Japan To Charge Tourists Consumption Tax and Refund At Departure
Thanks, scammers. Due to some people exploiting the system, Japan will now change how it handles duty-free purchasing by tourists.
By Himari Semans
Tourists to Japan have long enjoyed the pleasure of buying gifts for those back home — or for themselves — without paying the country’s consumption tax. But the system’s about to change slightly after some savvy shoppers found they could game it to their benefit.
Officials discuss duty-free changes
The Government Tax Commission will convene today with the Cabinet’s ruling parties, LDP and Komeito, to discuss changes to Japan’s consumption tax exemption system for foreign tourists’ duty-free store purchases.
Under the current system, purchases by foreign nationals at duty-free stores are exempt from consumption tax on the premise that they leave Japan unused. They also can’t be resold domestically.
However, in light of widespread illegal sales of duty-free purchases in 2022, government officials ramped up measures this May by levying businesses and foreign nationals for illegal resales of duty-free products. They’re now planning to revise the system itself.
Plans to refund tourists at departure
The Commission and Cabinet officials will go over the latest proposal to charge foreign tourists consumption tax at the time of purchase and later refund them the equivalent tax amount upon confirming the goods’ departure at airport customs.
European countries, Singapore, and Australia have already adopted this system of refunding the tax amount from duty-free purchases at the time of departure.
Japan’s system change will reportedly have finalized decisions within the year.