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If you pay income tax and resident tax in Japan, you can use furusato nozei, even as a foreign resident. You donate to a municipality, get a return gift, and almost all of the donation comes back as a tax deduction. Your real cost is ¥2,000 a year, as long as you stay within your deduction limit.
Key facts (as of October 2026)
- Cost: ¥2,000 per year. Donations above your deduction limit are not fully deducted.
- Who can use it: People who pay income tax and resident tax in Japan. Nationality is not a condition.
- How to claim: File a tax return. If you donate to 5 municipalities or fewer and don’t need to file, you can use the one-stop exception instead.
- Return gifts: A municipality can spend up to 30% of your donation on your gift, and it must be a local product.
How furusato nozei works
Your real cost is ¥2,000 a year, as long as you stay within your deduction limit.
Donate to any municipality
Choose any city or town in Japan, not only your hometown.
Get a gift and a receipt
The municipality can spend up to 30% of your donation on a local gift.
寄附金受領証明書 (donation receipt)
Claim the deduction
Pay less tax
Donation − ¥2,000
comes off your taxes. With the one-stop exception, it all comes off resident tax from June.
Source: Ministry of Internal Affairs and Communications (MIC), Takasaki City. As of October 2026.
What is furusato nozei, and why do people call it a tax hack?
Furusato nozei (hometown tax donation, ふるさと納税) lets you send part of your tax to a municipality you choose. In return, you get a thank-you gift, and your taxes go down by the donation minus ¥2,000.
The name means “hometown tax,” but you don’t need a hometown in Japan. The Ministry of Internal Affairs and Communications (MIC) says you can donate to any municipality you want to support.
Here is the official example from MIC. A salaried worker earning ¥7 million a year, with a spouse as the only dependent, donates ¥30,000. ¥28,000 of that is deducted from income tax and resident tax. (MIC)
So you pay ¥2,000, and the municipality can spend up to ¥9,000 on your gift. That gap is why people call it a tax hack. It is not a discount on your taxes, though. You are paying the same total tax, just to a different place, and getting a gift for it.
Can foreigners use furusato nozei?
Yes. Foreign residents pay resident tax under the same rules as Japanese citizens. (MIC) The furusato nozei rules set no nationality condition. If income tax and resident tax are taken from your salary in Japan, you can use it.
| Your situation | Can you use it? |
|---|---|
| You work in Japan and pay income tax and resident tax | Yes |
| You are self-employed in Japan and file a tax return | Yes, through your tax return |
| You have no taxable income in Japan | No. There is no tax to deduct from. |
| You arrived in Japan this year | Usually yes. Next year’s resident tax is based on this year’s income, and you pay it if you live in Japan on January 1. (MIC) |
| You plan to leave Japan before next January 1 | Check first. You may not pay resident tax next year, so the deduction may have little to reduce. (MIC) |
The deduction comes mostly from next year’s resident tax. That is why your timing matters if you plan to leave Japan.
How much can you donate without paying more than ¥2,000?
Your limit depends on your income, your family, and your other deductions. As a rough guide, higher income means a higher limit. Most portals and municipalities offer a simulator to estimate it.
The limit exists because one part of the deduction has a cap. MIC splits the deduction into three parts:
| Part | How it is calculated | Example: ¥30,000 donation |
|---|---|---|
| Income tax | (Donation − ¥2,000) × your income tax rate | (¥30,000 − ¥2,000) × 20% = ¥5,600 |
| Resident tax, basic part | (Donation − ¥2,000) × 10% | (¥30,000 − ¥2,000) × 10% = ¥2,800 |
| Resident tax, special part | (Donation − ¥2,000) × (100% − 10% − your income tax rate) | (¥30,000 − ¥2,000) × 70% = ¥19,600 |
| Total | ¥28,000 |
Example from MIC: a married salaried worker with no children, earning ¥7.5 million. Their top income tax rate is 20%. (MIC)
The special part can’t be more than 20% of your resident tax (the income-based part). If your donation pushes it past that cap, you pay more than ¥2,000. That point is your deduction limit. (MIC)
If you have RSUs, a large bonus, or side income, a simple simulator may give the wrong number. See Furusato Nozei Limit for limits by income up to ¥30 million.
How do you donate, step by step?
You can donate online with a credit card. Most portals are in Japanese only, so the steps below show what to look for.
- Check your limit. Use a simulator with last year’s withholding slip (gensen choshuhyo, 源泉徴収票).
- Choose a portal and a gift. Large portals have the most gifts. Your browser’s translate feature works on most of them.
- Enter your details exactly as registered. Use the name and address on your resident registration. The one-stop form asks for the address where you will pay resident tax, so the details need to match. (Takasaki City)
- Pay. Credit card is the most common method.
- Apply for the one-stop exception, or keep your receipt. See the next section.
To compare portals by how easy they are in English, see Best Furusato Nozei Sites for English Speakers.
Do you need to file a tax return?
