What Does Tax-Free Shopping Mean in Japan?

If you’ve never shopped tax-free outside of an airport duty-free shop, the process can be a little intimidating. But tax-free shopping is set up to save foreign visitors money during their travels, so it’s worth trying on your next trip to Japan! And in the end, it’s actually pretty simple. Like many parts of the world, Japan charges sales tax on all purchases, at a rate of 10% for most products and 8% for food (except restaurants etc. which charge 10%). But short-term foreign travelers are, in theory, exempt from this tax. Of course, it would be impractical for every single cashier in Japan to suss out the situation of every single customer who makes a purchase every single day of the year. To make things easier for all involved, while still giving foreign visitors a chance to save on sales tax, there are a few simple conditions and procedures for shopping tax-free in Japan. Read on to find out everything you need to know!

Who Can Shop Tax-Free in Japan?

The vast majority of shoppers eligible for tax-free services in Japan are foreign visitors in Japan on a tourist visa (or in Japan with a visa exemption made for tourists, like most Americans, Brits, Australians, etc). Technically, the rule is that you must be a resident of a country other than Japan to be eligible for tax-free shopping, which means that foreign nationals in Japan on student or work visas for 6 months or more cannot shop tax-free, but Japanese citizens who are residing outside of Japan long-term actually can. If you’re just in Japan sightseeing for a few days or weeks, you’re most likely good to go!

What Products Are Eligible for Tax-Free Shopping?

In theory, just about any product you might buy could be eligible for tax-free shopping. The key factor is that tax-free purchases must be brought with you when you leave Japan, and used/consumed outside of the country. That means you must pay sales tax on restaurant bills, hotel fees, tickets, and other services in Japan. Food products might go either way – if you buy snacks to bring home as souvenirs, you can buy them tax-free. If you buy snacks to eat at your hotel in Tokyo, you’d better be paying sales tax on that, buddy! Just remember that purchases you plan to take with you when you leave Japan are generally eligible, and you’re golden. You can find a more detailed explanation on the Japanese Ministry of Finance website!

One important rule to keep in mind, however, is that tax-free services in Japan are only available for purchases of 5,000 yen or more – before tax. This is probably to keep the labor expended on tax-free procedures to a minimum, since it creates a little extra work for everyone down the line. The strategy clearly works, though, since many shoppers will condense the majority of their tax-free shopping to a few shopping trips. If you want to save on tax, consolidate purchases when possible to keep your total above 5,000 yen!

Where Can You Shop Tax-Free? What Should You Look For in Japan?

If you come from a country that doesn’t commonly offer tax-free shopping for visitors, you might be surprised to find that Japan actually has dedicated tax-free shops outside of airports! These shops aren’t exactly found on every corner, but you might spy one in a neighborhood where travelers congregate. They often sell cosmetics and alcohol, as you might expect, but also less obvious products like rice cookers and other small household appliances.

Tax-free shopping is also commonly available at ordinary retailers like drug stores, clothing shops, department stores, and even sometimes convenience stores – especially chains and larger shops in areas with plenty of foreign shoppers. Most places will make it clear with a big sign or a sticker in the window stating “TAX-FREE” in clearly written English!

If the shop is a small local establishment and you don’t see any signs declaring tax-free shopping an option, it probably isn’t. But if you’re unsure, you can always ask! The word for “tax-free” in Japanese is “menzei” (免税, pronounced men-zey), and just asking about “menzei” is usually enough for shop staff to understand. Either they’ll point you in the right direction, or say no.

Common Japanese Tax-Free Shopping Procedures

Generally there are two ways to exempt yourself from paying sales tax on a purchase in Japan – by either paying the tax-free price in the first place, or getting a tax refund – and the correct procedure will depend on the shop itself. Most shops with tax-free shopping offer the first option, where you simply pay the tax-free price at checkout. At bigger shops with a lot of foreign shoppers, there might even be a dedicated tax-free checkout! At smaller shops, you’ll probably just line up with all the other customers, and let the shop staff know before you pay. (Try letting them know by asking for “menzei”!) The cashier will ask for your passport so they can check your eligibility and register your purchase, and then all you have to do is pay the discounted price. (If you’re planning to shop tax-free, make sure you get your passport stamped on the way into Japan instead of using an automated gate, because shop staff will need to check it to ensure your temporary visitor status.)

The tax refund process is more common at department stores, where you can shop from multiple departments and brands with separate registers. In this case, you initially pay the full price including tax on each purchase, before bringing all of your receipts to the facility’s tax refund counter, where they do exactly what you might expect – check your passport, add up all of your purchases, calculate the tax, and then issue a refund for the total.

Bringing Your Purchases Home

Once you’ve made your purchase, some shops may put your items into a sealed plastic bag labeled “tax-free,” to ensure that you don’t use or consume the items inside while you’re still in Japan. You’ll want to keep all the products inside those bags until you’ve left Japan, and you generally need to keep track of all tax-free purchases, bagged or not. The law requires you to bring your tax-free purchases with you when you leave, and technically you’re supposed to let airline staff know if you have tax-free items in your suitcase when you check your bags, because Japanese customs officials are within their purview to check your bags and verify that no tax-free items have been consumed or left in Japan. These checks, however, are somewhat uncommon for everyday shoppers, and generally reserved for travelers who have purchased high-priced items in Japan. If you’re planning to fill your suitcase with designer bags or luxury watches, stay organized and try to keep your purchases easily accessible. If you’re just bringing home some Japanese snacks and cosmetics, follow the law and be aware that your tax-free purchases might be checked, but don’t worry about it too much – the normal passport scan when you pass through customs is usually enough.

Make the Most of Tax-Free Shopping in Japan!

It doesn’t take much effort to shop tax-free in Japan, and since foreign travelers in Japan are legally obligated to keep their passports with them at all times anyway, there should be nothing standing in the way of you paying tax-free prices and saving lots of money in Japan!

If you want an even better deal, check out these Japankuru coupons that can be combined with the tax-free discount:

・Tax-free prices plus an extra 5% off on Japanese glasses at JINS.
・Tax-free prices plus an extra 3~7% off on electronics, cameras, watches, toys, cosmetics, food, and much more at KOJIMA x BicCamera.
・Tax-free prices plus an extra 5% off on Japanese kitchen knives at Musashi Japan.

For more info and updates from Japan, check Japankuru for new articles, and don’t forget to follow us on X (Twitter), Instagram, and Facebook!