Japan is considering taxing small international purchases made through previously exempt cross-border e-commerce platforms, with the aim of limiting low-priced products from entering the country.
The change proposed Wednesday, at a meeting of the Liberal Democratic Party (PLD) Tax Committee, would end the consumption tax exemption for imported goods worth 10,000 yen or less, or about US$64.
Platforms with annual revenues exceeding 5 billion yen ($32 million) will be required to pay the tax on behalf of sellers. This is expected to include Temu and Shein, as well as Qoo10, a platform operated by US-based eBay.
The exemption is one of the factors that allowed Chinese e-commerce companies to sell imported goods at lower prices in Japan, putting taxed local retailers at a disadvantage. It is expected that canceling the exemption will increase purchase prices by about 10%.
Japan currently requires consumption tax to be paid on goods whose import value exceeds 10,000 yen. Sellers are supposed to collect the tax from buyers and pass it on to the government, but they are said to often fail to do so.
International purchases made through platforms with annual revenue of up to 5 billion yen will remain exempt.
The government intends to incorporate this change into the tax law changes for fiscal year 2026, which will be compiled by the end of the year.
Many countries have recently changed the way they handle low-value imports. In 2021, the European Union abolished the value-added tax (VAT) exemption, and the United States ended its customs exemption for low (minimum) values in August.