Starting November 1, Japan's new tax-free shopping system will require international visitors to pay consumption tax at the time of purchase and claim refunds upon clearing customs or after leaving the country.
Changes to the Tax-Free System
Under the outgoing system, which expires at the end of October 2026, international visitors staying in Japan for up to six months—as well as some Japanese citizens temporarily returning from living abroad—have been able to purchase goods at tax-free shops without paying consumption tax (8% for food and nonalcoholic beverages and 10% for other types of items). While general goods had no spending limit, purchases of consumable items were subject to a daily cap of ¥500,000 per store.
From November, this will change with the introduction of a new “pay now, refund later” model, under which shoppers must pay the full tax-inclusive price on items at tax-free shops. Upon departure, they complete a customs procedure to receive a refund to their credit card or via another payment method before boarding or after leaving the country.
There will no longer be a distinction between general and consumable goods, and no spending cap, though travelers will be limited to what they can personally carry out of the country upon departure. Items must be purchased within 90 days prior to departure to qualify for a refund.
Annual Consumption Tax Exemptions Total ¥200 Billion
Tax-free shopping for international visitors to Japan began in 1989, the year that the consumption tax was introduced, and the recent rise in inbound tourism has led to increased spending. According to Japan Tourism Agency statistics, international visitors spent a total of around ¥9.5 trillion in 2025, or nearly triple the amount recorded a decade ago.
Although the consumption tax exemption is intended for goods that will be consumed overseas, there has been an increasing number of cases in recent years where items purchased tax-free are suspected of being resold within Japan.
There are also moves in political circles to scrap the tax exemption system entirely. In June 2025, a study group within Japan’s ruling Liberal Democratic Party proposed that party leaders review, and possibly abolish, the system, noting that consumption tax exemptions for foreign tourists reached ¥200 billion in 2024. In August of that year, however, 10 retail groups, including the Japan Tax Free Association and the Japan Retailers Association, issued a joint statement urging that the system be preserved. Pointing out that annual tax-free sales had reached ¥2 trillion, the groups warned that “abolishing tax exemptions will harm international competitiveness.”
- Information on revision of the tax-free shopping system to a refund-based model (Japanese) from the National Tax Agency
- Data on inbound consumption (Japanese) from the Japan Tourism Agency
- Joint statement on the consumption tax exemption system for international visitors to Japan (Japanese) from the Japan Retailers Association
(Translated from Japanese.)
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