Japan Shifts to Refund-Based Tax-Free Shopping Starting November

Starting November 1, 2026, Japan is fundamentally changing its tax-free shopping system for inbound travellers. Currently, eligible visitors can purchase goods tax-free at the point of sale by presenting their passport at designated stores. Under the new system, this immediate discount will be eliminated. Instead, visitors will be required to pay the full tax-inclusive price—which includes the 10% consumption tax—at the time of purchase. To recover this amount, travellers must apply for a refund at the airport upon their departure from Japan.

This shift is designed to streamline tax administration and prevent potential abuse of the current system. By moving the refund process to the point of departure, authorities can better verify the export of goods and ensure compliance with tax regulations. While the government has not yet detailed the exact digital infrastructure for these airport refunds, the change represents a significant departure from the convenience travellers have enjoyed for years. The threshold for tax-free eligibility remains at JPY 5,000 or more, but the logistical process for claiming these savings will become more time-consuming.

All international visitors to Japan who intend to make tax-free purchases are affected by this change. This includes tourists, business travellers, and anyone currently eligible for consumption tax exemptions on general goods or consumables.

Makutet anticipates that this change will lead to a temporary decline in retail spending by tourists during the initial implementation phase due to the added friction. We expect the Japanese government to eventually introduce a mobile-based digital refund system to mitigate airport congestion, but until then, travellers should prepare for significant delays at departure terminals.