FURUSATO NOUZEI, Gifts in return for tax?

Furusato Nouzei literally means "tax payment to your home town", but it does not make sense. Taxes naturally must be paid to the public bodies designated by the relevant laws. You can not choose to which city you pay the taxes. Instead, Furusato Nouzei should be called as "Furusato Donation". "Furusato Nouzei" is a wrong word which makes us confused about the essence of the rule.

Japanese income taxation system prepares several preferential treatments concerning certain types of donations, and this "Furusato Donation" rule is the most expanded one of the preferential treatments. This rule enables those who make donations to their favorite towns to reduce their tax burdens. It appears as if they pay a certain proportion of their income taxes to their favorite towns by choice. Given he/she makes a donation of 10 thousands yen to any favorite prefecture or municipality, his/her tax burden shall be reduced corresponding to the donation amount. For example, the national income tax amount shall be reduced by 3 thousands yen, and the local income tax amount shall be reduced by 5 thousands yen. As a result, his/her substantial outgoings is only 2 thousands yen (10-(3+5)=2), although he/she makes a donation of 10 thousands yen.

National tax office,
Local tax bureaus

(tax reduction)
8 thousands yen 
Tax payer  
(donation)
10 thousands yen
Municipalities

(gifts in return)
various souvenirs

The allotment of the reducible tax amount depends on the amount of your taxable income. (The amount mentioned above is merely provisional.) But, as long as the amount of the qualified donations is within the limitation calculted according to your taxable income, your substantial financial burden does not go beyond 2 thousands yen.

This taxation rule itself may not be so interesting, even though it has an important meaning from the view point of the governments. The donee cities receive additional revenues while the National government and the local governments which have jurisdition over the donators' residences lose their potential tax revenues. This is a controvertial problem. Many public bodies aim to collect donations from all around Japan and some of them have begun to offer various gifts in return for the donations. The concept of the return for taxes is also considerable controversial. However, this rule has become established in a short time and become very popular among the people.

Although the competiton between local bodies went too excessive and the central government were forced to implement a restriction over the types and quantities of the gifts, we can gain various gifts by making the donation by which we really lose no more than 2 thousands yen. I recommend you to take advantege of this rule and to find attractions of Japan.

I make the Furusato Donations to Gotsu city every years, and to Hamada city and Masuda city recently. Hamada city and Masuda city is in Shimane prefecture, near to Gotsu city. I enjoy different fruits, rice products and craft beer offered by these cities. The craft beer produced by IWAMI BAKUSHU KK looks so popular, and it really tastes good.

〔In Japanese〕

”ふるさと納税”制度は、その文字通りに理解すると意味が通じません。納税は、法律で決められた納付先に対して行うものであって、その納付先を納税者が選ぶことはできないからです。 ”ふるさと納税”制度は、厳密には”ふるさと寄付金”と呼ぶ方がよいでしょう。日本の個人所得課税においては、一定の宛先に対する寄付金について優遇税制を置いていますが、ふるさと納税は、その拡大版です。この制度により、税金の一部について、その納付先を自由に選ぶのと同様の結果を得ることができます。

貴方がどこかの地方公共団体(都道府県あるいは区市町村)に1万円の寄付をしたとしましょう。そのとき、その寄付額に応じた額だけ貴方の税負担が圧縮されます。たとえば、所得税(国税)が3千円減少し、住民税が5千円減少するのです。 この結果、貴方の実質的な支出額は1万円でなく、2千円となるわけです(1万円-(3+5)千円=2千円)。どちらの税金からいくら差し引かれるかは、寄付者の課税所得水準によって変わりますので、ここでの金額は仮定のものにすぎませんが、 幾らのふるさと納税を行っても、その合計額が課税所得水準によって算定される所定の限度額を超えない限り、貴方の実質の負担額が2千円を超えないことは変わりません。

この制度には、政府の立場から見ると、寄付先である都道府県や市町村が追加的な収入を得る一方で、国や住所地の都道府県、市町村がその得るはずであった課税収入を失うことになるという重要な意味合いがあります。これはなかなか複雑な問題を生じさせます。多くの地方公共団体が、この制度による寄付金集めを狙って、返戻品の提供を始めました。税金に対する返戻ということも、これまた議論を呼ぶものですが、ふるさと納税制度は短期間で定着し、非常に人気のある制度になっています。

返戻品競争が過熱化したことから、返戻品の種類や量について一定の制限が加わったとはいえ、実質2千円の負担で、各地の特産品が手にできるわけですから、積極的に利用して、日本の魅力を発見してみてはいかがでしょうか? サイト開設者は制度導入以来、毎年、江津市にふるさと納税を行っているほか、昨年から隣接の浜田市や益田市にも寄付を行いました。お米や地ビールの返礼品があり、株式会社石見麦酒が製造する地ビールは人気の返礼品となっているようです。

Limitation Amount

According to the Furusato Donation rule, the most effective way to minimize our outgoings and maximize the return benefits is to make donations up to the limitation amount prescribed in the related laws. I mean you can receive more return as you make more donations, but when your donation amount is beyond the limit, your substantial financial burden becomes larger than 2 thousands yen.

This limit amount depends on your taxable income of the year in which you make the donation. The calculation formula is a little complicated as below;

【Formula】Limit amount = (Local tax amount × 20%)÷(90%-National tax rate) 
  (Taxable income amount × 2%)÷(90%-National tax rate)  
  > Taxable income amount × 2.2% 

In this formula, the local tax amount and the national tax rate depend on your taxable income amount. Local tax amount shall be approximately 10% of the taxable income, and the national tax rate varies progressively from 5% through to 45%, according to the taxable income. Therefore, the limitation amount must be more than 2% of your taxable amount subject to the local income tax. To accurately figure out your taxable income amount before the relevant year end is not easy , but you can make a rough estimate. You can refer to the relevant page in this site regarding calculation procedures of the taxable income. In case where your taxable income amount is small and no income tax is levied on you, you can not claim this preferential treatment. In this case, you simply pay the donation amount for the cuisines and souvenirs.

〔In Japanese〕

ふるさと納税をするときに、最小の出費で最大のメリットを得るための最も効率的な方法は、法令で定められた限度額いっぱいまでの寄付をすることです。 寄付額を増やすほど多くの返礼品をもらえますが、この限度額を超えて寄付を行うと、実質の負担額が2千円を超えてしまいます。 この限度額は、その寄付をする年の課税所得の額に応じて決まります。計算式はわりと複雑で、以下のものとなっています。
【計算式】効率的なふるさと納税の限度額 = (住民税額 × 20%)÷(90%-所得税率) 
  (課税所得の額 × 2%)÷(90%-所得税率)  
  > 課税所得の額 × 2.2% 

このうち、住民税額と所得税率とが、課税所得の額によって左右されます。 住民税額はおおよそ課税所得の額の10%であり、所得税率は課税所得に応じて5%から45%まで累進的に決まります。 よって、限度額は、少なくともその年分の課税所得の額の2%相当額よりは大きくなるわけです。 その年中に課税所得の額を正確に把握することは難しいですが、おおよその金額を知ることはできるでしょう。 詳しくは「所得税」カテゴリーの関連ページをご参照ください。 もし、課税所得が少額であり所得税額が生じない場合には、この特例の適用は受けられません。この場合には、寄付額がそのまま返戻品を受け取るための貴方の負担額となります。