Tax-Free Shopping Ends: What to Know When You Visit Japan

When you visit Japan, you’ll probably buy and bring back lots of souvenirs. As of July 2025, most tourists can purchase without paying the consumption tax. However, that experience will end on November 1, 2026, when the system will switch to a refund-based system.

Today, we’ll discuss the reasons behind this change, the new procedures, and some reactions to this announcement. Here is what you need to know about the future of tax-free shopping in Japan. 

What is tax-free shopping when you visit Japan?

First, let’s explain what kind of tax is being taken off. International tourists must pay a 10% consumption tax on items bought in Japan. That amount gets reduced to an 8% tax on food and drinks, excluding alcohol and eating out. However, they can waive that amount if they spend 5,000-500,000 JPY ($34-$3400 USD). It’s different from duty-free shopping, where designated stores at international airports sell items by removing customs, consumption, liquor, and other taxes. 

Tax-free shops are at international airports, large department stores, malls, and other retailers. Tax-free coupons are also available online for certain stores like Keio and Kintetsu, along with additional discounts of 5-15%. Remember that foreigners working in Japan, visitors who have been in the country for more than six months, and travelers who don’t have an entry stamp on their passports don’t qualify for this service. 

How is it going to change?

As of this writing, travelers from outside of Japan still get the consumption tax waived. But come November 1, 2026, they must pay the full amount for their purchases, including the tax. Once they’ve finished at the checkout, tourists will submit their receipts to customs for their tax refund, which must be claimed within 90 days of purchase. Shoppers will also scan their passports at departure to verify they are leaving the country with these items. 

If you’re concerned that these changes will make shopping in Japan more difficult, don’t worry. The country will remove the new system’s maximum and minimum spending thresholds. There will no longer be a distinction made between “consumables” (food and medicine) and “general” goods (clothing, merch, and other items). Finally, these items won’t need specific packaging like they currently do to meet tax-free requirements. 

Are you looking for amazing snacks to enjoy this summer, even if you can’t visit Japan? Check out TokyoTreat! TokyoTreat delivers the latest Japanese snacks, sweets, drinks, candy, and noodles from Japan directly to your door!

Why is Japan ending tax-free shopping for tourists?

The biggest reason for ending these services is to prevent cases of fraud, which have increased over the years. Some visitors buy tons of items in Japan without paying taxes and then return home, leaving them behind. Even worse, other shoppers have been reselling their purchases in their home country at marked-up prices. These crimes will be more complex to commit with the new refund-based method and increased screening. 

Scrapping tax-free shopping would also make things fair for domestic shoppers. Some government officials believe that giving a tax exemption to international visitors is unreasonable when the cost of living is rising for locals. This latest announcement is just one of several recent changes the country is implementing, including the upcoming upgrade to JESTA, aimed at dealing with overtourism and criminal behavior from tourists. 

How have people reacted to this announcement?

The announcement has caused mixed reactions. On the one hand, removing tax-free shopping would add much-needed revenue back to the Japanese economy. It would also ease the financial strain for smaller shopkeepers, particularly with costs rising and the yen weakening due to tensions over the United States’ tariffs. Meanwhile, visitors who find the current system’s requirements cumbersome welcome the more streamlined process.

However, there are also worries that fewer travellers will come to Japan because they must pay the full amount. Or if people do decide to travel, especially from places where everyday items are getting more expensive, they might cut back on their spending. Less traffic will lead to a drop in sales for luxury retailers and family-owned businesses. Ultimately, these changes would create the same financial difficulties they are supposed to prevent. 

Should Japan get rid of tax-free shopping?

When I visited Japan in 2023, I was surprised and delighted by the tax-free options, especially since my home country’s cost of living has significantly increased. If I were to visit again, I’d spend less, and I can see why travelers would be disheartened.

However, given overtourism, the weak yen, and the fraud cases, I understand why Japan is making this move. Some middle ground, like a maximum threshold of 250,000 JPY ($1700 USD), could be found. Since tourism is heavily intertwined with the economy, locals and tourists must work together for the common good.

Many people visit Japan from abroad because of its tax-free shopping. However, this system has been subject to abuse, straining local businesses. To combat this problem, the country will switch to a refund-based system in November 2026.

While detractors worry that visitors will be less inclined to spend due to paying the full amount, supporters hope the move will help ease the government’s financial woes. We encourage current travelers to take advantage of the old system before the changes occur. What do you think of this announcement? Share your opinions in the comments.