Japan is a paradise for shoppers, featuring everything from the latest in hot technology to artisan goods unchanged for a thousand years. But bringing goods from this mecca back to your home country can sometimes be confusing and expensive, especially when sales tax is generally higher in Japan than in your home country. Luckily for many tourists, recent changes to the law have made it easier than ever to get just about anything tax-free when you shop in Japan. By answering just a few quick questions you can easily understand how to get a tax refund in Japan for your purchased items.
Photo by Unsplash by freestocks.org
1. How long have you been in Japan?
The 8% tax refund is available to all foreign visitors who stayed in Japan for less than six months. This accounts for 80% of the consumption tax in Japan (Consumption tax is 10% as of 2019). You cannot be working in Japan, nor can you be a Japanese citizen. Your passport must be stamped with the date of entry (so avoid automatic immigration modules if possible) and should be on hand when purchasing at the tax-free counter. Copies of your passport cannot be used to receive a refund.
Photo by Unsplash by Jeremy Dorrough
2. Where are you shopping?
Small stores may not offer the 8-10% VAT refund, so make sure you locate the tax-free sign before assuming you’ll get the discount. Most major corporations and designer goods stores (especially in bigger cities like Tokyo and Osaka) offer a tax-free counter, but it may be good to check with customer service before making any big purchases.
Photo from Unsplash by Marcus Loke
3. How much did you spend?
Any combination of consumables (snacks, sweets, cosmetics, etc) and general goods (clothing, merchandise, household items, etc) over ¥5000 are eligible for a tax return. Some stores will include the sales tax already in the price– in this case, that tax will be deducted from your total, so make sure your total is over ¥5000 excluding tax. For consumables, there is an upper limit of ¥500,000, so if you are buying any luxury items, be sure to make a separate transaction to ensure you receive the duty-free price since general goods (unused) have no cap on VAT refunds.
Photo from Photo AC by 紺色らいおん
WOOHOO! You’ve figured out your purchase is eligible. Now, what do you do?
Well, there are two different ways to get that sweet refund cash. The first is to present your passport at the time of purchase and pay the price without tax added. The second is to pay in full, then go to the store’s tax-free counter with your receipt and passport to receive your cash refund.
If using the 2nd method of shopping, make sure you receive the paperwork from the tax-free counter. The staff should staple an official Record of Purchase into your passport, and make sure you keep your receipt as well, for customs officers at the airport. You also need to sign a Purchaser’s pledge, promising to keep consumables packed in sealed bags until after you’ve left Japan, and a promise to take other general goods out of the country. If you don’t have the goods when a customs officer inspects your purchases (i.e you got hungry on the way to the airport and broke into the Pocky boxes), you may be required to repay the tax in full. You must keep consumables in unopened sealed bags to receive the refund.
Speaking of Airports, make sure your documents are all in order until you reach the customs counter at the airport. The officials will see your passport and collect your Record of Purchase. They may ask to see the goods and your receipts, so have those handy just in case.
Once you’re through with customs, you’re home free! If you want to continue to take advantage of the tax-free rules, you can double your refund by purchasing products at the duty-free in the airports, which removes both the Government tax AND the 8-10% VAT.
Photo from Unsplash by Patrick Tomasso
At the end of the day, being smart about your purchases and checking beforehand can help you have a hassle-free Japanese shopping experience! So, what are you waiting for? I think it’s time to go shopping!
Follow us at Expat Japan Life for more articles about Japan. You can also follow us on Facebook, Instagram, and Twitter for blog updates and information about living in Tokyo!