Search This Blog & Get A Rife

Thursday, October 2, 2014

Foreigners Get Tax-Exempt Shopping In Japan

Visiting Japan? Good news, you can get tax-free shopping!

Granted this is only at 153 stores belonging to Ito-Yokado (株式会社イトーヨーカ堂 Kabushiki-gaisha Itō Yōkadō), but it's an interesting attempt to drum up some business.

Ito-Yokado is part of the Tokyo-headquartered Seven I Holdings Co. (株式会社セブンアイ・ホールディングス Kabushiki-gaisha Sebun ando Ai Hōrudingusu), and is currently the fifth-largest retailer in the world, with 35,000 stores in approximately 100 countries (Number 1 - Walmart).

If that Seven I logo looks familiar, it's because it also owns 7-Eleven, and other properties.

Even still, these 153 general-merchandise stores are still only 80per cent of Ito-Yokado's whole Japanese shops, but it is keeping in line with what the Japanese government will be doing this October—foreign travelers can get tax-free food and alcohol!

Yes... if you can prove you are a tourist by providing a foreign passport, you too can get tax-free shopping done for yourself and all your Japanese friends. Just be sure to ask for a small buyer's fee.

Hey... perhaps this is also a way to separate the wheat from the chaff, but the Ito-Yokado shops will each have separate check-out counters that will be set-up just for such tax-free encounters.

No longer will you have to stand in line with annoying Japanese. And hey - Japanese people, no longer will you have to stand in line with foreigners jabbering away in their idiotic foreign language. Everybody wins! 

The Tax-exempt shopping for those carrying foreign passports, has to date been mostly limited to department stores and home electronics retailers—I hope you all knew that!

But a recent amendment to this has expanded the policy to also include food, alcohol and other daily items... which means lots of places will soon have special tax-free check-out lines, or perhaps more realistically, they can teach the cashier how to hit a button to cancel the applicable non-taxes.

So... how does it all work?

All you, the tourist have to do is FIRST pay for your items at a regular cashier counter - boo! so there is no separation! and then, after that is done, you sheeple can then move along to a special Tax-Exempt counter—where the stores will hopefully have it marked in a few languages other than Japanese.

At this second counter, you will be asked - politely, I am sure - to show the items you have purchased, and then show them your passport.

The cashier will then ensure that all your products conform to the tax-exemption and will then REFUND the so-called consumption tax portion of the purchase price.

I assume that the money will go directly back into your bank account or credit card, and that the issuing banks will NOT be making extra money on yet another transaction on your bank account.

Hmm... if possible, try and get a bank account that only charges a set monthly fee for bankcard transactions... or maybe just always ensure you have cash.

Did I forget anything else? Oh yeah... the tax exemption is only valid on purchases totaling ¥10,000 (about US $100)... but at least you can add up your purchases of say one small steak of ¥9000 and one DVD purchase of ¥1500 for a total of ¥10,500 - and now you are eligible to get the tax back.

What else did I forget? Oh yeah - the tax exemption is based on the Japan Consumption Tax, which is 8 per cent.

Of course, Japan has two ways of calculating this tax for your tax exemption whereby:
  • It can deduct 8% at the time of purchase (for each one product equaling ¥10,001 or higher);
  • after purchasing, take all the receipts to the tax exemption counter, complete the exemption procedure, receive the taxed portion in cash, and use the receipt as the tax exempt amount.
Most department stores use the second one...

To help you out, participating shops will issue in-store pamphlets written in both English and Chinese just how the tax-exempt service works.

Save a tree... I just did that for you. Now go buy a paper book or a magazine—poor tree is already dead anyway - make its life worth something.

Shop till you're broke,
Andrew Joseph

1 comment:

  1. Great information on your site here. I love this post because we can get some useful information from your blog. I expect more post from you guys.

    Pic Grant Consultants