2022 Furusato Nozei Question Thread

[rogueebear]

@philip248 “50 different places”

As long as it falls within your Furusato Nozei allowance.

You’d probably need a pretty high taxable income to have an allowance suitable enough to support 50 “donations”.

 

[fillipos]

@mototothemax Is it normal for the confirmation of thank-you items to be delayed on some products? I have received for some items I donated for yesterday but not others. Thanks

 

[dee436]

@fillipos Yes, it varies by municipality. The important thing for whether the donation counts for this year or not is when the payment is processed, which may depend more on the platform and payment method you're using than the municipality.

 

[fillipos]

@dee436 Thanks - by the look of my credit card online the payment has gone out so fingers crossed

 

[prabakaran]

@fillipos Yes, this is quite normal. I see a wide range from different municipalities/platforms.

 

[kimosabe2019]

@mototothemax How does the "additional income" part work (equal to the value of the item/s you get)? Aren't you being taxed on additional income like any other income?

So my donation provides a yen-for-yen reduction of my income and residence taxes (aside from 2000 yen), but then I get taxed on the imputed value of the item/s?

 

[prabakaran]

@kimosabe2019

There is an annual exemption to "temporary income" of ¥500,000, and that Furusato Nozei gifts count as "temporary income". This means, using the 30% guideline for the value of gifts to donations, if you donate more than ¥1,666,667, or you have other "temporary income" (lottery wins, insurance payouts, etc), you will be taxed on that income.

You won't be taxed on the value of your items, unless you fall into the bolded situations above.

 

[kimosabe2019]

@prabakaran That's interesting because the online calculators don't seem to take this into account. I guess in theory, some of the "gifts" are still worth it even if you have to pay tax on them. Others seem to be grossly over-"priced" (like 600,000 donation to get a Dyson air purifier) such that you would never want to pay tax on them.

 

[prabakaran]

@kimosabe2019 Yes, even if you do fall over the "temporary income" limit of ¥500,000 Furusato Nozei is still worth it, as you are getting value back > 0.

 

[kristhuy]

@kimosabe2019 The mainstream consensus is that the products you receive from furusato nozei constitute "gifts", and gifts from companies/governments are treated as "temporary income". So in principle you are required to declare and pay tax on the value of all products you receive.

However, the first 500,000 yen worth of "temporary income" received by each taxpayer is tax-free. So unless you have other significant sources of temporary income, or you make >1.5 million yen worth of furusato nozei donations, you can probably ignore the taxable nature of the gifts.

 

[mgreene]

@mototothemax I am a little lost here… here is my situation:
- I earned around 19.8m JPY in FY21
- I spent around 420k on furusato nozei, 4 purchases using the quick method on furusato choice.
- I filed my YETA via work since I earned less than 20m JPY that year
- I was told by my colleagues no more action was needed so I didn’t do anything re: “one stop” paperwork in FY21

Q- was I supposed to? Did I not benefit from reduced residence tax last year as a result? If yes to these two questions, is it too late / have I just made some very large donations to some random municipalities?

• this year (FY22) I have earned more - approx 23m JPY
• the calculator on furusato choice told me I had 850k to spend but to be cautious, I spent 640k instead

Q- what do I do now? Normally when I earn more than 20m yen I take myself down to the tax office to manually file, do I do that as usual but tell them about my FN purchases? Is there a deadline for this?

If all above is very complicated should I just pay an accountant to refile everything for me?

 

[phillev]

@mgreene Sorry, could you clarify about the dates? You said “FY22”, but I think that’s this year… What did you do in what year?

 

[mgreene]

@phillev Sorry yes that first point should have read FY21, have edited

 

[phillev]

@mgreene Ok, I see. So, it sounds like you didn’t report your Furusato Nozei last year and therefore you’ve will have been paying your non-reduced residence tax. Luckily, you can amend this by doing what’s called a 還付申告 (tax refund), which effectively looks the same as a 確定申告 (final income tax return) up to 5 years after the fact. I would do that as soon as possible.

Are you aware of the online filing tool? You can reach the page here. I would recommend filing one for 2021 and then you can use it again to file for the 2022 after the start of the new year. You can either file through etax using your MyNumber card, an ID and password, or you can have it print off the papers and you can take them to the tax office. I’d highly recommend etax, as you don’t have to go to the tax office and it’s quite quick.

If you’re confident enough with your Japanese you can definitely do it by yourself. If you’re not confident about it then using an accountant would be fine. Be sure to let them know that you want to do two years worth of filing.

 

[mgreene]

@phillev Thank you for your advice, it’s very kind of you to help me

 

[kristhuy]

@mgreene If by "FY22" you mean "2021", then you can simply file an income tax return for 2021 to fix this. The NTA will give you an income tax refund and then pass your return on to your municipality, who will give you a residence tax refund.

For your 2022 income tax return (due by March 15, 2023), just declare your FN donations and you should receive the appropriate refund (partly via income tax and partly via residence tax).

 

[mgreene]

@kristhuy Thank you, this is a big relief!

 

[koko081012]

@mototothemax Maybe this is a silly question, but the verbiage on explanation sites isn't clear to me. JT reports that

For instance, many municipalities offer 15 to 20 kilograms of locally grown rice as gifts to those who donate ¥10,000. Once the tax deduction is applied, the donor has essentially paid only ¥2,000 for such a large amount of high-quality rice

But elsewhere in the same article it says you donate ¥10,000 (or other amount) to receive a tax deduction for the same amount, at the cost of ¥2,000 per instance. But a tax deduction usually means "I don't pay tax on this money", not "you get the money back in its entirety".

So if I spend ¥10,000 on rice, paying ¥2,000 fee (for a total of ¥12,000 spent), if it works like I think tax deductions work, that would mean I don't have to pay tax on ¥12,000, so maybe I save ¥4,000 in taxes, thus effectively paying ¥8,000 for the rice. But the way people talk about it it often sounds closer to a total refund of money spent in this way, which is a bit different from my understanding of a "tax deduction" (which may also be incorrect, admittedly).

 

[prabakaran]

@koko081012 You will get back everything on your taxes, minus ¥2,000. So if you qualify within the limits to spend, say, ¥100,000 on Furusato Nozei, ¥98,000 is coming back in tax refunds. Most people don't care about the ¥2,000 because once you exceed a FN limit of ~¥6,000, the value of goods received is greater than the administrative fee.

So it's reasonable to say you will "get the money back in its entirety."

 

[koko081012]

@prabakaran Thanks, that's what I was guessing, but wanted to check because of the wording!