[The Definitive Guide] 2028: The End of the “Tax Haven” for Cross-Border E-Commerce.
For those following trends in cross-border E-Commerce (EC) and the digital economy, we present the full picture of the “Two Major Reforms” set to fundamentally overturn our shopping habits and business models over the next few years.
Until now, it was a hidden common sense of online shopping that “buying directly from overseas is cheaper because no consumption tax is applied.” However, this “sanctuary” of tax exemption is about to be dismantled by powerful government intervention.
The keywords are “Platform Taxation” and the “Review of the Tax Exemption for Imports under 10,000 Yen.”
In April 2028, when these two measures are fully aligned, a transparent wall called a “national border” will be reconstructed in Japan’s EC market. By analyzing precedents in the EU and the UK, we will provide a thorough explanation of the challenges faced by overseas operators, platforms, and consumers—and how to overcome them.
1. The Reality of the “Two Major Reforms” Timeline
This transformation will arrive in two stages:
- Stage 1: April 2025 – “Platform Taxation (Digital Services)” Platforms such as Rakuten and Apple will begin remitting consumption tax primarily for app purchases, video streaming, and online lessons.
- Stage 2: April 2028 – “Full Taxation on Goods” Platform taxation will be introduced for physical “goods” like apparel and sundries. Simultaneously, the long-standing exemption of import consumption tax for items under 10,000 yen will be completely abolished.
2. Lessons from Precedents: What Happened in the EU and the UK?
The system Japan is about to introduce is nearly identical to the “VAT Reform” implemented by the UK in January 2021 and the EU in July 2021. The lessons learned from those markets predict Japan’s future.
① Mass Exodus and Shakeout of Overseas Sellers
Immediately after the abolition of tax exemptions in the EU, the number of small-scale cross-border EC sellers (particularly from China) plummeted.
Lesson: Sellers with low-margin, high-volume models could not withstand the administrative costs and the 19–25% tax hike. Sellers who treat cross-border shipping like a “100-yen shop” will suffer devastating blows in Japan by 2028.
② Logistics Chaos and “Surprise Invoices”
In the early stages, packages where taxes were not correctly collected by the platform were frequently stalled at customs.
Lesson: Consumers were suddenly asked for “additional consumption tax and handling fees” by delivery personnel, leading to poor reviews and skyrocketing return rates. How accurately platforms like Rakuten Link data with customs will be a matter of life and death.
③ Shift to Domestic Fulfillment (Onshore Inventory)
Major overseas sellers, seeking to avoid the instability and cost of cross-border shipping, shifted to a “Domestic Distribution Model” by placing inventory in local warehouses.
Lesson: Overseas companies that refuse to give up on the Japanese market will move to secure “warehouses within Japan” by 2028.
3. Fatal Impacts on Overseas Sellers
Based on precedents, overseas sellers will face three major barriers:
Complete Loss of the “10% Price Advantage”:
The “tax handicap” held over domestic competitors will vanish. Competition will be based purely on product strength, shipping costs, and quality.
Abolition of the “60% Taxation Rule” for Personal Imports:
In 2028, the special provision where only 60% of the product price is taxed for personal use will be abolished. This will expand the tax base by 1.6 times. For dutiable items (like leather shoes), the total payment could jump to 1.5 to 2 times the current price.
Compliance Costs for the Invoice System:
Precise data management in accordance with Japanese Consumption Tax Law will be required. Companies unable to comply risk having their listings suspended by platforms.
4. Predicted Trends: Consumers and Platforms
[Consumers] From “Overseas for Price” to “Overseas for Value”
Consumers will face the reality that “overseas shopping is no longer cheap.”
- Acceleration of Domestic Return: If the price is the same, more users will choose “domestically shipped products” that arrive the next day and are easy to return. This is a massive tailwind for domestic retail and manufacturing.
[Platforms] The Burden of Acting as “Tax Office Proxies”
Platforms like Rakuten and Amazon will effectively take on the role of “branch offices of the Tax Bureau.”
- Stricter Seller Screening: To avoid the risk of tax leakage, the screening and data management of overseas sellers will become significantly more rigorous.
5. How to Overcome This Crisis?
This change is an “inevitable future” already decided by law.
Prescription for Overseas Sellers:
- Shift from Price to Experience: Build brand power now that can withstand a price increase of 10% or more.
- Utilize Domestic Warehouses: Graduate from the uncertainty of “direct overseas shipping” and move to a domestic inventory model to ensure tax transparency and delivery speed.
Prescription for Platform Operators:
- Strengthen IT Support for Sellers: Services that “zero out the administrative burden for sellers,” such as providing auto-calculation and registration tools, will become a platform’s competitive edge.
- Transparent Communication with Consumers: It is essential to sincerely explain “why prices have increased” alongside the background of the tax reform to ensure a satisfying shopping experience.
Closing: 2028, The Beginning of True “EC Equity”
The cases of the EU and UK show that despite temporary confusion, the markets ultimately evolved into “high-quality markets where only healthy players who follow the rules remain.”
For overseas sellers, 2028 will be the year their “tax-free bonus” disappears and their true capabilities are tested. Conversely, for domestic operators, this is the ultimate opportunity for “reclamation.”
Those who predict change and move first will survive. Start revising your strategy now for the “X-Day” on April 1, 2028.
Note: This article is based on tax reform information and overseas cases as of January 2026. Please always check official government updates for the latest ordinances.
