Since it seems that there are rampant cases of fraudulent use of the consumption tax exemption system for foreign visitors to Japan to profit from resale, the government and the ruling party are considering reviewing the tax exemption system. We are aiming to switch to a system in which consumption tax is paid once when a product is purchased, and then refunded when leaving the country.
Foreigners visiting Japan or Japan residents overseas who meet certain conditions are eligible for a tax exemption system that allows them to purchase at duty-free shops in Japan for an amount excluding consumption tax.
At that time, the duty-free shop must ask for a passport or status of residence to confirm that the buyer does not reside in Japan and that the purchase is not fraudulent for the purpose of resale.
However, in the past, there have been cases where major department stores and mobile phone retailers have been subject to large additional taxes due to inadequate verification procedures.
In the background, it seems that there are rampant cases of misappropriation of products to domestic resale vendors and illegally obtaining profits, and the government and the ruling parties are considering reviewing the tax exemption system.
Specifically, we are aiming to switch to a system in which the amount including consumption tax is paid at the time of purchase, and the consumption tax is refunded after confirming the purchased product at the time of departure procedures.
The government and the ruling parties will include a policy for consideration in the tax reform outline for the next fiscal year, and will discuss the specific timing of implementation again because it will take time to update the system at duty-free shops.