Furusato Nōzei basics: “donation” and “thank-you gift”

Furusato nōzei is a “donation”

Furusato nōzei is a system for making a donation to a local government you want to support. The thank-you gift comes with the donation, but it is not the main point of the system.

When you donate, in principle the portion above a ¥2,000 self-pay comes back to you as an income-tax refund and a resident-tax deduction.

Why people say “effectively ¥2,000”

It means that as long as you stay within a certain limit, your own cost is just ¥2,000.

• Any donation above your limit is paid out of your own pocket (it is not deducted).
• The limit differs per person, based on income, household, and other deductions.
• “Effectively ¥2,000” only holds if you keep within your limit.

You can estimate your limit on Japan’s portals, but confirm the exact figure with your withholding slip (源泉徴収票), a tax return, or your local government.

How to claim the deduction

Donating alone does not give you the deduction. You need one of the following:

1. One-Stop Exception (ワンストップ特例) — for salaried workers who do not otherwise file a tax return, donating to 5 or fewer local governments per year, among other conditions.
2. A tax return (確定申告).

See One-Stop Exception vs tax return for details.

Summary

• Furusato nōzei is a donation; the gift is incidental.
• The ¥2,000 self-pay assumes you stay within your limit; anything above is your own cost.
• The deduction requires paperwork (One-Stop Exception or a tax return).