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Last updated: July 27, 2026
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"Can't my Residence Tax be any cheaper next year?" "My Japanese colleagues are talking about getting 'free rice'... what is that?"
If you work in Japan and pay taxes, you are losing tens of thousands of yen every year by NOT doing 'Furusato Nozei'.
Furusato Nozei (Hometown Tax Donation) is a government-approved system where you can receive high-quality meat, rice, travel vouchers, and more for an effective cost of just ¥2,000 . Yes, foreign residents can use it too, as long as you meet the requirements.
However, if you miss the December 31st deadline, your chance for this year's tax deduction (saving money) disappears.
In this article, I will explain step-by-step how foreign residents can successfully do Furusato Nozei without mistakes and double-dip on Rakuten Points and Return Gifts .
Although "Furusato Nozei" has the word "Donation" in it, it is effectively "Pre-paying your Residence Tax" .
Instead of paying all your Residence Tax to the city where you currently live, you "donate" (pre-pay) a portion of it to a countryside municipality of your choice. This gives you the following benefits:
For example, if you donate ¥50,000 :
In other words, you get ¥15,000 worth of food for just ¥2,000 . There is literally no reason not to do it.
The conclusion is: Anyone who has a Residence Card, earns income in Japan, and pays Residence Tax can do it.
Check out Essential Guide for Pension Refunds When Leaving Japan to confirm your money plan upon departure.
The most important thing in Furusato Nozei is knowing "Your Limit" . Depending on your annual income and family structure, there is a cap on how much tax can be deducted. If you donate more than this, the excess is just a pure donation (a loss for you).
| Your Annual Income | Donation Limit (Estimate) |
|---|---|
| ¥3.0 Million | Approx. ¥28,000 |
| ¥4.0 Million | Approx. ¥42,000 |
| ¥5.0 Million | Approx. ¥61,000 |
| ¥6.0 Million | Approx. ¥77,000 |
For the exact amount, please check using a simulator. It goes smoothly if you have your Withholding Tax Slip (Gensen Choshu Hyo) handy.
There are several sites where you can donate, but "Rakuten Furusato Nozei" is the only real choice . The reason is the insanely high "Point Back" rate .
On Rakuten, you get "Rakuten Points" even on the donation amount. For example, if you donate ¥50,000 during the "Shopping Marathon" or "Super Sale" period and get a 10% point return:
Not only is it practically free, but you actually make a profit in points . This is the power of the "Rakuten Economic Zone".
If you don't have a Rakuten Card yet, make sure to create one in time for the campaign. It has no annual fee.
Practical Guide to Applying for a Rakuten Card: English Input Tips & How to Avoid Rejection
If you want to earn even more points, refer to the article below. Is the Rakuten Ecosystem Dead? 5 New Rules to Earn Points Smartly in Japan
Here is the point where many foreigners fail.
Your "Rakuten Account Name" and your "Residence Card Name" must match EXACTLY, character for character.
SMITH JOHNSMITH JOHNSMITH JOHNJohn Smith (Order is reversed)スミス ジョン (Katakana)If the names do not match, there is a risk that the tax deduction process will be invalid. Please make sure to verify that the "Orderer Information" (注文者情報) on the order screen matches your Residence Card exactly. The same applies if you have a middle name.
Once you finish donating (shopping), there is one last procedure. If you forget this, your taxes will NOT be reduced.
For company employees, I recommend the "One-Stop Exception System" (One-Stop Tokurei Seido) . It allows you to complete the process just by mailing a simple document, without having to file a full Tax Return (Kakutei Shinkoku).
The application form must arrive at the municipality by January 10th of the following year . If you donate at the end of December, waiting for the paperwork to be mailed to you might be too late. In that case, choose a municipality that supports "Online Application" (like the IAM app) or download and print the application form yourself and send it via express mail.
For those who don't know what to choose, here are recommended categories focused on practical value. Especially if you live alone in an urban area like Tokyo, the savings on food costs are massive.
As explained in Cost of Living in Tokyo: Monthly Breakdown, reducing fixed costs is key.
This has the best cost-performance. For a donation of ¥10,000 to ¥15,000, you get 10kg to 15kg of rice delivered. It saves you the trouble of carrying heavy rice home from the supermarket.
Toilet paper and tissue paper. These don't rot and you will definitely use them. "96 rolls of toilet paper for a ¥10,000 donation" is a popular choice.
Enjoying high-grade Wagyu beef or seasonal fruits (like Shine Muscat grapes) that you wouldn't normally buy at the supermarket is the real thrill of Furusato Nozei.
A. You can, but it's risky. The "Payment" must be completed by 23
on December 31st. Credit card payments are reflected instantly, but to avoid risks like connection errors, please try to finish by around December 25th at the latest.A. You need to process a change of address. If you move after making a donation, you must submit a Change of Address Notification (Jusho Henko Todoke) to the municipality you donated to. If you forget this, the Residence Tax notification won't reach your new address, and the deduction might fail.
Furusato Nozei is one of the few "guaranteed profitable systems" available to us residents in Japan.
With just these 4 steps, your taxes next year will be cheaper, and you can enjoy delicious Japanese food. Start by checking how much you can donate with the simulator!
Until Dec 31st! Point UP Campaign in progress
Before Rakuten Furusato Nozei
This internal guide groups payment options and the one-stop or tax-filing entry points you may want to review first.
Related money task
This internal guide does not decide individual eligibility; it helps organize document prep and software options.
Open the tax return software guideYou might need this information again. Bookmark this page to access it anytime.
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A: Furusato Nozei (ふるさと納税) is Japan's hometown tax donation system where residents donate to municipalities and receive local product gifts. In exchange, the donation amount (minus ¥2,000) is deducted from your residence tax the following year. Foreigners with residence tax liability can fully participate.
A: Rakuten Furusato Nozei offers the best point return of major platforms during Rakuten SPU campaigns — often 10–30x points on donations. The platform's UX is in Japanese, but straightforward. Total returns (points + local gifts) can exceed 30% of the donation value during major Rakuten campaigns.
A: ワンストップ特例 lets you skip filing a tax return (確定申告) for furusato nozei deductions if: you donate to 5 or fewer municipalities AND you don't otherwise need to file a tax return. You submit a form to each municipality instead. Note: this requires a My Number Card.
A: Your optimal furusato nozei cap depends on your income and family situation. You pay only ¥2,000 net out of pocket regardless of donation amount (as long as you stay under your cap). Use a 控除額シミュレーター (deduction simulator) on Rakuten or Furusato Choice to calculate your exact cap.
A: Donations count for the calendar year (January–December). Most people donate in November–December to maximize the current year's tax reduction. The ワンストップ特例 forms must reach municipalities by January 10 of the following year. Year-end Rakuten campaigns (November) often offer bonus points, making them the best timing.
CEO / Native Japanese Expert
Updated on: July 27, 2026
※ The information in this article is accurate as of the time of writing. Laws and regulations may change, so please always check official sources for the latest information. We assume no liability for any damages resulting from the content of this article.