When speaking of Duty-free shops in Japan, there is the concept of “Duty-free” and “Tax-free.” The company engages in the “Tax-free” business.
|How to Engage in Business||Obtain permission from the tax chief having jurisdiction over the taxpayer for each store||Obtain permission of bonded area as a bonded warehouse under the Customs Act|
|Qualified Purchasers||Non-residents||Departing persons (Japanese, foreigners)|
|Exempt Categories||Consumption tax (value-added tax)||Exemption of various taxes, in addition to consumption tax (value-added tax)|
|Subject Articles||Articles supplied for daily life (general articles, consumables)||Goods, cigarettes, alcohol, and other products imposed with duty|
|Delivery of Goods||Receipt of goods is available when purchasing at stores||Receipts are available at the delivery place for Duty-free products at airports or ports, after going through the departure process|
|Number of Stores||44,646 (as of April 2018)||43（as of July 2017 ）|
|Type of Store||Detailed Example||Exemption Categories|
|Customs||Liquor Tax||Cigarette Tax|
|Market tax exemption stores, such as drug stores||Yes||No||No||No|
|Duty-free||Airport Duty-free Shop||Yes||Yes||Yes||Yes|
|City Duty-free Shop||Yes||Yes||Yes||Yes|
Goods provided for use in daily life (general goods, consumables)
Goods that have been explicitly purchased for business or for sale by a non-resident are not exempted from tax.
Source:Drafted by this company based on the website of Japan Tourism Agency (https://www.mlit.go.jp/kankocho/tax-free/about.html)
(FN1) Source: Website of Japan Tourism Agency（ http://www.mlit.go.jp/kankocho/news01_000260.html ）
(FN2) Only goods supplied for daily use are exempt, thus, purchasing for business or for sale do not qualify for exemption.