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To reduce abuse, Japan is thinking about changing the laws governing tax-free shopping


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    Tax-free shop in Japan
    Photo: Ahmad Faizal Yahya/DreamstimeUndated stock photo of a tax-free shop in Japan

    Currently, Japan has one of the easiest tax-free shopping systems in the world

    Lim Chee Wah

    Japan’s tax-free shopping is one of the best and most convenient in the world. In most countries, you pay the full tax-inclusive amount at the shops, then show your purchase at the airport for verification before filing for a tax refund prior to departure. In Japan, however, the process is a lot easier, where the 10 percent consumption tax is deducted at the point of payment in shops (you’ll need to have your passport with you, of course).

    But this could soon change. The Japanese government is considering changing the system beginning the next fiscal year in 2024. According to a report by Kyodo News, the current tax-free system is increasingly being abused, where items bought tax-free in Japan are being sold at tax-inclusive prices plus a mark-up for profit outside the country.

    As such, the government might look into changing the tax-free system, where tourists pay the full amount in shops and claim for tax refunds later, most likely at the point of departure. A decision has yet to be made, as the government is likely to begin discussion on the matter later in the year.

    Currently, tourists who are visiting Japan on a short-term visa are eligible for tax-free shopping benefits. Tax exemptions are applicable for purchases exceeding ¥5,000 in participating shops, provided the goods purchased are for personal consumption outside the country.

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    • Lim Chee Wah
      Editor-in-Chief, Time Out Tokyo

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