Japan to Levy 10% Consumption Tax on All Imported Low-Value Goods from 2026

On 4 December 2025, Japan's Liberal Democratic Party (LDP) Taxation Research Council proposed tax amendments that will subject all imported low-value goods to a 10% consumption tax, regardless of their declared value. The reforms, scheduled for full implementation in 2026, are intended to eliminate what policymakers describe as 'unfair competition' faced by domestic retailers, arising from overseas e-commerce platforms' use of the low-value import tax exemption system.

The proposed amendments comprise three core measures.

Abolition of the Low-Value Import Tax Exemption

Japan will fully abolish the existing consumption tax exemption for imported goods valued below ¥10,000 (approximately £60). Once implemented, all imported goods — irrespective of value — will be subject to Japan's standard 10% consumption tax. This change is expected to raise the prices of low-cost overseas goods by around 10%, thereby improving the competitive position of domestic retailers.

Removal of the 0.6-Fold Special Provision for Personal Imports

The government will also abolish the special provision that allows the taxable value of goods imported for personal use to be calculated at 0.6 times the overseas retail price. Under the current system, this rule effectively reduces the taxable base by 40%. Following its removal, both consumption tax and customs duties will be assessed on the full declared value, increasing the tax burden on personal imports by approximately 40%.

Introduction of Platform Intermediary Liability

Under the new framework, overseas e-commerce platforms with annual sales exceeding ¥5 billion (approximately RMB 234 million) will be required to register as intermediary businesses. These platforms must declare and remit the 10% consumption tax on behalf of overseas cross-border sellers. Goods sold through non-registered platforms will be subject to customs duties upon importation.

The measures are expected to have a significant impact on Chinese exports. Approximately 90% of goods and small parcels sold on platforms such as Temu and Shein originate from China. In 2024, Japan imported 170 million low-value items — accounting for about 90% of total imports — worth ¥425.8 billion, with the majority sourced from China.

Japan's policy shift aligns with a broader international trend. The United States abolished tariff exemptions for parcels valued below US$800 in August 2025, having removed exemptions for Chinese goods earlier in May. Vietnam repealed its low-value exemption policy in February 2025. The European Union plans to consider abolishing the €150 exemption from 2026, while the United Kingdom intends to introduce related reforms by 2029. France has previously proposed levying charges on low-value parcels.