Tokyo, Nov. 10 (Jiji Press)–Starting this month, Japan has switched over to a new post-departure refund system for consumption tax for travelers from abroad, in response to the reselling of tax-free goods at tax-included prices within the country. Such reselling has been an issue in Japan because consumption tax is exempt only for items intended for use outside of Japan after staying in the country for less than six months. Under the previous system, retailers verified travelers’ length of stay using passports and other documents, and sold items to them at tax-excluded prices. Recently, the Osaka Regional Taxation Bureau imposed additional taxes of some 760 million yen on seven Chinese nationals believed to have illicitly purchased 7.7 billion yen’s worth of bags, wristwatches, cosmetics and other products at department stores under the direction of resellers. However, little of the back taxes were paid because the seven had already left Japan. Meanwhile, the Tokyo Regional Taxation Bureau imposed additional taxes of 110 million yen on department store operators Sogo & Seibu Co., Odakyu Department Store Co. and Matsuya Co. for selling items to foreign nationals who did not meet tax-free requirements. Under the new system, retailers sell tax-free products at tax-included prices and send purchase records to a National Tax Agency system. Buyers can receive tax refunds by presenting their passports when leaving Japan. If they do not carry the products, they could be denied refunds. Tadashi Saito, who is in charge of tax-free sales operations at Daimaru Matsuzakaya Department Stores Co.’s Daimaru Tokyo department store, welcomed the new system, saying, “We no longer need to use special packaging to prevent reselling, or explain to customers that they must not open tax-free products while in Japan.” According to a senior national tax official, store operators were committed to preventing resales, but store staff sometimes sold products to increase sales, even in cases suspected of reselling. The official stressed that stores can now sell tax-free products “freely” without refraining from selling them in cases suspected of reselling. “We’ll inform foreign visitors” about the new system, the official added. END [Copyright The Jiji Press, Ltd.]
