2023 Edition: Research on Smartphone Tax Payment and Scalable Methods for Paying Income Tax

Background

December 1, 2022.
While a certain cloud service was releasing a mountain of updates, the National Tax Agency also launched smartphone app payments.

Previously, national tax payment methods included not only bank transfers but also convenience store payments and credit card payments.
Various methods have been used to reduce tax burdens, such as accumulating nanaco points through convenience store payments or accumulating credit card points, but each method had its drawbacks.

For example, the nanaco card used to accumulate nanaco points has a limit of about 50,000 yen, so for a tax of 300,000 yen, you would need to use 6 cards.
Although I haven't tried it, if you were to pay 3 million yen, you would need 60 cards and receive 10 receipts.
In this case, you couldn't complain if the cashier refused, and it would be very troublesome to go from store to store.

Also, the main credit card payment method charged a fee of nearly 0.8%, making it very inconvenient to use.
Moreover, many card companies don't award points for tax payments, making it difficult to find a beneficial method.

Under these circumstances, the long-awaited smartphone app payment was launched.
This method appears to overcome the disadvantages of conventional methods while offering high scalability.
Taxes often involve large amounts, so the scalability of the method is important.
There are often cases where the return rate is high but only a few tens of thousands of yen can be paid, so this time I'll look at the limits while considering this.

Background Supplement

There are various types of taxes, but this article only deals with national taxes such as income tax and property tax.

Resident tax is also relevant to many people, but it's not affected by this update and there are large differences between municipalities, making it difficult to convey general techniques.
However, if your municipality supports credit card payments through Mobile Regi or Net de Mobile Regi, the content of this page may be helpful.
However, if a single payment exceeds 300,000 yen, the payment slip won't have a barcode, and Mobile Regi can't be used.
Net de Mobile Regi can handle up to 1 million yen, among other variations, so check with your municipality.

Basic Knowledge - Specifications of Smartphone App Payments

Smartphone app payment, as the name suggests, is a method that allows payment using several types of smartphone apps.
There are several supported services, including PayPay, Merpay, and Amazon Pay.

This payment method doesn't incur the payment fees associated with credit card payments.
However, as there's no benefit for the Pay service side, there may be some restrictions on their end.

Generally, various Pay services use charged balance for payments.
A major advantage is that credit card points can be earned at the time of charging, even for cards that don't award points for national tax payments.
Of course, be careful as some cards exclude balance charging from point eligibility.

An important point about smartphone payments is that there's no set limit on the tax amount.
At first glance, it might seem limited to 300,000 yen like Mobile Regi, but the official website only mentions "one-time payment".
Also, FAQ Q2-8 mentions "when paying part of the declared tax amount by smartphone app payment", so it seems that unlimited payments are possible if using the common technique of repeated payments.

Pay Services Usable for Tax Payments

When comparing various Pay services, it's necessary to check their limits.
The limit table from Furusato Choice is helpful for getting an idea.
It's also important to know how points can be earned.

First, PayPay has low limits for card charging, and even for bank transfers, etc., it's 500,000 yen/day and 2 million yen/month, lacking scalability.

For d payment, when using balance, the one-time payment limit is 1 million yen, which is the balance limit, and you need to input it each time via bank transfer or convenience store. Credit card payments are limited to 500,000 yen/month per d account.

au pay is similar. You can charge the balance with a credit card, but the total is limited to 250,000 yen per month, which is a small amount.

LINE Pay doesn't allow charging with credit cards, and the LINE point award limit for Charge & Pay using credit cards is limited to 500 points/month (5% return). Also, online/invoice payments are not eligible for points in the first place, so you only get points from the credit card itself.

Merpay has a monthly limit of 3 million yen (it's unclear if this applies to code payments).
Card charging is not possible, so it might be suitable for frequent Mercari users.

In the end, if scalability is needed, Amazon Pay becomes the only choice both functionally and by process of elimination.
This is a familiar method for hometown tax donations.
However, if you're seeking efficiency, you might accumulate too many Amazon points, which could be difficult to use if you don't shop on Amazon often.

Basic Knowledge of Amazon Pay

With Amazon Pay, the basic strategy is to charge Amazon gift card balance (Amagif balance) to your account and specify it at the time of payment.
In this case, you can earn points from credit cards or campaigns when charging, and if there are campaigns for the latter, you can earn points there as well.
For Amazon Pay, it's important whether you can use Amagif balance for payments, but according to a Yahoo News article, it can be used, so it should be fine.

I couldn't find an official source, but according to Furusato Choice's limit table and various EC sites, Amazon Pay allows up to 10 million yen per transaction, and there's probably no monthly limit.
However, you need to link some kind of card at the time of payment, and even if the credit card payment is 0 yen, an authorization probably goes through (I was rejected by the credit card company when I made consecutive purchases for hometown tax donations before).
To avoid this, it's good to inform the card company in advance or link a suitable debit card.

Also, if there's a return campaign at the time of payment, it's beneficial.
Amazon Pay has a campaign offering 1% return for Amagif balance payments, but it's explicitly stated that this doesn't apply to national tax payments. That's unfortunate.
By the way, there's a total 3% return for hometown tax donations in December, which seems good for last-minute tax donations.
The payment limit for this is 12.5 million yen, so it has quite good scalability.

What Credit Cards Can Be Used for Tax Payments?

After looking at the specifications so far, what's important is how many points you can actually get.
If you use Amazon Pay, you'll be earning on the Amagif charging part.

