Revision of the Tax-Exemption System for Foreign Travelers from November 1

The tax-exemption system for foreign travelers will be revised starting November 1, following the approval of the fiscal 2025 tax reform outline on December 27.

The system will shift from the current tax-free price sales to a “refund method,” where the product is sold including the consumption tax amount, and the tax equivalent is refunded to the eligible individuals upon verification of the goods being taken out of the country at the time of departure.

Additionally, the elimination of the same store’s daily purchase limit for consumables, special packaging, and the distinction between general goods and consumables will be implemented. Items with a high risk of being purchased for illicit purposes, such as gold bullion, will be individually stipulated as excluded from tax-free sales.

The procedure for sales will also undergo revisions. Tax-free sales for individuals entering Japan with a permit for ship-based tourism necessitate the presentation of the landing permit or passport, and sellers are required to provide purchase record information based on the passport number. For Japanese nationals who do not have a residence in Japan for more than two years, an individual number card is added as a proof document, and the current proof documents no longer need to include the address of the permanent domicile. Sellers need to provide the type of proof document and the date of overseas relocation, among other purchase record information.

Sellers are required to provide customs confirmation information for each purchase record through the National Tax Agency’s tax-free sales management system. For tax-exempt items worth 1 million yen or more, information identifying the item, such as a serial number, must be added.

Furthermore, the requirements for the permission of goods for export sale locations will be reviewed, along with the abolition of the on-base goods for export sale locations system, and the establishment of immediate collection and penalties for eligible buyers of tax-free purchases.