Guide To Tax Refund In Japan
What is Shōhizei?Shōhizei means consumption tax in Japanese. It’s tax on Goods and Service just like VAT in Europe and GST in Singapore. The consumption tax is now set at 8%.
Who are eligible for Tax Refund?Foreigners with permanent resident outside Japan, basically tourist. Your stay in Japan needs to be less than 6 months in order to be qualified. You can also apply for Tax Refund if you’re a Japanese citizen but living abroad for more than 2 years. “Japan has one of the best Tax Refund systems in the world. To get your Tax Refund, you don’t need to get custom stamps”
Minimum purchaseYou need spend minimum ¥5401 JPY (consumption tax inclusive) in order to be eligible for Tax Refund. “You can get cash refund directly or instant from tax refund service counters at the shopping malls, shopping centers or at the stores.”
How to claim your Tax Refund?There are two ways to get your Tax Refund.
- Some stores do their own tax refund. If this is the case, then you will get your tax refund immediately. Proceed to 1. for details.
- When a store do not do their own tax refund, you need to apply tax refund at the Tax Refund Service Counters. Proceed to 2 for details.
1. When a store do their own tax refund.The easiest way to get your tax refund back is to buy at a store that process their own tax refund. Usually these stores have a different price tag – it shows ‘Price + Tax’. When a store do their own tax refund, you don’t need to go to the Tax Refund Service Counter, which will save you a lot of time. Now, here’s what you can expect:
1a. First check the store whether they participate to the tax refund programYou can either look for the ‘Tax Free’ sign at the storefront or ask the staff directly.
1b. At the check-out: show your passportTell the staff you are excempt from consumption tax because you’re a tourist. They will ask you for your passport for verification.
1c. The Tax Refund FormEven tough the store does their own tax refund, you still need to fill in the Tax Refund Form. After the passport verification, the staff will hand you a Tax Refund Form, fill in the necessary information. If you need help, ask the staff for assistance.
1d. Pay the goods without taxWhen everything is done, you can now pay for your goods without the consumption tax.
1e. At the airport: the customsWhen you’re at the airport, check-in the sealed goods at the customs. Also hand over the Tax Refund Forms to the staff. The customs will inspect both.
2. When a store do NOT do their own tax refundWhen store do not do their own tax refund, there is an extra step to get your money back. Read the details below:
2a. At the store: do they participate to tax refund program?Not every store participates the tax refund program, so look for the ‘Tax-Free’ sign or even better – ask the staff. “When the goods are labeled with the pricetag: ‘price inclusive tax’, this means that you need to pay with tax at the check-out and you need to claim your tax back via the Tax Refund Service Counter.”
2b. Your passport please!At the check-out, inform the staff about your tax refund claim. You will be asked to show your passport to verify that you’re a tourist.
2c. The Covenant of Purchase of Consumption Tax Exempt of Ultimate Export Form aka Tax Refund FormYes, it’s a very long name. But it basically means Tax Refund Form. After the passport check, the staff will give you a Tax Refund Form. Fill this form in, if you have questions, go ahead and ask the staff. IMPORTANT NOTICE: The Tax Refund Form is only valid on the day of purchase, so make sure you get your tax refund processed immediately.
2d. Don’t forget your receiptsMake sure you’ve got all the documents before leaving the store. Save the Tax Refund Form and receipts in a safe space. Also double check the receipts, because handwritten receipts are not accepted for tax refund. “Handwritten receipts cannot claim tax refund.”
2e. Find the nearest Tax Refund Service CounterThe Tax Refund Service Counters are usually located in the mall or at the airports. Ask the staff for directions. Now, make sure you’ve got the following documents for processing the tax refund:
- The purchased goods
- Your passport
- Receipts (handwritten receipt will not be accepted)
- Completed Tax Fefund Forms
- The credit card that you’ve used to purchase the goods (if you’ve paid in cash, then you can ignore this step)
2f. Collect the money and Tax Refund PapersYou get your tax refund back in cash. The return is always lower than the 8% consumption tax because a fee will be deducted from your tax refund for processing the application. In some stores, the fee can be as much as 1.1%. The Tax Refund Counter Staff will also give you the Tax Refund Papers back in your passport.
2g. The purchased goods will be sealed in bagsYour purchased goods will be sealed in bags and you cannot open them.
2h. At the airport: leaving JapanWhen you’re going to leave Japan, you can pack your purchased goods (sealed) in your checked-in bags and check them in at the customs. You also need to hand over the Tax Refund Papers to the staff at the airport customs counter. Both need to be inspected.
Tax refund overview in Japan
|Value||Tax Refund in ¥||Tax Refund in %|
|¥50.000 JPY||¥3.704 JPY||7.41%|
|¥100.000 JPY||¥7.407 JPY||7.41%|
|¥200.000 JPY||¥14.815 JPY||7.41%|
|¥400.000 JPY||¥29.630 JPY||7.41%|
|¥600.000 JPY||¥44.444 JPY||7.41%|
|¥800.000 JPY||¥59.259 JPY||7.41%|
|¥1.000.000 JPY||¥74.074 JPY||7.41%|
|¥1.200.000 JPY||¥88.889 JPY||7.41%|
|¥1.400.000 JPY||¥103.704 JPY||7.41%|
|¥1.600.000 JPY||¥118.519 JPY||7.41%|
|¥1.800.000 JPY||¥133.333 JPY||7.41%|
|¥2.000.000 JPY||¥148.148 JPY||7.41%|