Furusato Nozei is a program created in 2008 by the Japanese government to encourage taxpayers in Japan to pay part of their taxes in advance to a different municipality than the one in which they are residing.
The program was created to counterbalance the number of taxpayers in countryside regions and big metropolitan areas in the hope of supporting regional areas which struggle with depopulation: as workers move to bigger cities such as Tokyo and Osaka for work, the taxpayers left in rural areas become lower and lower.
Is Furusato Nozei Open to Foreign Residents?
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For Japanese, the great thing about Furusato Nozei is that even if you had to move far from your hometown – like it typically happens to freshly graduated students who start working far from their hometown – you can still support your local area with this program.
You might wonder: why go through the hassle of filing part of your taxes to a different municipality? Well, this is the best part of Furusato Nozei: you can choose a “gift” from the area you have supported, ranging from food and fresh produce to regional products and crafts, as a token of gratitude.
The excellent news about Furusato Nozei is that it is open to all Japan-based taxpayers, regardless of nationality or resident status.
Here Is What You Need to Know to Apply to Furusato Nozei
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The process could seem tricky, but it is actually pretty straightforward, and we have summarized it here:
- Roughly understand how much you can devote to donate to your preferred municipality. There are many free calculators online both in English and Japanese, but the amount will depend on your yearly salary.
- Browse through the different products available and choose your preferred “gift”. There are many websites available through which you can apply to Furusato Nozei and choose between the range of available options:
Furusato Choice: furusato-tax.jp
Furupro (JTB): furu-po.com
- Make sure to check out the expected delivery of the product you choose because some of them are seasonal, and their delivery can be even months away from the date of the donation.
- Once you have chosen, proceed to the checkout to finalize the donation.
- If you are a salaried employee and you have donated to less than 5 municipalities, to be able to deduct the amount you have already paid from your yearly tax amount income, before finalizing your deduction, make sure to tick the option to receive a “One-Stop form (特例申請書の送付を希望)” from the municipality you have donated to.
- Once you receive it, fill it out and mail the completed form and a photocopy of your My Number card to the municipality where you donated before January 10th of the following year.
- You will be able to confirm that the amount you donated through Furusato Nozei has been deducted from your taxes when you receive the Company “Notice of Resident Tax (住民税確定通知書)” in June.
While this program is targeted at Japanese people, there were not many resources available in English until recently. But with the foreign resident community growing bigger and bigger, more guides and resources have become available online, such as furusato-japan.com, whose founders also periodically organize webinars to help you navigate the Furusato Nozei system.
The only other point to keep in mind is that to participate in Furusato Nozei, a yearly fee of 2,000 yen is required, which will not be deducted from your taxes for the year.
Start Participating in Furusato Nozei Now
Even though the deadline to apply and send your “One-stop form” is early December, we encourage you to start browsing and making donations as early as possible since many of the products available as “thank you” gifts are seasonal or could sell outvery quickly: leave the donation to the last will minute, and you will see your pool of choices become way more limited than for example if you apply in May or June.
More about tax in this article!
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