In Japan tax exemption takes place right at the place of purchase rather than at a special tax refund counter at the airport. The number of shops where tax-free shopping is possible is limited. They need to hold a government-issued license for tax-free shopping. If in doubt, please check with a store clerk before your purchase.
WHERE TO SHOP DUTY FREE
Typically it is only shops at international airports, for example at Kansai International Airport, large department stores and large electronics retailers that offer such a service. The majority of small shops do not offer tax-free shopping. Outside urban areas, tax-free shopping is close to impossible. In Osaka, being Japan's second largest city, you will find tax-free shopping opportunities in the city's main shopping areas, including Nipponbashi (Den Den Town - Osaka's electronic town), Shinsaibashi or Umeda (Osaka Station).
HOW MUCH YOU GET BACK
By governmental rule, the shops that offer tax exemption should be clearly marked on the storefront or at the shop entrance with the sign "duty free" or "tax free". As of April 2014, the consumption tax in Japan will be raised from 5% to 8%. Therefore, for example, if you buy an electronics item for 100,000 yen, you will get 8,000 yen off your purchase. In most cases, the prices of merchandise, as stated on the label, include the 8% consumption tax. You need to purchase an item worth at least 10,001 yen. If you buy several items, the total amount should at least be 10,001 yen to be eligible for a tax refund. Be aware that a handling charge might apply for tax refunds.
HOW TO CLAIM
Generally, there are two possible ways to claim tax exemption at stores that offer tax-free shopping and it depends on the store's policy what method is being used. At the time of purchase, at the cashier, 8% are deducted for each item, provided that the total purchase is more than 10,001 yen. You purchase your items at the cashier, again at a total amount of 10,001 yen or more, and then take your receipts to a special counter, typically called "tax exemption counter", which might be on a different floor in the store. In this case, you will receive the tax refund in form of cash.
In both cases, a tax exemption procedure needs to be followed. It involves checking your passport and visa, as well as filling out a form called "Covenant of Purchase of consumption tax exempt of ultimate export". The store's staff will help you filling out the form. Typically, information required includes your name, address, port of entry/departure and passport and visa details.
Once the tax-refund procedure is completed, this form, which states that you did a tax-free purchase and the purchased item will only be used outside of Japan, will be attached to your passport. At Customs at the airport, the tax-free purchased item will be checked and the form will be collected by the clerk. So, please keep both ready for inspection.
The person who makes a purchase needs to show her/his passport in person. Copies of the passport or any other ID are not allowed. If payment is done by credit card, only the purchaser's own credit card is accepted. The name in the passport and on the credit card must be the same. Tax refunds at a "tax refund counter" are only done on the day of the purchase during store hours.
OSAKA DUTY FREE SHOPPING
Tokyu Hands, a variety goods retailer, offers tax-free shopping at their Osaka stores in Umeda, Shinsaibashi and Sannomiya. Other stores offering tax-free shopping include Hankyu Umeda Main Store (a large department store) and electronics retailers BIG CAMERA and Yodobashi Camera. While large department stores and electronics retailers usually occupy several floors in large buildings, note that not all items on all floors are eligible for tax-free shopping.
There are also restrictions on certain types of items, which usually include all goods that can be consumed (food, beverages) or goods whose lifespan is short (batteries, stationery). Cosmetics and pharmaceutical goods cannot be purchased tax-free. However, at the Duty Free Shop at Kansai International Airport you will be able to buy tobacco, liquor, fragrances, cosmetics, jewelry and fashion items. All tax exemption only applies to items that are bought for personal use. It does not apply to goods purchased for commercial use.
Some stores offer further discounts if you conduct tax-free shopping by credit card. Please check for any campaigns with store staff.