Stefanie Akkerman moved from the Netherlands to Japan in 2013 with her Japanese husband and son. She jumped into the niche of Dutch tour guiding in Tokyo and Kamakura in 2015 and occasionally writes articles about all the great sights and activities Japan has to offer. She loves (Japanese) food, and to work that all off she goes diving, snorkeling, cycling, or hiking.
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Tourists come to Japan for many reasons: the food, the interesting history, the pop culture, the beautiful cultural heritage sites, the winter sports, the diving, and the list goes on and on.
Besides all the other reasons to travel to Japan, shopping is a popular motive for many to come to Japan. This is with good reason, as Japan is a true shopper’s paradise for everyone looking for things ranging from luxury goods to cheap bargains. However, did you know that tourists can shop tax-free in Japan? Let’s have a closer look at this wallet-friendly way to shop till you drop!
1. What is Tax-Free Shopping
Most countries have a law that states that companies have to levy a sales tax on their products and services in order to collect tax revenue. Companies and shops charge this sales tax or consumption tax on top of their actual product price. This sales tax is then paid by the company to the country’s internal revenue service.
In Japan, the amount of sales tax is set at 10% (8% for food and drinks). Sometimes, the prices shown in the shop are tax-included, and sometimes the prices on the labels are not yet inclusive of sales tax. In Japan, most shops show both prices on product labels; the larger price you see is exclusive of tax, and the smaller price shows the price with sales tax included.
Japan, like many countries, exempts temporary visitors from having to pay sales tax under certain conditions.
2. Who Can Shop Tax-Free in Japan?
Anyone who comes to Japan as a temporary visitor and fulfills certain conditions can enjoy tax-free shopping. Here are the rules about who is eligible for tax-free shopping in Japan:
- Non-residents: Tax-free shopping is only available for people who come to Japan as a non-resident. You are not allowed to shop on a Japanese resident’s behalf and then sell them back the goods at the tax-free price.
- Less than six months: You can only shop tax-free if you stay in Japan for less than six months and are not registered at a City Hall in Japan
- Passport stamp: You need to have a stamp in your passport that shows your date of entry. This means that you can’t have entered through an automated gate.
The products have to be taken out of Japan for personal use or given away as presents at home. This might be checked at the airport as the shop will send your electronic purchase record to the Japanese authorities, and they may request you to show them the unopened and unused product at the airport when you are leaving Japan. If you can’t show them the product in that state, they will charge you the sales tax before you leave the country.
3. How to Shop Tax-Free in Japan
Not all shops are able to deal with the administration that comes with tax-free shopping. So how can you tell which shop in Japan is eligible for tax-free shopping? Look out for the handy stickers with a red/white logo and the words “Japan. Tax-free Shop,” and you can conveniently see where to go. Once you find a tax-free shop, you should keep in mind that there is a price limit that you need to stay below or above in order to fall into the tax-free bracket.
For tax-free, there are two main categories of goods; general goods (clothes, bags, watches, household items, etc.) and consumable goods (foods, drinks, cosmetics, etc.)
For general goods, you have to spend a minimum of 5000 JPY at one store on the same day to be eligible for tax-free shopping. For consumable goods, the total amount you are spending has to be between 5000 and 500,000 JPY at one store on the same day. In the case of consumable goods, all goods have to exit Japan within the next 30 days.
Once you have made your eligible purchases, you have to go to the store’s tax-free counter with your passport, your receipt, the purchased goods, and your credit card, which must have the same name as in your passport (corporate credit cards are not eligible). At this counter, they will refund you the sales tax, pack your goods as required by the government, and make a digital record for the Japanese government that will automatically show up when you leave the country. Some stores also offer a direct discount at the cashier when showing your foreign passport, but it depends on the store whether they offer this option.
4. Where to Tax-Free Shop in Japan
There are many kinds of stores where you can shop tax-free in Japan, and especially stores that are very popular with overseas tourists tend to advertise their tax-free shopping options clearly. Think about stores like Bic Camera (electronics), Uniqlo (apparel), Don Quijote (variety store), large chain drug stores, cosmetic stores, and department stores such as Mitsukoshi.
Some smaller stores also have tax-free shopping options, especially now many shopping streets and malls have set up tax-free counters that can be easily used by smaller shops as well. This means that in areas like Nakano Broadway, where many tourists love to shop, there are plenty of smaller stores that also participate in the tax-free shopping program. You can use a website like Taxfreeshops to find stores near where you are staying in Japan.
5. What is Duty-Free Shopping?
Many people often confuse tax-free shopping with duty-free shopping. While they are similar in that both options make it cheaper for international tourists to shop at their travel destinations, the type of product and type of tax exemption is different. If you shop at a duty-free shop, which can usually be found at the airport and select shopping malls like T Galleria in Naha, Okinawa, you can buy products like tobacco, alcohol, and certain cosmetics duty-free. The price you pay should be lower than elsewhere because duty tax and consumption tax are not added. Tax-free shopping only refers to shopping where consumption tax (VAT) is subtracted.
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