Japan to implement new tax refund system for tourists in 2026

22-03-25

Japan is preparing to introduce a new consumption tax refund system for international tourists, with the aim of optimising the shopping experience and strengthening fiscal integrity. This change, scheduled to come into effect on 1 November 2026, aims to align Japanese practices with international standards and address concerns related to the misuse of the current system.

Under the current system, tourists can purchase goods exempt from the 10% consumption tax on presentation of their passport at authorised shops. However, cases of abuse, such as the resale of duty-free goods within Japan, have been identified, prompting the government to re-evaluate this mechanism.

With the implementation of the new system, visitors will pay the full price of goods, including excise tax, at the time of purchase. Subsequently, when leaving the country, they will be able to claim the tax refund at customs control points, such as airports and seaports. This procedure will require tourists to present their receipts and possibly the purchased items for verification. Refunds will be made in cash or by transfer to a pre-registered credit card.

One of the most notable changes is the removal of the 500,000 yen purchase limit for consumable goods, such as food and cosmetics, as well as the removal of the strict packaging standards previously required for these items. These measures are intended to simplify the process for both consumers and retailers, reducing administrative burdens and facilitating a smoother shopping experience.

In addition, the product categories ‘general’ and ‘consumables’ will be unified under a single classification, eliminating the need for differentiation and further simplifying the reimbursement process. This reform aims not only to facilitate shopping for tourists, but also to strengthen fiscal supervision and prevent fraudulent activities related to tax exemption.

Japan's decision to adopt this new tax refund system reflects a global trend towards standardisation of tax practices in tourism. By aligning with methods used in Europe and other regions, Japan hopes to offer a more consistent and transparent experience for international visitors, while protecting its economy from potential tax avoidance.

For tourists, this change means greater responsibility in managing their purchases and tax refunds. It will be essential to keep all receipts and be prepared to present both documentation and goods at exit points. Prospective visitors are advised to familiarise themselves with the new procedure prior to their trip to ensure a smooth experience.

For their part, retailers will need to adapt to this new framework, adjusting their billing systems and staff training to ensure compliance with the new regulations. The transition to this reimbursement system will require close collaboration between the government, businesses and tourists to achieve a successful and beneficial implementation for all parties involved.

The reform of Japan's consumption tax system for tourists represents a significant step towards modernisation and tax transparency. By implementing a refund process instead of direct exemptions at the point of sale, Japan seeks to improve the visitor experience and safeguard the integrity of its tax system. Tourists planning to visit Japan from November 2026 should be aware of these changes and prepare their purchases accordingly to take full advantage of the new system.

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