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Tourists come to Japan for many reasons: interesting food history popular culture beautiful cultural heritage sites winter sports diving And the list goes on and on.
In addition to all the other reasons to travel to Japan, shopping is a popular reason for many to come to Japan. That’s for good reason, as Japan is a veritable shopper’s paradise for anyone looking for everything from luxury items to bargains. However, did you know that tourists can shop duty free in Japan? Let’s take a closer look at this easy-to-use way to shop ’til you drop!
1. What are duty-free purchases?
Most countries have a law that states that businesses must collect sales tax on their products and services in order to collect tax revenue. Businesses and stores charge this sales tax or consumption tax in addition to the actual price of their products. The company then pays this sales tax to the country’s tax authorities.
In Japan, the sales tax amount is set at 10% (8% for food and beverages). Sometimes the prices displayed in the store are inclusive of VAT, and sometimes the prices on the labels are still exclusive of VAT. In Japan, most stores display both prices on product labels; the highest price you see does not include tax, and the lowest price shows the price including sales tax.
Japan, like many countries, exempts temporary visitors from paying sales tax under certain conditions.
2. Who can shop duty free in Japan?
Anyone who comes to Japan as a temporary visitor and who meets certain conditions is eligible for tax exemption. Here are the rules for who is eligible for duty-free shopping in Japan:
- nonresidents: Duty-free shopping is only available to people who come to Japan as non-residents. You are not allowed to make purchases on behalf of a Japanese resident and then resell the goods to them at the pre-tax price.
- less than six months: You can only make duty-free purchases if you are staying in Japan for less than six months and are not registered with a city hall in Japan
- passport stamp: You must have a stamp in your passport indicating your date of entry. This means that you cannot be entered through an automated gate.
Products must be taken out of Japan for personal use or given as a gift at home. This can be verified at the airport, as the store will send your electronic purchase record to the Japanese authorities, and they may ask you to show them the unopened and unused product at the airport when you leave Japan. If you can’t show them the product in these conditions, they will collect sales tax from you before you leave the country.
3. How to shop duty free in Japan
Not all stores can cope with the administration that comes with duty-free shopping. So how do you know which store in Japan is eligible for duty-free shopping? Look for the handy stickers with a red/white logo and the words “Japan”. Duty Free Shop”, and you can easily see where to go. Once you have found a zero fee store, you should be aware that there is a price limit that you must meet below or above to get into the zero fee band.
For the tax refund, there are two main categories of goods; general merchandise (clothing, bags, watches, household items, etc.) and consumer goods (food, beverages, cosmetics, etc.)
For general merchandise, you must spend a minimum of JPY 5,000 in a store on the same day to qualify for the tax refund. For consumer goods, the total amount you spend should be between JPY 5,000 and JPY 500,000 at a store on the same day. In the case of consumable goods, all goods must leave Japan within the next 30 days.
Once you have made your eligible purchases, you must present yourself at the duty-free counter of the store with your passport, your receipt, the products purchased and your credit card that must have the same name as on your passport (credit cards corporations are not Eligible). At this counter, they will refund sales tax, package your products as required by the government, and create a digital record for the Japanese government that will appear automatically when you leave the country. Some stores also offer a direct cashier discount when presenting your foreign passport, but it depends on the store if they offer this option.
4. Where to shop duty free in Japan
There are many kinds of shops where you can shop duty-free in Japan, and especially the shops popular with foreign tourists tend to clearly advertise their duty-free shopping options. Think stores like Bic Camera (electronics), Uniqlo (clothing), Don Quijote (variety store), big box drugstores, cosmetics stores, and department stores like Mitsukoshi.
Some smaller shops also offer duty-free shopping options, especially now that many high streets and malls have installed duty-free counters that can easily be used by smaller shops as well. This means that in areas like Nakano Broadway, where many tourists like to shop, there are many smaller stores that also participate in the duty-free program. You can use a website like Taxfreeshops to find stores near you in Japan.
5. What are duty-free purchases?
Many people often confuse duty-free shopping with duty-free shopping. Although they are similar in that both options allow international tourists to buy cheaper in their travel destinations, the type of product and the type of tax exemption are different. If you shop at a duty-free shop, usually found at the airport and select malls like T Galleria in Naha, Okinawa, you can buy items like tobacco, alcohol, and some cosmetics duty-free. The price you pay must be lower than other places because the customs tax and consumption tax are not added. Purchases with zero rate refer only to purchases where the consumption tax (VAT) is subtracted.
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