A large number of sports, cultural and arts events have made the difficult decision to abandon all their preparations and work already done in order to follow the government's request to help fight the spread of the coronavirus among fans. Pending passage of a bill by the legislature, under the new system those who have chosen not to pursue a refund from canceled cultural and sports events will be allowed to categorize the amount lost as a donation for tax deduction purposes.
The new tax system is intended to support everyone who wants to keep supporting their favorite teams and athletes and artists who even now are working hard to give us all strength and solace. The specific procedure is as follows:
1. Organizers ⇔ Agency for Cultural Affairs / Sports Agency
The Agency for Cultural Affairs/Sports Agency will designate events as eligible based on an application from the event organizer. This will cover a wide range of events that have already been canceled, postponed or reduced in size. A list of eligible events will be posted on the Agency for Cultural Affairs/Sports Agency website.
2. Organizers ⇔ Participants
For those who choose not receive a refund, they must notify event organizers that they do not want a refund. They will receive documents from the organizers certifying that the event was eligible for the program and that the participant has waived a refund.
3. Participants ⇔ Tax Office
The two documents above must be included with the participant's end of year tax return. Online tax returns are included. The amount in question will be categorized as a donation for tax deduction purposes.
As an example of the tax savings this can result in, if you view giving up a 10,000 yen [~$93 USD] concert ticket as a donation to support the artist, you can receive a tax savings of up to 4,000 yen [~$37 USD]. The exact amount of the tax reduction will depend upon the applicant's income and the specific local tax authority. In terms of a tax deduction, the amount is calculated as (total ticket price -2000 yen) x40% (+resident's tax). Please note that the 2000 yen subtraction will only be applied once to the applicant's total amount of annual donations, including charitable donations other than the ones eligible under this system.
1. This system applies to domestic Japanese events that were scheduled to take place between Feb. 1, 2020 and Jan. 31, 2021 but were canceled, and which have been listed on the Agency for Cultural Affairs/Sports Agency website as per step one above. It does not apply to the majority of events that did not offer refunds to begin with or which are otherwise ineligible.
2. Participants may claim up to 200,000 yen [~$1850 USD] in ticket or entry value total for the year.
3. Please enquire with your local tax authority with regard to deduction benefits for local resident's taxes.
Complete details concerning event application procedures will be posted on the Agency for Cultural Events/Sports Agency website as soon as they are finalized.
translated by Brett Larner