Japan starts tax-refund system for foreign shoppers - NHKニュース

Japan has introduced a new refund-based system for travelers from overseas, replacing its tax-free shopping program. The change took effect on Sunday in response to continued misuse of the previous scheme.

Under the new system, foreign shoppers pay tax-inclusive prices even for items eligible for tax exemption. The shoppers later receive a refund equivalent to the consumption tax from retailers via means such as credit cards and payment apps, after customs confirms at the shoppers' departure that the items are leaving the country.

The refund procedure must be completed within 90 days of purchase.

Under the previous system, foreign visitors could buy items eligible for tax exemption without paying consumption tax. Retailers were required to check the buyer's passports and inform them that the items had to be taken out of the country, and the retailers obtained refunds from the government for the consumption tax they had already paid.

However, abuses of the tax-free scheme repeatedly came to light. In some cases, tax-exempt items were resold in Japan for profit. In other cases, retailers made fraudulent claims for consumption tax refunds.

The new program is expected to curb misuse more effectively, partly because overseas travelers must complete the refund procedure themselves.