Japan’s consumption tax and how to spend less money on it
Dec 12, 2024
Japan’s consumption tax and how to spend less money on it
If you’ve been to Japan before, you must have known about Japan’s consumption tax, haven’t you?
Also called shouhizei (消費税) in Japanese, consumption tax is basically the same as the Value Added Tax (VAT) applied in many other countries, and the consumption tax in Japan applies to all commercial, food, and service products.
The current consumption tax rate is 10%, and there are various stores in Japan offering tax-free shopping to foreign travellers. If you’re interested in knowing more about tax-free shopping, please refer to this page.
Index
1. How to spend less money on tax consumption
You can spend less money on consumption tax by taking advantage of the tax reduction system, which is implemented by the government for certain items. This tax reduction system allows you to buy these products by only paying an 8% tax rate for items limited to:
- Some types of food products, drinks, and daily supplies.
- You can enjoy the tax reductions only when you do “grab and go” when ordering food in a restaurant.
So the consumption tax rate changes depending on what you buy and how you consume them.
2. Example of tax reductions
Here are some examples of tax reductions you can enjoy when you’re in Japan:
- Hamburgers, onigiri, and other fast foods: 10% if you eat in the restaurant, 8% if you take them home.
- Food purchased at convenience stores, bento shops, and supermarkets: 10% if you eat in the store, and 8% if you take them home.
- Coffee purchased at coffee shops: 10% if you drink in the store, and 8% if you take them home.
- Food stalls or street vendors that have no seats: 8%
- Stores at food courts: 10%
- Online food delivery: 8%
3. Tax-free shopping
The other way to enjoy the tax reduction is by doing tax-free shopping when you’re in Japan.
If you fall under the conditions below, you are eligible for tax-free shopping in Japan.
- The length of stay of your visa must be less than six months, and Japanese nationals living abroad are eligible for tax-free shopping too.
- Your total purchase must be more than 5,000 yen in total
The downside of tax-free shopping is, you can avoid the consumption tax itself, but since it’s a tax-free shopping, you cannot consume, or use the products when you’re in Japan as all products must be sealed all the time until you arrive home.
For detailed information about tax-free shopping, please refer Here.
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