[2028 Impact] Farewell to “Cheap Overseas Shopping”: How the Abolition of Tax Exemptions for Imports Under 10,000 Yen Will Change EC Forever
To those who regularly buy “overseas direct” cosmetics, clothing, and supplements at a bargain on Rakuten or other international EC sites, we bring news that may be shocking, yet is vital to your future shopping habits.
Did you know that until now, purchases from overseas under 10,000 yen were exempt from consumption tax? In fact, the very mechanism that has been the “source of cheap overseas shopping” is set to be abolished as of April 2028 (with final adjustments currently underway).
With this change, both the shopping habits of consumers and the strategies of overseas companies targeting the Japanese market will be fundamentally overturned. This article provides a thorough explanation of the background behind the review of this “under 10,000 yen tax exemption” and predictions for the future.
1. What exactly is the “Tax Exemption for Imports Under 10,000 Yen”?
Under Japan’s current tax system, when importing goods from overseas, if the “taxable value is 10,000 yen or less” (more precisely, there are conditions such as the total amount including product price and shipping being 16,666 yen or less), consumption tax and customs duties are waived. This is known as the “Tax Exemption System for Small-Sum Imported Goods.”
Why did this system exist? In the past, cases of individuals making small-sum purchases from overseas were limited. Considering the administrative cost and effort for customs to strictly calculate and collect taxes on every single small item, it was judged more efficient to “waive the tax if it was under 10,000 yen” as a small concession.
2. Why is it being reviewed now?
The background lies in the explosive popularity of cross-border EC.
- Ministry of Finance: FY2026 Tax Reform Outline
https://www.mof.go.jp/tax_policy/tax_reform/outline/fy2026/08taikou_04.html
Note: The abolition of the “Review of the Consumption Tax Exemption System for Imported Goods” has been explicitly stated to take effect from April 1, 2028 (Reiwa 10).
Three reasons for the system change:
- Inequity with Domestic Companies: If you buy a 3,000 yen T-shirt at a shop in Japan, you pay 300 yen in consumption tax, but if you buy it from an overseas site, you don’t. This “10% difference” has become a fatal disadvantage for domestic retailers.
- Loss of Tax Revenue: Due to the spread of EC, the volume of small-sum cargo eligible for tax exemption has skyrocketed. The government can no longer overlook the massive outflow of potential consumption tax revenue that should have been collected.
- Establishment of platform taxation: Platform taxation on digital services will begin in April 2025, and platforms such as Rakuten and Amazon will have in place a system for automatically collecting taxes. This is expected to significantly reduce administrative costs, which were previously an issue.
3.Profound Impact on Overseas Companies (Sellers)
This review represents a major blow that could signal the collapse of the business model for companies that utilize “overseas direct shipping” as their primary weapon on platforms like Rakuten.
① Two Choices: A “10% Price Hike” or “Profit Reduction”
Overseas shops that have benefited from tax exemptions until now will automatically be responsible for the 10% consumption tax starting April 2028.
- Passing on the Cost: If sales prices are raised by 10%, Japanese customers who previously chose these shops “because they were cheap” will leave.
- Reducing Profits: If prices are kept the same, the company’s own profit will be cut by exactly 10%.
② Prohibition of “Split Shipping” Workarounds for Products over 10,000 Yen
In the past, some vendors avoided taxes by splitting a 20,000 yen product into two shipments to disguise them as “small lots under 10,000 yen.” However, once platform taxation is introduced, the total order amount will be transparent, making such fraudulent practices no longer viable.
③Complication of Administrative Operations
In accordance with system updates by platforms (such as Rakuten), it will become necessary to set accurate tax rates and perform data integration for each product. Small-scale overseas sellers who cannot adapt to these changes may be forced to withdraw from the Japanese market.
4. Consumer Trend Forecast: How Will Shopping Change?
Consumer behavior is also predicted to become highly polarized starting in 2028.
Prediction 1: The “Selection” of Overseas EC Begins
The era of “it’s cheap because it’s from overseas” ends. Consumers will judge more severely, not just comparing prices but asking, “Is this overseas brand worth getting even if I pay the 10% tax?”
Prediction 2: The “Counterattack” and “Re-evaluation” of Domestic EC
If the same 10% tax applies, there will be a strong movement back to domestic shipping products that offer advantages such as faster delivery, reliable after-sales support, and easier returns. This will be a massive tailwind for domestic shops within Rakuten.
Prediction 3: “Last-minute Demand” Just Before Implementation
At the end of March 2028, there is a high possibility of “stockpiling” demand—so-called “last-minute demand”—for apparel, supplements, and cosmetics. It will be a smart choice for consumers to buy consumables like supplements or long-time favorite overseas brand items before April 2028.
Summary: Business Hints for 2028
The abolition of the tax exemption for items under 10,000 yen highlights negative aspects like price hikes for consumers and cost increases for overseas companies at first glance. However, this is a necessary “growing pain” to create a “proper market” in the digital age.
- Advice for Overseas Companies: Survival after 2028 is impossible unless you build added value beyond “cheapness” (such as uniqueness not yet landed in Japan, overwhelming quality, or a resonating brand story) starting now.
- Advice for Domestic Companies: The market that was unfairly taken away is returning. Further refine the “speed” and “trust” that can compete with overseas direct-shipped goods.
- Advice for Consumers: April 1, 2028, is “X-Day.” Until then, organize a list of “things you truly should buy from overseas” and “things you should buy domestically.”
Tax systems in the digital age are becoming equal across borders. Let’s understand this change correctly and enjoy shopping in the new era!
This article is based on tax reform information as of January 2026. The content may change based on future detailed notices, so please always check the latest information.
