The Current System: What to Expect Now
If you are travelling to Japan in the near future, you will still use the long-standing tax-refund process. At participating tax-free shops, you must present your physical passport at the time of purchase. The minimum spend is typically ¥5,000 before
tax in a single store on the same day. For most shoppers, the store will deduct the 10% consumption tax directly at the register, meaning you pay the lower, tax-free price on the spot. In some cases, particularly at large department stores, you might pay the full price and then visit a dedicated tax-refund counter within the store to receive your refund in cash or back on your card. For consumable goods like cosmetics and food, the items will be sealed in a special bag that you are not supposed to open until you have left Japan. Your purchase information is recorded, often with receipts stapled into your passport, and electronically linked for customs to check upon your departure.
The Future System: Pay First, Refund Later
The upcoming change represents a fundamental shift in how tax-free shopping will work. Japan is moving to a “pay first, refund later” model, which is common in many European countries. Under this new system, tourists will pay the full price, including the 10% consumption tax, at the register. All purchase data will be digitally linked to your passport. Upon departure from Japan, you will need to complete a procedure at the airport or port to claim your refund. This will likely be done at self-service kiosks where you scan your passport to verify your identity and the list of purchases you are taking out of the country. After customs confirms the goods are being exported, the refund will be processed to your credit card or through other digital payment methods.
The All-Important Timeline: When Does This Change Happen?
This is the most critical piece of information for travellers: the new system is not active yet. Multiple official sources confirm the nationwide switch to the new “pay first, refund later” method will take effect on November 1, 2026. This means any tax-free purchases made up to and including October 31, 2026, will fall under the current, instant-discount system. Purchases made from November 1, 2026, onwards will use the new refund process. There will be no overlap or transition period; it is a hard switch. So, for anyone with travel plans for July, August, or any time before November 2026, nothing has changed. You will follow the familiar, existing procedure.
Why Japan Is Making the Switch
The Japanese government is implementing this change for two main reasons: efficiency and preventing misuse. The new digital process is designed to be more streamlined and transparent, reducing the need for paper receipts stapled into passports and manual checks. More importantly, it aims to close a loophole where tax-free goods were being illegally resold within Japan for a profit. By requiring tourists to pay the tax upfront and only issuing a refund once it's confirmed the goods are leaving the country, authorities can better ensure the system is used as intended—for items enjoyed outside of Japan.
Benefits of the New System
While the idea of paying upfront may seem like a drawback, the new system will come with some significant benefits for tourists. The requirement for special sealed packaging for consumables like snacks and cosmetics will be eliminated. Furthermore, the current purchase limit of ¥500,000 per day for consumables will also be abolished. This will allow for a more flexible and convenient shopping experience, as you'll be able to use your purchased items freely and won't have to worry about hitting a spending cap or keeping everything sealed in separate bags.
