How to Understand Consumption Tax? What Do "Tax Excluded" and "Tax Included" Mean on Price Tags in Japan?

Hello! If you've just arrived in Japan or are planning a trip, you've probably been confused by all the kanji on price tags while shopping, right? Especially "税抜" (zeinuki) and "税込" (zeikomi) – these two terms are practically a "must-know" before checkout. Don't worry, it's not complicated at all. Let me break it down for you.

First, what is Japan's Consumption Tax?

Simply put, Japan's Consumption Tax is similar to "sales tax" in other countries or the "value-added tax" (VAT) included in the price of goods back home. It's an extra amount you pay to the government when buying any goods or services in Japan.

Currently, Japan's Consumption Tax has two main rates:

10%: This is the standard rate, applied to most goods and services (like clothes, electronics, cosmetics, dining out, etc.).
8%: This is the "reduced tax rate," mainly applied to daily necessities, most commonly takeaway food and non-alcoholic beverages.

So, when you buy something in Japan, the final amount you pay = the item's base price + Consumption Tax.

"税抜" vs "税込": Which one is the final price?

Now that you understand the Consumption Tax, let's look at these two key terms. They tell you whether the price on the tag includes the tax or not.

税抜 (zeinuki)

Literal Meaning: 税 = tax, 抜 = removed, excluded. Together, it means "tax excluded."
Plain English: Price before tax / Pre-tax price.
What you need to do: When you see this price, you need to mentally add the Consumption Tax to it. That's the final amount you'll pay.

Example: A T-shirt has a large label saying 1,000 JPY (税抜). The amount you pay at checkout is: 1,000 JPY + (1,000 JPY × 10% Consumption Tax) = 1,100 JPY.

税込 (zeikomi)

Literal Meaning: 税 = tax, 込 = included. Together, it means "tax included."
Plain English: Price including tax / Post-tax price.
What you need to do: This is much simpler! The price shown is the price you pay at checkout. What you see is what you pay.

Example: The same T-shirt has a label saying 1,100 JPY (税込). You pay 1,100 JPY at checkout, no need to calculate anything yourself.

Shopping Tips (From Experience)

Look for "税込"! According to a law enacted in Japan in April 2021, all businesses selling directly to consumers must display the "税込" (tax-included) price. So, nowadays, in the vast majority of stores (like Uniqlo, drugstores, convenience stores, supermarkets, etc.), the prices you see are almost always the final tax-included price. You can shop with confidence.
Beware of the "Dual Pricing" Trap Although the law requires tax-included pricing, some shops display the "税抜" price in large font to make items seem cheaper and more attractive, while showing the smaller "税込" price in much smaller print nearby. Like this: <font size=5>9,980 JPY</font> <font size=2>(税込 10,978 JPY)</font> Don't just look at the big number! Always check for the small print – that's the actual amount leaving your wallet.
A Twist at Convenience Stores/Supermarkets (Food & Drinks) As mentioned earlier, takeaway food is taxed at 8%, but eating in the store means 10% tax. So, if you buy a bento, onigiri, or drink at a convenience store or supermarket and plan to eat it in their seating area, the tax rate changes.
- Takeaway (お持ち帰り / omochikaeri): Taxed at 8%.
- Eat-in (イートイン / iitoin): Taxed at 10%. At checkout, the cashier will usually ask: “お持ち帰りですか？” (o-mo-chi-ka-e-ri de-su-ka? / Is this for takeaway?). If you answer “はい” (hai / Yes), you pay 8% tax. If you say you'll eat in the store, the cashier will recalculate at 10%. If you want to save a bit, just always say "takeaway"!

To Summarize

税抜 (zeinuki) = Price before tax. You'll pay more.
税込 (zeikomi) = Price including tax. Pay the amount shown.
Shopping Secret: Look for the word "税込" – it means the final price.
Money-Saving Tip: When buying food or drinks, tell the staff "持ち帰り" (mochikaeri / takeaway) to enjoy the 8% reduced tax rate.

Hope this explanation helps! Next time you're shopping in Japan, seeing these terms won't leave you scratching your head. Happy shopping!