When traveling to Japan, you can enjoy better prices than in Europe, thanks in part to the favorable exchange rate between the euro and the yen. The yen remains relatively weak against the euro, boosting your purchasing power. This makes shopping for electronics, clothing, and souvenirs especially attractive.
But that’s not all! Japan offers a "Tax-Free" program for foreign visitors, allowing for VAT exemptions on your purchases under certain conditions.
Not sure how it works? No worries, here’s a complete guide to help you take advantage of the "Tax-Free" program during your stay in Japan.
What is the VAT rate in Japan, and how much can you save?
In Japan, the VAT rate is 10% for most products, with a reduced rate of 8% for items like takeout food and drinks.
By purchasing items in Japan and using the "Tax-Free" program, you can save 10% on your purchases, which, combined with the favorable exchange rate, can lead to total savings of 20–30%. These savings can add up quickly, especially if you’re planning to buy high-ticket items like electronics or branded clothing.
How does the "Tax-Free" program work in Japan?
The "Tax-Free" program is an exclusive benefit for foreign tourists who are not residents of Japan.
Here are the conditions to qualify for the program:
- Your tourist status: You must be a temporary visitor in Japan, staying for less than six months.
- Shopping at participating stores: You must make your purchases in a store displaying the "Tax-Free" logo. These stores are often located in major cities and tourist areas.
- Minimum purchase amount: The total amount of your purchases must be between 5,000 and 500,000 yen before tax (approximately €36 to €3,600). This threshold applies to both consumables (food, cosmetics) and non-consumable goods (clothing, electronics).
The specific rules for tax exemption depend on the type of purchase, which we’ll explain further below.
What are the conditions for avoiding VAT in Japan?
The rules are designed to prevent reselling tax-exempt goods, ensuring Japan's economic interests are protected.
Consumable products
Consumables include food, beverages, cosmetics, and medicines. These items are subject to strict rules to ensure they are meant for export, not local consumption:
- Packaging condition: The items will be sealed in a bag by the store, and you cannot open the bag while still in Japan.
- No consumption before leaving Japan: If you open the bag before departing the country, you’ll need to pay VAT at customs.
- Total purchase amount: The total value of consumable items must be between 5,000 and 500,000 yen before tax (around 35 € to 34,000 €).
Simply put, if you’re buying consumable goods tax-free, it’s solely for taking them back to your home country.
Non-consumable products
Non-consumable items include clothing, electronics, jewelry, and watches. The rules for these products are more flexible:
- Immediate use allowed: You can use these items right after purchase, unlike consumables.
- Export within six months: These items must leave Japan with you within six months of your arrival.
- Total purchase amount: The total value of non-consumable items must also be between 5,000 and 500,000 yen before tax (around 35 € to 34,000 €).
If you need to buy products like a backpack, a hat, or a watch, it’s worth waiting until you’re in Japan.
Can you combine consumable and non-consumable items?
It's important to note that you cannot combine consumable and non-consumable items to reach the 5,000-yen tax-free threshold.
Each category must meet the minimum individually. For example, if you buy 2,500 yen of food and 2,500 yen of clothing, you won’t qualify for the "Tax-Free" program.
However, you can purchase consumables for immediate use (like snacks) alongside other items meant for export, as long as each category meets the 5,000-yen minimum.
Which stores offer the "Tax-Free" program?
The "Tax-Free" program is available in many stores across Japan, especially in tourist areas and large shopping centers. Popular chains like BicCamera, Don Quijote, and major department stores in Tokyo, Kyoto, and Osaka usually participate.
To identify these stores, look for the "Tax-Free" logo at the entrance or near the checkout. You’ll also find tax-free services at duty-free shops in Japanese airports.
What is the "Tax-Free" process in stores?
The tax-free process in Japan is straightforward, though it may vary slightly from store to store. Here are the key steps:
Choose the dedicated checkout
In large stores like BicCamera or Don Quijote, there’s usually a dedicated checkout for customers who want to take advantage of the "Tax-Free" program. Make sure to choose this counter so that the VAT exemption is applied directly at the time of purchase.
In shopping malls, you’ll often need to pay VAT first, then visit a designated "Tax-Free" office afterward to get a refund.
Show your passport
Store staff will ask to see your passport to verify your eligibility for VAT exemption. You have two options:
- Physical passport with entry stamp: You’ll need your original passport with the stamp from when you entered Japan.
- QR code from Japan Visit Web: Some stores also accept a QR code generated by the Japan Visit Web site, which scans your passport’s entry stamp. This method is faster, but it requires the store to have a QR code reader, which smaller shops may not have.
Pay for your items
Depending on the store, you’ll either pay the full amount without VAT or pay with VAT and claim a refund later at the "Tax-Free" office.
In any case, the store will register your purchase information online. Be sure to keep your receipt as proof of purchase until you leave Japan.
What happens at the airport when you leave Japan?
At the airport, customs officers will check your passport and may ask you to present the items you bought tax-free. Generally, they focus on consumable goods, although many travelers report not being checked at all when leaving the country.
If you’ve packed tax-free items in your checked luggage, you’ll need to inform the check-in staff because a customs officer may need to inspect your items before they’re checked in.
Pro tip for even more savings!
Some major chains offer additional discounts for tourists using the "Tax-Free" program. For example:
- BicCamera offers up to an extra 5% off on top of the VAT exemption.
- Don Quijote provides a 5% discount for purchases over 10,000 yen, in addition to the VAT exemption.
These offers vary depending on current promotions. You can check available deals on the "Tax-Free Shops" website or the individual store's site.
FAQs about the "Tax-Free" program
Can I get a VAT refund later if I don’t have my passport with me?
No, your passport is required at the time of purchase to qualify for the program. If the store accepts the QR code from Japan Visit Web, you can use that instead of your passport.
Can I get a VAT refund for an item someone else bought?
No, the product must be purchased by the person claiming the VAT refund.
What if I used the automated gates at the airport upon arrival?
Unfortunately, in this case, your only option is to use the QR code from Japan Visit Web. If the store doesn’t accept QR codes, you’ll have to pay VAT and won’t be able to get a refund.
At the airport, you can request not to use the automated gates to ensure you get a passport stamp.
Which bag should I pack my tax-free items in?
It’s best to keep them in your carry-on, as customs officers may want to inspect your purchases. Be mindful of liquid restrictions in carry-on bags.
Can I give my tax-free purchases to someone else?
This is strictly forbidden while you’re still in Japan. Once you’ve left the country, you can do as you wish. Remember that customs officers may check your purchases when you exit Japan.