Japan plans to refund consumption Tax to Foreign visitors upon departure

In a bid to prevent the resale of duty-free items within the country, the Japanese government has revealed its intention to shift the current consumption tax exemption system for foreign visitors to a refund model upon departure.

Currently, when foreign visitors make purchases at duty-free stores, the consumption tax is exempted on the spot, and the bought items are not allowed to be resold or consumed within the country.

However, according to government sources, last year, there were 374 individuals who purchased duty-free items amounting to over 100 million yen, and there is a possibility that many of them might have been reselling the products domestically.

To close this loophole, the government plans to implement a system where items are initially taxed at duty-free stores and then refunded upon departure from Japan.

This refund system is already in place in many countries, and Japan aims to confirm this direction at this year's Tax Commission meeting, with the goal of implementing it in the fiscal year starting two years from now.

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