"Arrive at the Airport 3 Hours Early"... Japan Gives 'Tax Refund' at Departure

Japanese Government to Implement Changes in Duty-Free Shopping for Foreign Tourists
Prevent Resale of Duty-Free Goods...From On-Site to Departure Area
17 Billion Yen in Foreign Tourist Consumption Tax Uncollected Over 2 Years

Japan plans to change the consumption tax exemption system for inbound tourists as early as 2026 to a method that refunds taxes upon departure. Pixabay

From 2026, foreign tourists visiting Japan will be able to receive consumption tax exemption refunds when departing the country. Currently, short-term visitors receive the exemption at the point of purchase.

The Yomiuri Shimbun reported on the 28th that "the Japanese government and ruling party plan to reflect changes to the consumption tax exemption system for foreign tourists in the tax reform plan to be finalized within this month." In Japan, foreign tourists present their passports or other identification to prove they are staying for less than six months when purchasing goods domestically, and receive the consumption tax exemption immediately at the point of sale. Under the new system, tourists will first pay the price including consumption tax at stores in Japan, then receive a refund of the consumption tax at the airport upon departure after confirming the export of the purchased goods.

The reason Japan is changing the system is that some tourists are committing fraudulent acts by reselling tax-exempt goods within Japan instead of exporting them. In a 2022 customs investigation, out of 374 people who purchased tax-exempt goods worth over 100 million yen, only 57 were inspected by customs.

Among them, 56 individuals failed to confirm the export of goods and were subject to reclaiming the exempted tax, but 55 simply left the country, resulting in unpaid taxes amounting to 1.85 billion yen (approximately 17 billion KRW). The Japanese government has decided to prepare for system development and other preparations for the system change.