Back in 2023, Japan mulled changing its tax-free shopping rules to help curb abuse by shoppers re-selling items with a markup after leaving the country. Currently, the Japanese tax-free shopping system is one of the most convenient in the world, with the 10 percent consumption tax deducted right at the point of payment after showing your passport. The downside is that this system has been easy to take advantage of, with people purchasing tax-free items in Japan and later selling them at tax-inclusive prices outside the country.
To help solve this problem, Japan will be introducing new tax exemption rules as early as fiscal 2026. As reported by The Yomiuri Shimbun, the government is looking to change the tax-free shopping process by having tourists purchase items at prices that include consumption tax and have them apply for refunds when leaving the country.
Upon departure, the refunds will be given either in cash or through credit cards registered in advance. This process is hardly unheard of, with countries in regions including Europe using similar systems.
In addition to introducing the new refund process, the government is considering removing the maximum shopping limit on purchases of consumables (items such as cosmetics and food), which is now ¥500,000.
We’ll provide further updates once the new tax-free shopping rules are set in stone.
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