Corporate furusato nozei lets a company in Japan donate to an approved regional project. In return, the company can cut its corporate taxes by up to about 90% of the donation. A ¥10 million donation can cut corporate taxes by up to about ¥9 million. Unlike personal furusato nozei, there are no return gifts. Your company gets the tax effect, public recognition, and a relationship with a region.
Key facts (as of October 2026)
- Tax effect: Up to about 90% of the donation, through deductions and tax credits. (Cabinet Office)
- Minimum: ¥100,000 per donation.
- Not allowed: Any economic benefit in return, and donations to the municipality where your head office is.
- Available until: The tax credits run through fiscal year 2027 (April 2027 to March 2028). (Cabinet Office)
What is corporate furusato nozei?
Corporate furusato nozei (kigyo-ban furusato nozei, 企業版ふるさと納税) is a tax incentive for companies that support regional revitalization projects. Its official name is the Regional Revitalization Support Tax System (chiho sosei oen zeisei, 地方創生応援税制). It started in fiscal year 2016. (Cabinet Office)
You donate to a project that a municipality or prefecture has included in a regional revitalization plan approved by the Prime Minister. (Cabinet Office)
The scheme is already widely used. In fiscal year 2024, 8,464 companies donated a total of ¥63.14 billion, up 34% from the year before. As of April 1, 2026, 1,613 local governments had approved plans. (Cabinet Office)
How is it different from personal furusato nozei?
The two schemes share a name but work very differently.
| Personal furusato nozei | Corporate furusato nozei | |
|---|---|---|
| Who donates | Individuals | Companies |
| What you get back | A return gift, plus a tax deduction | No gift. A tax reduction only |
| Tax effect | Everything above ¥2,000, within your limit | Up to about 90% of the donation |
| Where you donate | Any designated municipality | Approved projects in a regional plan |
| Excluded | Municipalities removed from the system | Your head office’s municipality, Tokyo, and some wealthy cities |
| Minimum | None | ¥100,000 |
For the personal scheme, see Furusato Nozei Guide.
How much tax does your company save?
Up to about 90% of the donation. About 30% comes from treating the donation as a deductible expense, and up to 60% comes from tax credits. Your company’s real cost can be as low as about 10%. (Cabinet Office)
The tax credits work like this. (Cabinet Office)
| Tax | Credit | Cap |
|---|---|---|
| Corporate inhabitant tax | 40% of the donation | 20% of the corporate tax portion of your inhabitant tax |
| Corporate tax | The shortfall if inhabitant tax doesn’t reach 40%, up to 10% of the donation | 5% of your corporate tax |
| Corporate enterprise tax | 20% of the donation | 20% of your enterprise tax |
| Deductible expense (all donations) | About 30% |
Up to about 90% comes back
The bar is one corporate donation. No return gift: the benefit is the tax reduction.
Credits have caps based on your company’s taxes. Source: Cabinet Office. As of October 2026.
Example: a ¥10 million donation
The Cabinet Office’s example: a ¥10 million donation can reduce corporate taxes by up to about ¥9 million. (Cabinet Office)
The caps matter. If your company’s taxes are small compared with the donation, the credits hit their caps and the tax effect is lower. Ask your tax accountant to model it with your actual tax figures before you commit.
Which rules must your company follow?
Three rules matter most. (Cabinet Office)
- No economic benefit in return. The municipality can’t give your company anything of value for the donation.
- No donations to your head office’s municipality.
- ¥100,000 or more per donation.
Some local governments are excluded entirely. These are Tokyo Metropolis, and wealthy cities in the built-up areas of the three major metropolitan regions. (Cabinet Office)
What is allowed?
Municipalities may introduce donor companies on their websites and in public newsletters. Contracts between your company and the municipality are also possible, as long as they go through a fair process. (Cabinet Office)
The Cabinet Office publishes a detailed guide on what counts as an economic benefit. Read it before you discuss anything beyond the donation with a municipality. (Cabinet Office portal)
Can a foreign-owned company use it?
Yes. The Cabinet Office Q&A says donations from any corporation that files a blue tax return (aoiro shinkoku, 青色申告) qualify. This includes foreign corporations. (Cabinet Office Q&A)
A KK or GK set up by an overseas parent is a Japanese corporation, so the same rule applies. A Japanese branch is part of a foreign corporation. Ask your tax accountant how the rule applies to your branch.
