On October 22, the National Duty-Free Shop Association held a media briefing regarding the transition to the new “refund system” for foreign visitors to Japan. Speakers, including the association’s chairman, Masanori Akita, as well as representatives from co-hosting organizations and relevant government agencies, took the stage to explain the system’s impact on airports and seaports as well as duty-free shops, the use of digital technology, and the ripple effects on regional areas.
The refund system is a mechanism whereby visitors to Japan purchase goods at prices that include consumption tax—rather than at tax-free prices—and receive a refund equal to the tax amount upon departure. It is designed to prevent the illegal resale of tax-free goods while reducing the administrative burden on retailers. As part of tax reforms, the Ministry of Finance’s Customs and Tariff Bureau, the National Tax Agency, the Japan Tourism Agency, and the Digital Agency are collaborating on this initiative, which will take effect on November 1.
Under the previous system, consumption tax was exempted at the time of purchase, which led to serious problems involving the resale or diversion of tax-exempt goods within Japan. In contrast, under the refund system, travelers first purchase goods at the store at the price including tax, and then, after having the goods verified for export at customs at an airport or seaport upon departure, they receive a refund equivalent to the amount of consumption tax.
The system requires customs clearance for export within 90 days of purchase, and since tax-free status is only granted once the goods are actually taken out of the country, it is expected to directly prevent fraudulent resale.
Furthermore, in light of the widespread fraudulent use of the “separate shipment” method—in which duty-free goods are sent overseas from locations such as post offices—the government has moved to abolish the duty-free treatment for such shipments effective April 1, 2025. However, the “direct shipment system,” in which duty-free goods are shipped directly overseas from duty-free shops, will continue to be maintained.
By consolidating the verification of goods taken out of the country at customs upon departure, retailers will no longer have to perform the packaging tasks specific to duty-free goods—which had previously been a burden—and the requirement to determine at the time of sale whether items are “intended for everyday use” will also be eliminated. As a result, checkout and other procedures at the store will be significantly streamlined, which is expected to alleviate congestion at the registers and facilitate smoother store operations. For visitors to Japan as well, procedures will become smoother, leading to improved convenience.
In addition, the Digital Agency’s immigration web service, “Visit Japan Web,” is being utilized. While it has long been possible to use the QR code generated via Visit Japan Web at the time of purchase in place of a passport, in conjunction with the introduction of this refund system, the international departure lounges at select high-traffic airports (Narita, Haneda, Kansai, Chubu, Fukuoka, New Chitose, and Naha), the international departure areas have been upgraded so that, instead of using duty-free checkout terminals for customs verification upon departure, travelers can now complete the process online using Visit Japan Web on their own smartphones or other devices.
In addition to strengthening border controls to prevent illegal resale, the scope for outsourcing duty-free sales procedures is expected to expand through the use of digital technologies and the reduction of the burden on stores. This is expected to resolve issues such as labor shortages and language barriers, and is also expected to boost duty-free consumption in rural areas.
© Source travel watch