Tax exemption system for foreign visitors to Japan

Tax exemption system for foreign visitors to Japan

Update: 22 March 2016

Japan has a system of consumption tax exemption for foreign visitors.

Who is eligible for tax exemption?

Foreigners who visit Japan temporarily are in principle treated as non-residents and therefore eligible for tax exemption.

Conditions for tax exemption

Conditions of consumption tax exemption are limited to goods (commodities and consumable items) which are necessary for individual's normal life.

Goods subject to tax exemption

All goods taken out of Japan are in principle subject to the exemption, but a minimum purchase amount and upper limit are established. Also, commodities and consumable items are tallied separately.

What are commodities?

Consumer electronics, jewelry, watches, clothing, bags, shoes, folk crafts, etc. However, this applies when a non-resident purchases more than 10,000 JPY (excl. tax) at one shop on the same day. Commodities are required to be taken out of Japan within six months of the purchase date. In addition, a photocopy or picture of your passport is taken when the total amount of purchases is above 1 million JPY.

What are consumable items?

Consumable items include foodstuffs, fruits, cosmetics, beverages, medicine and cigarettes. However, this applies when a non-resident purchases more than 5,000 JPY (excl. tax) up to 500,000 JPY at one shop on the same day. Consumable items are required to be kept unopened and taken out of Japan within 30 days of the purchase date.

Procedures

Only tax-free shops offer tax exemption procedures. You are also required to undergo tax exemption procedures on the day of the purchase. There are broadly two procedure methods.

When you buy goods including the consumption tax

1. After the purchase, go to the tax exemption service counter at the shop and show the items purchased, your passport, the receipts and if you used a credit card to pay, the credit card.
2. Sign the Covenant of Purchaser.
3. Receive the Record of Purchase.
4. The Consumption Tax you already paid will be paid back in cash or to the credit card (there may be a processing fee).
5. When you depart from Japan, submit the Record of Purchase at customs.

When you buy goods excluding the consumption tax

1. When you make a purchase at a tax-free shop, you show your passport and buy it at the price excluding the consumption tax.
2. Sign the Covenant of Purchaser.
3. Receive the Record of Purchase.
4. When you depart from Japan, submit the Record of Purchase to the customs.

What is a Covenant of Purchaser?

It is a document in which you pledge that you bring the items you purchased out of Japan, do not consume them before you depart from Japan and that you take consumable items out of Japan within 30 days from the purchase date. Sign it when the document is handed to you at the shop.

What is a Record of Purchase?

You receive a Record of Purchase from the shop when you purchase an item. The Record of Purchase you received is attached to your passport and submitted to customs when you depart from Japan. If you lose the Record of Purchase or it falls off, the tax exemption may become invalid.

Locations of tax-free shops

Only shops which are licensed by the superintendent of a taxation office can sell tax-free items. Tax-free shops show stickers or flags of "tax-free signs" established by the Japan Tourism Agency at their shop front and you can also search for their locations in multiple languages at the dedicated website.

*This information is from the time of this article's publication.

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