*Please note that the information below is accurate as of the date of the post and includes opinions and observations based on first-hand experience as of December 2015.
If you’re in Japan or planning to visit there, there is a wonderful program for temporary visitors called Japan Tax-Free that will save you the VAT/sales tax at many popular retailers.
The biggest confusion and questions seem to arise from the exit (leaving Japan) procedure of the Japan Tax-Free program so I will start with this first. If the below doesn’t make sense, it will as you read further.
When Leaving Japan
Simply put, there really isn’t any clear procedure that exists when exiting Japan and claiming your Japan Tax-Free purchases. Like all flights, check your bags at the check-in counter and head through security. After security, everyone (regardless of nationality) has to go through the exit immigration counter. There is supposed to be a customs counter in the same area where the Japan Tax-Free documents are supposed to be collected and confirmed, BUT from personal experience and through assertions from others, the customs counter isn’t easy to find (or doesn’t exist at all depending on your exit airport). So naturally you continue through to the immigration counter where the immigration officers barely look at the documents, let alone remove them. So if you’re worried or confused as to whether you have to have all the items you purchased with you as you go through exit customs, the answer is no*.
*For full disclosure purposes, the customs/immigration officers are within their rights to check you purchases, but there doesn’t seem to be any clear documentation of anybody actually having a difficult time with this.
Here is another reason this procedure doensn’t make sense. All airlines limit the amount of bags/items you can carry on with you. Yet, according to the rules you are supposed to have all the good with you if you were to get inspected. BUT because you have to check your bags before getting access to the customs counter, there is almost no way to have all your purchases with you if you were to get inspected. As mentioned, there doesn’t seem to be a clear procedure…
You are eligible to save the tax (and possibly more) at all Japan Tax-Free registered retailers. Be sure to look for the Japan Tax-Free logo or ask someone before loading up your shopping cart. Most retailers in popular areas (e.g. Shibuya, Shinjuku, etc.) are Japan Tax-Free registered and are easy to find.
Who is eligible?
Everyone with a foreign passport that is staying less than 6-months in Japan that are not employed during their visit.
What products are included in Japan Tax-Free?
Consumables (foods, drinks, medicines, cosmetics, etc.) must be purchased at the same store on the same day and the total spending must be 5,001JPY or more but no greater than 500,000JPY.
General goods (electric appliances,clothing,accessories,etc.) EXCEPT FOR consumables are exempt from sales tax if purchased at the same store on the same day and the total spending must be 10,001JPY or more.
So how does Japan Tax-Free work?
Simply show your passport at the register. The clerk with take your passport info and get you to sign a declaration form stating that you will be leaving the country with the goods. They will then staple the receipt and copy of the form to your passport, which must be provided to the customs officer at the airport who will confirm that you are in fact leaving with the purchased goods (and not purchasing it for someone in Japan for the purpose of tax avoidance).
The exit part gets a little murky (see When Leaving Japan part of this post).
How much do you save?
Currently, until April 2017, the sales tax is 8% on most goods. After April 2017, the sales tax will increase to 10%. With Japan Tax-Free you save the full amount of the tax.
Some retailers, such as Loft and Tokyu Hands, offer additional discounts for foreign passport holders. This discount is taken off at the register and is separate from Japan Tax-Free and does not need to be claimed.