Things to check first:
- Your blue tax return status. The credits apply only to corporations that file a blue tax return. (Cabinet Office Q&A)
- Where your head office is registered. You can’t donate to that municipality. Many foreign-owned companies are registered in Tokyo, and Tokyo itself is excluded, but you can still donate to regions outside Tokyo.
- Your group’s approval process. A donation with no return may need parent-company approval under your group’s policies on charitable giving.
- Your tax position. The credits only help if your company pays enough Japanese corporate tax.
What does your company gain beyond the tax effect?
The Cabinet Office lists two main benefits for companies. (Cabinet Office)
- A better public image through social contribution.
- New business ideas that use regional resources.
For foreign-owned companies, there is a third practical benefit. It builds a visible link to a Japanese region, which can help with local hiring, partnerships, and your ESG reporting.
Can you send staff instead of only money?
Yes. Under the talent dispatch type (jinzai haken-gata, 人材派遣型), your company sends an employee to a local government. It also donates an amount that covers their salary. (Cabinet Office) The Cabinet Office also offers a side-job version. (Cabinet Office portal)
How do you donate, step by step?
You arrange the donation directly with the local government. The Cabinet Office Q&A describes the main steps. (Cabinet Office Q&A)
- Choose a theme. For example, tourism, education, the environment, or local industry.
- Find a project. The Cabinet Office portal lists projects by field. Projects not on the list may also accept donations, so ask the local government. (Cabinet Office portal)
- Contact the local government. Confirm the project, timing, and how they will acknowledge your donation.
- Send a donation offer and pay. The Cabinet Office provides a sample offer letter (寄附の申し出). Local governments can accept donations once their plan is approved. (Cabinet Office Q&A)
- Receive the official receipt. The receipt form is set by a Cabinet Office ordinance, and you need it for your tax filing. (Cabinet Office Q&A)
- Claim the credits in your tax returns. Attach a copy of the receipt to your local tax returns. Keep it with your corporate tax return records. (Cabinet Office Q&A)
Timing matters. The Cabinet Office found that most donations are received after the local assembly approves the project budget. (Cabinet Office) Start talks early in your fiscal year. The credits apply to the business year in which you actually pay. (Cabinet Office Q&A)
What changed recently?
In the 2025 tax reform, the tax credits were extended for three years, to fiscal year 2027. The extension came with stricter checks on how local governments run donated projects, after problems with contract fairness at some projects. (Cabinet Office)
What this means for your company: Expect more paperwork from local governments, such as checklists and reports. Under current law, the credits end with fiscal year 2027. Plan any donation you want to make under them by March 2028. (Cabinet Office)
What mistakes should companies avoid?
| Mistake | Why it’s a problem |
|---|---|
| Expecting something in return | Economic benefits are prohibited under the scheme’s rules |
| Choosing your head office’s municipality | Donations there are not covered |
| Ignoring the caps | If your taxes are small, the real tax effect is less than 90% |
| Starting late in the fiscal year | Local budgets and approvals take time |
| Not involving your tax accountant | The credits are claimed through your corporate tax return |
What should you do next?
- Ask your tax accountant to estimate the tax effect with your figures.
- Pick one or two themes that fit your business or ESG goals.
- Shortlist projects on the Cabinet Office portal and contact the local governments.
FAQ
Do companies get return gifts like individuals do?
No. Any economic benefit in return for the donation is prohibited.
What is the minimum donation?
¥100,000 per donation.
Can we donate to the city where our head office is?
No. Donations to the local government where your head office is located are not covered.
Is the tax effect really 90%?
Up to about 90%. The tax credits have caps based on your company’s taxes, so the real effect can be lower.
Can the municipality publicize our donation?
Yes. Municipalities can introduce donor companies on their websites and in newsletters.
Can a sole proprietor use corporate furusato nozei?
No. The tax credits are for corporations that file a blue tax return. (Cabinet Office Q&A) A sole proprietor is not a corporation. Individuals, including sole proprietors, can use personal furusato nozei. See Furusato Nozei Guide.
This article is general information, not tax advice. The tax effect depends on your company’s tax position. Ask a licensed tax accountant before donating. Information is as of October 2026. Sources: Cabinet Office: Corporate furusato nozei portal, Cabinet Office: Overview (April 1, 2026), Cabinet Office: 2025 tax reform, Cabinet Office: Q&A, project implementation (15th ed., April 1, 2025).