New Tourist Tax Rules in Japan: Tourists in Japan to Pay Taxes Upfront, Claim Refund later at Airports

Japan is revamping its tourist consumption tax system with a shift to a refund-based model, set to start in fiscal 2026.

Under the new system, international visitors will be required to pay consumption tax at the time of purchase but can claim refunds upon departure. This change aims to control the fraud linked to tax-exempt items, particularly their resale within Japan, while aligning the country's tax practices with global standards.

Currently, tourists benefit from tax-free shopping by showing their passports at duty-free stores. However, fraudulent practices, including the resale of duty-free goods in the local market, have prompted the government to revise this system.

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Under the new rules, visitors will receive refunds at departure points, such as airports, after customs confirm that the items purchased are being exported. Refunds will be processed in cash or through pre-registered credit cards, aiming to reduce fraudulent activities and improve transparency.

The change also eases existing regulations by removing distinctions between different categories of goods. Previously, items were classified as either "general" goods, like clothing, or "consumables," like cosmetics and food.

Foreign visitors will no longer qualify for consumption tax exemptions when sending duty-free items from Japanese post offices, said officials as reported Japan Today.

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