designate how your donation will be used. You can choose the areas you want to support and make a donation, so you will feel that you are supporting the municipality.

The site has a large number of site-exclusive thank-you gifts and is recommended for those who want to take their time in searching for the returns they want.

Number of municipalities1,686 (as of May 2024)
point redemption-
Official Site【 Furusato Choice 】 No.1 Furusato Tax Payment Site in terms of the number of tax gifts listed

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summary

In this issue, we have explained the outline of "hometown tax payment" for foreign residents.

Furusato tax payment is a system whereby tax deductions can be received by donating to a municipality. The appeal of this system is that you can receive specialties of the municipality as a thank-you gift. Foreign nationals can also use the Furusato tax payment system as long as they pay income tax and inhabitant tax in Japan.

We hope that you will become more interested in local communities in Japan through Furusato Tax Payment. By supporting a municipality that suits you, you may find a new hometown. We hope that you will take this opportunity to deepen your understanding of Furusato Tax and experience the charms of local communities at a reasonable price.

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