Most salaried foreigners don’t. You can use the one-stop exception instead if two things are true. You donate to 5 municipalities or fewer, and you don’t need to file a tax return for other reasons. (MIC)
| One-stop exception | Tax return (kakutei shinkoku) | |
|---|---|---|
| Who can use it | Salaried workers who don’t need to file, donating to 5 municipalities or fewer | Anyone |
| What you do | Send an application form to each municipality | File a tax return by March 15 of the next year, with your donation receipts |
| Where the deduction appears | All of it comes from next year’s resident tax | Income tax refund this year, plus lower resident tax next year |
| Deadline | January 10 of the next year | March 15 of the next year |
Two rules catch people every year:
- If you donate to 6 or more municipalities, you must file a tax return. The one-stop exception no longer applies. Several donations to the same municipality count as one.
- If you file a tax return for any reason, include all your donations in it. Your one-stop applications won’t count. (MIC)
Some foreign residents must file a tax return anyway, so they can’t use the one-stop exception. The National Tax Agency (NTA) says you must file if any of these apply. (NTA)
- Your annual salary is more than ¥20 million.
- You have one employer, and your income other than salary is more than ¥200,000.
- Your salary comes from an employer that doesn’t withhold Japanese tax, such as a company overseas.
How to apply for the one-stop exception
Each municipality sends you the one-stop exception application form (shinkoku tokurei shinseisho, 申告特例申請書). The form can differ by municipality. Some municipalities also accept online applications with your My Number Card, a system that started with donations made in 2022. (MIC)
If you move after you apply, send a change form to each municipality by January 10 of the next year. (MIC)
A full walkthrough of the form is in One-Stop Exception Form in English.
What changed in 2025 and 2026?
Furusato nozei still works the same way for you. The changes mostly affect portals and municipalities.
| When | What changed | What it means for you |
|---|---|---|
| October 1, 2025 | Municipalities can no longer collect donations through sites that give points for donating. (MIC) | Portals no longer give points for donations. Choose a portal by its gifts and ease of use. |
| October 1, 2026 | Stricter rules on local products, and municipalities must publish large payments to vendors. (MIC) | Some gifts may disappear or change. |
| Donations from 2027 | The special part of the resident tax deduction gets a cap of ¥1.93 million. (MIC) | The cap is reached at a salary of about ¥100 million, so most people are not affected. |
Details are in Furusato Nozei Changes in 2025–2027.
When should you donate?
Donate by December 31 for it to count for this year. The deduction covers donations you pay during the year. (NTA) With a credit card, the payment date is the donation date. With a bank transfer, it’s the date the money arrives. (Furunavi) Many people wait until December, but popular gifts can sell out.
Your limit is based on this year’s income. If your bonus or RSU vesting is still uncertain, wait until you know your income, then donate.
Your timeline looks like this:
| When | What to do |
|---|---|
| January to December | Donate and get your gifts |
| By January 10 (next year) | Send one-stop exception forms, if you use them |
| By March 15 (next year) | File your tax return, if you don’t use the one-stop exception |
| From June (next year) | Your resident tax goes down. Check your resident tax notice (juminzei kettei tsuchisho, 住民税決定通知書). |
Your furusato nozei year
Donations count for the year you pay. The tax benefit arrives the next year.
January to December 31
Donate and get your gifts. Card payments count on the payment date.
By January 10
By March 15
From June
Lower resident tax
Check your resident tax notice (住民税決定通知書).
Source: National Tax Agency, Ministry of Internal Affairs and Communications (MIC). As of October 2026.
Is furusato nozei worth it for you?
It’s worth it for most people who pay resident tax and can wait a year for part of the benefit. The gift is the real gain, so the higher your limit, the more you get.
It may not suit you if:
- your income is low, so the gift barely covers the ¥2,000 and your time;
- you are leaving Japan before next January 1 and may not pay next year’s resident tax (MIC);
- you can’t pay up front, since the tax benefit arrives the next year.
What other foreign residents say
On the Retire Japan forum, one long-time resident wrote in 2020 that the system feels like a hassle at first. They added that a couple of hours of effort pays off well, especially for higher earners. (Retire Japan forum, 2020) Posts from before October 2025 often mention portal points, which no longer apply.
What should you do next?
- Estimate your limit with a simulator.
- Pick gifts that fit your limit.
- Decide now whether you will use the one-stop exception or file a tax return.
FAQ
Can I use furusato nozei on a spouse visa or as a permanent resident?
Yes, if you pay income tax and resident tax in Japan. Foreign residents pay resident tax under the same rules, whatever their visa. (MIC)
What happens if I donate more than my limit?
The amount above your limit is not fully deducted, so you pay more than ¥2,000. You still get the return gift.
Can I use the one-stop exception if I donate to 6 municipalities?
No. With 6 or more municipalities, you need to file a tax return to get the deduction.
Do I get points for donating?
Not anymore. Since October 1, 2025, municipalities can’t use portals that give points for donations.
Can my spouse donate under my name?
No. Each person donates from their own account and pays with a card in their own name. On Rakuten, a donation made with a spouse’s member ID doesn’t count for you. (Rakuten)
When will I see the tax reduction?
With the one-stop exception, your resident tax goes down from June of the next year. With a tax return, you get an income tax refund too, and your resident tax goes down from June.
This article is general information, not tax advice. Rules are as of October 2026. For your own situation, ask a licensed tax accountant (zeirishi). Sources: MIC: Overview, MIC: Tax deductions, MIC: Procedure.