The main method for charging Amagif is using a credit card.
There are occasional point returns for cash charging as well, but it's not currently available and the next campaign date is unknown, so I'll assume credit card use from here on.

Now, let's look at the cards that seem usable.

Amazon Prime Mastercard

For gift card purchases, the efficiency of the official Amazon Mastercard is the highest.
Prime members using the pre-revision Gold card earn 2.5% Amazon points, while new Prime members earn 2.0%.

The limit varies by person, but it's up to 2 million yen if you try hard.
You might be able to increase it slightly (temporarily) if you plead with Sumitomo Mitsui Card.

Sumitomo Mitsui Card Platinum Preferred

This card offers constant 1% return and is known for its relaxed conditions from SMBC.
It was often considered for national tax payments in the credit card era.
While often recommended for point accumulation, its 33,000 yen annual fee is high for a 1% return rate, making it usually not very profitable.

The reason I'm introducing it is because of the 40,000 point new membership & usage bonus campaign.
If you use 400,000 yen within 3 months of new membership, you get a 2.75% return on 400,000 yen: 40,000+4,000-33,000=11,000.
If you don't cancel in the first year, there's also a campaign where you can get 40,000 points the following year if you spend 4 million yen, but in this ideal case, spending 4 million yen results in 80,000+40,000-66,000=54,000, reducing the return rate to 1.35%.

The limit is 5 million yen, as it's nominally a platinum card.

American Express Green Card

Amex cards generally offer a constant 1% point return (1 point per 100 yen).
While the return rate was reduced for national tax credit card payments, it's likely usable as is for Amagif purposes.

Amex's proprietary cards have an option called Membership Rewards Plus, which triples the points earned on Amazon purchases (3 points per 100 yen).
The annual fee is 13,200 yen (actually charged monthly), plus 3,300 yen for Membership Rewards Plus.

A point to note is that Amex points are significantly halved except for some travel-related uses.
ANA miles are 1:1, but in cases where you can use them as cash, it's about 1 yen per 2 points.
Therefore, you'll need to convert to ANA miles first (requiring a 5,500 yen Membership Rewards ANA Course participation fee), and then go through point sites.
I'll omit the details as it's lengthy, but if you manage to avoid hitting exchange limits, you should be able to exchange points and cash at a 1:1 ratio.

Also, the Rewards Plus bonus is limited to 5 million yen in payments, so be careful of the limit, similar to Platinum Preferred.
Amex's limit seems to vary by person, but it's unclear if you can use 5 million yen right after issuance.
Pre-approval is currently only available for taxes, so it might be difficult to use for Amagif.

While you might be able to achieve a high return rate if used well, there are generally many uncertain factors.
There are also various campaigns, but I'll calculate without considering these as it becomes too complex.

Luxury Card Gold

This is the Luxury Card famous for (?) tax payments.
The official site states that the return rate doesn't change even for tax payments, so it seems to be a clear target.

This card is divided into three types: Titanium (1% return), Black (1.25% return), and Gold (1.5% return), but the annual fee doubles for each tier.
The Gold's annual fee of 220,000 yen often offsets the point increase, but for high amounts, combining it with the first year half-price annual fee increases the chance of profit.

The limit is 100 million yen if you pre-deposit.
Like Amex, it's explicitly stated that it can be used for shopping, so it should be usable without problems.

So Which One Is Best?

We've looked at several cards so far, but visualization might make it easier to understand, so I had Geogebra draw it.
It's published here.

{{< figure src="https://res.cloudinary.com/purucloud/image/upload/v1670144449/blog/misc/tax-card-comparison.png" title="Card Comparison" class="center" width="600" >}}

In conclusion, the following can be understood from the graph:

• Pay up to the limit with Amazon Mastercard (if you're a Prime member using the old Gold card)
• For amounts over 2 million yen, use Platinum Preferred (in the first year) if it's 400,000 yen or more and less than 1.5 million yen, use Amex if it's 1.5 million yen or more
• For amounts over 7 million yen, use Titan if less than 11 million yen, Black if less than 22 million yen, and Gold for anything above that
• For amounts over 100 million yen... it's unclear

In this case, theoretically, if you pay 30 million yen, 50,000+128,000+235,000=413,000 will be returned in some form of points.
When I calculated with credit card payment, it was about 90,000 yen, so you can see that the return rate has increased significantly.
I considered the ideal case this time, but it won't be this simple due to various situations and limit considerations.
Especially when using multiple cards, it becomes complex, so consider your own best combination.

How Do You Actually Make the Payment?

Finally, let's consider what might happen when actually making the payment.

As one payment is limited to 300,000 yen, if you're paying 3 million yen, you'll need to go through the procedure 10 times, and for 30 million yen, 100 times.
I briefly looked at the items, and there are quite a lot of input fields.
For high amounts, it might be good to create a system that continuously hits it with Selenium etc., setting the UA to smartphone.
Even if one transaction takes 5 minutes, 3 million yen worth can be completed in 50 minutes, and 30 million yen in 500 minutes, so it can be easily completed within the tax payment grace period of several months.
It might be easy to execute if you keep the Amazon gift card balance to the minimum and stop when an error occurs.
Make sure to test thoroughly before proceeding.

Also, there's a high possibility of being suspected of cash conversion or fraudulent use by the card company or Pay service.
Don't neglect various confirmations and preparations.

Summary

While smartphone payments are indeed a game changer, there are various restrictions and many points to be careful about.
Caution is needed to avoid getting caught, but there's no productivity in spending time researching such things in the first place, so those of you reading this should spend your time more meaningfully.