Photo: Kakidai, Wikimedia Commons, CC BY-SA 4.0 (file photo, September 2018). The Matsuya Ginza department store in Tokyo’s Chuo Ward.
Foreign visitors shopping at Tokyo’s Ginza department stores and other tax-free shops in Osaka and across Japan now pay the full, tax-inclusive price at the register and get the consumption tax back only after customs confirms at departure that the goods are leaving the country. The new Japan tax-free shopping refund system took effect on Sunday, Nov. 1.
The switch is the first overhaul of a system introduced in 1952, about 74 years ago, and is meant to stop people from reselling tax-free goods inside Japan, The Mainichi reported. Under the old rules, which ran through October, shoppers who showed a passport paid no consumption tax at the counter. The paper said there had been repeated cases of buyers reselling those goods domestically and pocketing the tax savings.
How the new refund works
For purchases made on or after Nov. 1, refunds come only “after a customs inspection at the airport or seaport confirms that the goods are being taken out of Japan,” according to Japan Customs. Purchases must total at least ¥5,000 (about $32), excluding tax, at one store on one day. Gold and platinum bullion are excluded, and travelers can claim only what they can carry out themselves.
Within 90 days of buying, a traveler presents a passport at a tax-free kiosk at the airport or port. A “Green Result” ends the process. A “Red Result” means officers will check the goods in a customs inspection area. Refunds are then paid to a credit card, in cash or by other means, and none is given if the goods cannot be confirmed, The Mainichi said.
The change also removes the old ¥500,000 per-store daily cap on consumables such as food and cosmetics, ends the split between those items and general goods like clothing and electronics, and scraps the special sealed bags, the paper reported.
Day one in Ginza and at Kansai Airport
At the tax-free counter of Matsuya Ginza in Tokyo’s Chuo Ward, an employee handed flyers to shoppers on Sunday and explained the new method in Chinese and English, telling them, “From today it’s a new tax-free system,” the Nikkei reported (TBR translation). The paper said some visitors voiced confusion. In Osaka, Kansai International Airport fielded questions from foreign travelers about the refund steps on the first day, NHK reported. Neither outlet gave a count of problems, and no official tally of first-day complaints has been published.
Some Tokyo retailers prepared their own warnings. Maehara Koei Shoten, an umbrella maker in Taito Ward whose umbrellas sell for ¥20,000 to ¥40,000, printed flyers in four languages telling buyers not to check their umbrellas as luggage before the customs step, the Asahi Shimbun reported. “If a customer buys ¥100,000 worth and doesn’t get the ¥10,000 back, that’s a big blow,” Seiji Maehara, 54, the company’s representative director, told the paper (TBR translation). “Even if we explain it at the shop, by the time they’ve gone sightseeing and are heading home, it could be, ‘What was that again?'”
Ocean, a refund agent based in Chuo Ward that handles repayments for stores, told the Asahi that inquiries from retailers in August through October ran about three times the May to July level, and requests to sign up right away were about five times higher. “Many businesses don’t even know the system is changing,” said Masataka Kato, a company director.
The traps for travelers
The Japan Tourism Agency’s guide for visitors lists the mistakes that can cost a refund:
- Checked bags: all tax-free goods must be in hand at the kiosk, so the step cannot be done after checking luggage, and airlines will not hand bags back for it.
- One receipt, all or nothing: customs confirms each receipt as a whole. If even one item on it is missing, no refund is paid for anything on that receipt.
- Eaten or used up: food, drinks or cosmetics consumed in Japan must be declared to an officer at the customs counter instead.
- Timing: travelers need to leave enough time before boarding. If the check makes someone miss a flight, neither the airline nor customs will compensate them.
- Connections: anyone flying home through another Japanese airport must complete the step at the last airport before leaving Japan.
At Narita, Haneda, Kansai, Chubu Centrair, Fukuoka, New Chitose and Naha airports, visitors can also finish the check online through Visit Japan Web, using a dedicated Wi-Fi network in the departure lobby before security. That option is open only to people with temporary visitor, diplomat or official status. Goods cleared by customs must leave the country promptly, or the tax is collected and penalties apply, the agency says.
The Asahi noted in its coverage that, with the yen still weak, Japanese goods remain inexpensive for buyers from abroad even with tax included, so paying up front is unlikely to deter many shoppers. The currency’s slide is the subject of our report on Tokyo’s yen intervention warning, and residents face November price hikes on food and record power bills. More regional coverage is on TBR’s Asia-Pacific page.
Sources
- Japan Customs: Tax Exemption (Refund) Program for Foreign Visitors
- Japan Tourism Agency: Information on the new tax-free shopping system for travelers
- The Mainichi: New tax-free system for foreign visitors takes effect
- Nikkei (Japanese): Refund method for inbound tax exemption begins
- NHK (Japanese): Tax-free system for foreign travelers changes; Kansai Airport
- Asahi Shimbun (Japanese): Tax-inclusive prices at tax-free shops, Oct. 31
Additional sources
- National Tax Agency (Japanese): Review of the tax-free shop system and the refund method
- Matsuya Ginza: Tax-free service guide for overseas visitors
- If a store uses a shared tax-free counter, same-day purchases at several shops can be combined to reach the ¥5,000 minimum, the Japan Tourism Agency says.
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