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TAX
Updated on Apr 25th, 2024
Key Takeaways
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The Consumption Tax is 10%. However 1) food and drink excluding alcohol and eating out, 2) newspaper are 8%.
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Digital Nomads can also use Duty Free and Tax Free.
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Digital Nomads do not need to pay either Income Tax or Residence Tax in various conditions are met.
Japan's main TAX systems DN should know
Consumption Tax
Consumption tax in Japan is 10% (raised from 8% to 10% in Oct ’19). Digital nomads from overseas are also required to pay consumption tax, with the exception of the tax-free products described later. However, the following two categories are subject to reduced tax, and consumption tax is 8%.
Food and drink excluding alcohol and eating out :
Food and drink items such as meat, vegetables, fish, water, and milk purchased at supermarkets and convenience stores are 8%. However, alcohol is excluded. Also, since eating out at restaurants and cafes is not eligible, it's 10%. For example, at Starbucks, “For here” is 10% and “To go” is 8%, even for the same product!
Newspaper :
I don't think there are almost any DNs that subscribe to paper newspapers in Japan, but the consumption tax on paper newspapers with subscriptions that are published twice or more per week is 8%.
referenced from :
Official announcement from the National Tax Agency
Tax Free
Duty Free
&
Tax Free
Duty Free
Tax Free
Multiple Taxes
（consumption tax, customs duty, alcohol tax, tobacco tax, etc.）
Taxes that are exempt
Consumption tax only
People leaving Japan
Who is eligible?
Non-residents of Japan
- The passport has a stamp showing the date of entry (do not use an automatic airport gate!)
- Less than 6 months after entering Japan
- Working overseas
Yes
Is DN eligible?
Yes, if the above conditions are met
Something big enough to carry on a plane (cosmetics, watches, cigarettes, etc.)
Tax free products
General goods
(home appliances, bags, clothes, etc.)
Consumables
(food, fruits, cosmetics, etc.)
Unlimited
Maximum amount
-The purchase price of general goods at the same store per day is 5,000 yen or more
- Consumables are purchased at the same store for at least 5,000 yen a day and less than 500,000 yen
- The total purchase price of general goods and consumables at the same store per day is 5,000 yen or more and 500,000 yen or less
Airports
Where to purchase
Shops in the city
None
Purchase procedure
2 patterns depending on the store
a.) Present your passport at the time of purchase and pay the amount after deducting consumption tax from the beginning
b.)Purchase an item including consumption tax, visit the designated tax exemption procedure batch counter on the same day, present the purchase item, receipt, and passport, and get a refund
Income Tax
&
Residence Tax
Digital Nomads DO NOT need to pay income either income tax or residence tax in Japan if you meet all of the conditions in the table below. However, these are just general guidelines, so we recommend getting expert advice.
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Staying in Japan for less than a year
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having a residence overseas (don't have a residence in Japan)
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No salary income based on working in Japan
referenced from :
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