Have you ever heard of “Furusato Nozei” (ふるさと納税 literally translated to “Hometown Donation Program“)?
You may recognize this as a measure to reduce your tax amount. But what is it actually? In this page, you’ll find what “Furusato Nozei” really is.
Furusato Nozei is a donation to municipalities you would like to give financial support and the amount of donation that exceeds 2,000 JPY will be refunded. Most of the municipalities send you various items you pick such as rice, beef and something like that in return.
So it can be said that you get items with your 2,000 JPY.
Furusato Nozei was introduced to reduce the gap in tax revenue between urban and rural areas.
See this on YouTube↓
How and when is it refunded?
Actually, most of the amount you donate is not refunded. The amount of Inhabitant tax you are supposed to pay next year will be reduced.
In general, the amount of Inhabitant tax is determined based on your income in the previous year. If you’re employed, Inhabitant tax deducted every month from June 2019 to May 2020 will be determined based on your income in 2018.
If you donate to municipalities as “Furusato Nozei”, the most of the amount that exceeds 2,000 JPY will be reduced from the Inhabitant tax amount.
How do you do “Furusato Nozei”?
There is a website that introduces municipalities that do Furusato Nozei. You can search not only from municipality but also from items you would like such as foods and beverages. The name of the website is “Furumaru”. ⇒Browse items here
Be careful, there is a limit how much you can enjoy tax reduction. The amount is determined based on your income, your family structure and so on. ⇒Simulator Tool
When you find where to donate, then make a payment. Credit cards are acceptable as well. You’ll get items in return in a month usually.
You will receive the receipt of your donation as well as items. It is necessary when you do final tax return.
If you are employed by a company and don’t have 200,000 JPY annual income or more from your side job, the One Stop Exception system 「ワンストップ特例制度」 can be applied.
Basically, you need to do the tax return to enjoy the tax reduction. But you are exempt from this procedure if the One Stop Exception system is applied.
As mentioned above, Furusato Nozei is really beneficial for various reasons. So don’t miss your chance!
Having any concerns like these with your accountant?
Your tax accountant…
- changes every year
- suggests no tax-saving measures
- doesn’t give you financial statements in a timely manner
- doesn’t explain the contents of the statements
- is reluctant to use the cloud software
- rarely shows up to your office
- is always late to answer your questions
- is elderly and you’re worried about the near future
Lack of communication with tax accountants can cause incorrect accounting processing due to the mess of the contents of the bookkeeping.
As a result, it increases the risk of additional taxation of up to 40% through a tax audit which is conducted once every 3 to 5 years.
To prevent from paying additional taxes, it is important to share accounting processing and the business environment with tax accountants on a daily basis and to take measures to address additional taxation risks at an early stage.
We, Masa Tax Consulting, not only consult on accounting contents but also provide tax audit preparing measures and proposals for tax-saving measures that are optimal for customers as the most casual/friendly tax accountant in Japan.
We now offer a free initial consultation and a first-month-free policy.
We do not force you to make any contract, so please feel free to contact us.
～The representative tax accountant will always respond responsibly.～