Tokyo Weekender - March 2016

TAX BREAKS
WITH BENEFITS
by Louise George Kittaka
Getting a tax deduction is nice, but getting an entire
tuna to go with that deduction is even better
If someone told you that you could get
two steaks to go with a tax break, you’d
probably be a bit suspicious. But that’s
one of the possible benefits to be garnered
from Japan’s Furusato Nozei program.
Literally translated, furusato
nozei means “hometown
tax,” so you wouldn’t be
blamed for assuming that
the program didn’t apply to
foreign nationals. But in fact,
the program behind Furasato
Nozei has little to do with a
person’s hometown and isn’t a
type of tax at all. What’s more,
foreign residents of Japan who
work and pay taxes here are
just as entitled to participate as
the Japanese.
The program was launched
in 2008 as a way for a person to make a charitable
donation to a municipality or prefecture of their
choice—whether or not it was their hometown.
Donors can even specify the purpose for
which they want the money to be
used: educational projects and helping the elderly
are two examples. Beyond the feel-good aspect,
though, there are two benefits that make donating
all the sweeter.
A WIN-WIN SITUATION
The first of these is that donations
are tax deductible: depending on
how much you donate and your
household’s income, you can claim
back almost the entire donation. In
general, the more tax you pay, the
more you can claim back under
donations to the Furusato Nozei
program.
The other benefit wasn’t
originally intended to be the main
incentive for donations, but over the
years it may have eclipsed the tax
deduction aspect in the eye of the
public: The municipalities and prefectures often
send back “thank you” gifts to donors, typically in
the form of local products and specialties. A tax
break and return goodies into the bargain—what’s
not to like?
MARCH 2016 www.tokyoweekender.com