2023 Furusato Nozei Question Thread

[mototothemax]

There are now just 23 days left in the year for you to furiously finish using up your Furusato Nozei (ふるさと納税) allowance, which must be paid for before midnight, December 31st, 2023.

There are often a bunch of questions about Furusato Nozei allowances, the one-stop system, how to figure out what your limits are, or Furusato Nozei in general around this time, so we have decided to open up a questions thread dedicated to the topic. We'll keep the thread stickied for as long as there seems to be demand for it.

What is Furusato Nozei?​

Furusato Nozei, or the home-town tax program, offers tax-paying residents an opportunity to donate a portion of their residence tax to the "hometown" of their choice, generally in exchange for a gift worth approximately 30% of the donation amount.

What is the cost?​

The cost to use the furusato-nozei programme is ¥2000; the rest of the donations will return on your income and residence tax returns, assuming you do not exceed your limits.

What are the limits?​

• Estimate your own taxable income.
• If you do one-stop or your taxable income is less than 1.95 million yen, any of the regular FN donation limit calculation sites -- such as this one or the more advanced, but accurate one -- should be fine. Otherwise, use this tool to calculate your FN donation limit accurately.
• For a very nice post about FN limits and their interaction with how much you can donate and get back, check out our Guide to Furusato Nozei Donation Limits.
• If you have a residential mortgage tax credit and don’t do one-stop, avoid the regular calculation sites unless your taxable income is at least 10x larger than your tax credit (e.g., if you are eligible for a 200,000 yen credit, your taxable income should be at least 2,000,000 yen).

Please note also that 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.

So, what if I do exceed my limits?​

You are essentially gifting money to the municipality as charity (although you will get whatever gift they send you). WE DO NOT RECOMMEND EXCEEDING YOUR LIMITS

Do I have residence tax this year?​

Residence tax for year n is determined by (a) your income in year n (b) on your residency on Jan 1 in year n + 1. This is why in people's first year in Japan, they pay no residence tax because their income in year n - 1 is zero. If you are leaving before Dec 31st, your residence tax for 2023 will be zero, because you are not a resident on Jan 1st 2023, and you should not use Furusato-Nozei.

What is One-Stop?​

If you gift 5 or fewer municipalities, and you are not required to file a tax return (because the basic YETA covers you / you do not have special circumstances), you can elect to do the "onestop" system, which allows you to avoid having to file a tax return.

You will need to:

• Ask for one-stop at the time you make your donation(s)
• Mail the one-stop application to the municipality before January 10th of the following year for each donation

If you do not use onestop, you must save the receipts that are sent to you for tax filing time, or file using e-tax where they are not required.

What are some sites I can use?​

There are myriad sites which offer easy furusato-nozei options; the most popular are:

• https://www.furusato-tax.jp/
• https://event.rakuten.co.jp/furusato/
• FuruToku.Red and FuruSato.COM also regularly compares a large number of donation sites and cost-performance

How do I file my tax return next year with Furusato Nozei?​

• Step by Step guide to tax filing if you cannot do one-stop
• How to verify your residence tax discount the next summer

What's new in 2023?​

There is a new searchable website version of the Wiki! Please do feel free to use it as an alternative to Reddit's own lackluster UI.

Some municipalities were spending more than 50% of the donation amount on return gift items, and have been warned by the Ministry of Internal Affairs and Communications that the total cost of providing these gifts, including shipping, marketing, portal-site fees, etc cannot exceed 50% of the donated amount. This will lead to lucrative cash-like point-back campaigns yoinked and some gifts being pulled from the market or having their donation costs rise.

Previous year's threads​

• 2022 -
  https://www.reddit.com/r/JapanFinance/comments/zhnf11
• 2021 -
  https://www.reddit.com/r/JapanFinance/comments/r8puxs

 

[guojiaini]

@mototothemax Stupid question, but the value you input into all their 簡単シミュレーション, is it the gross income for the year pre deductions or after deductions(from the health insurance and pension premiums etc)

 

[mototothemax]

@guojiaini It is your gross income before deductions unless otherwise specified.

 

[guojiaini]

@mototothemax Thank you!

 

[padraig2003]

@mototothemax Heads-up for anyone: It's worth checking the various sites if they have point campaigns.

I did some (purchases) donations on one site, then found an item that wasn't available there somewhere else (furunavi.jp in this case). And then learned that they basically give back points between 8-30% (for the same donation amount AFAIK, so not offset by higher donations).

For some items I got they weren't available on other sites anyway, but for others I actually lost out on quite a bit of additional return.

 

[padraig2003]

@mototothemax I mean, FN itself seems to be a bit of a weird thing to me. E.g. donate a few 10man and get a new camera valued at 30% of donation value. Or a yearly subscription of household items or food, you don't need to buy later.

Everybody maximizes their contributions.

Ultimately it has become a way to get something back for paying taxes. And optimizing for that seems no less ethical than utilizing other mechanisms to reduce your cost burden.

So far so good.

What's bad about those specific sites? Do they take away more from the donations arriving at the cities? If so, do we know the other ones just keep the money without benefiting the doner?

Basically when I see the same return gift on two sites for the same donation amount I assume that if one of them can provide cashback points it's because either the return gift value isn't as high as it could be or one party is taking too much in fees. But both sites are likely pocketing that difference money as fees, and only one of them uses part of it to incentivize customers with cashbacks. Not sure which one is less ethical.

Without insight into how things are set up I cannot really assess ethicality.

 

[stanilovesgod]

@mototothemax Just want to say thanks. This thread got me motivated to finally do Furusato Nozei for the first time. I just had about 20,000 to spend, so I went with peaches and my wife got some jewelry she liked. Really looking forward to it.

Also, looking at the fruit options, I saw that a few of them were for a different fruit each month. That sounds really nice. Do you guys know any similar things that aren’t Furusato Nozei related?

 

[mototothemax]

@stanilovesgod You're welcome! Glad you got in