Moments before midnight on September 30th, our grape Japan reporter stopped by his local convenience store and bought a chuhai (an inexpensive canned shochu highball available in many flavors and found in convenience stores and supermarkets all over Japan). He then returned to the same cash register and bought the exact same chuhai one minute later at 00:00 on October 1st.

A closer look at the two receipts reveals that the same drink cost 152 JPY one minute, and 155 JPY the next minute.

There it was. Unmistakable evidence that the Japanese consumption tax had jumped from 8% to 10%. Today, on October 1st, residents and visitors alike are discovering this new reality.

Just putting it as a tax hike may make it sound simple, but in fact, this new tax hike comes along with a complex set of rules and provisions determining which goods and services stay at 8% and which ones are hiked up to 10%.

For the benefit our readers, we'll try to sort things out and explain how it works:

10% for Dining Out

When it comes to food and drink, one of the main rules to keep in mind is whether you are eating in on premises of a store or taking it out of the store. Your bill at restaurants, which is clearly dining out, will be taxed 10%. This also applies to food and drink at karaoke boxes.

Aside from alcohol (above 1%), as we discovered above, all foods and drinks purchased in supermarkets, convenience stores and the like stay at 8%, with a few exceptions (see below)

However, if you purchase food or drink with the intention of eating it within the premises at an area designated for such purposes, then the items will be taxed at 10%. What this means is at supermarkets or convenience stores with eat-in areas, the cashier may ask you where you intend eating or drinking and ring up your purchase accordingly.

If you're buying a bento lunch at a bento shop and eat it outside on a bench, it will be 8% because the bento shop does not have a seating area for you to eat it inside. Purchases made at food courts in shopping malls will be taxed at 10% because they are considered eating on premises.

Exceptions

Pizza and other food delivery services (Uber Eats, etc.) stay at 8% since they are intended to be eaten at home and are not dining-out. However, catering services are taxed 10%.

Room service in a hotel is also charged at 10%

Food and drink purchased at a concession stand in a movie theater also stays at 8% because the movie theater seats, although they have holders to hold trays, are not designed for dining but for the purpose of watching movies. Similarly, food and drink purchased from a wagon in a train or an airplane stays at 8% because the seats' primary purpose is to transport passengers. Food eaten in the dining area of a train, however, is taxed at 10%.

One interesting exception which may not concern too many visitors is snacks geared towards kids which contain attached prizes. If the cost of the attached prize is worth more than a third of the total cost of the product and the prize has use after the product has been consumed, it will be taxed at 10%, otherwise 8%. So, for example, a bag of chips with attached baseball cards (such as Pro Yakyu Chips by Calbee) and Color Pen Choco by Chirin (chocolate in a pen-shaped container which actually functions as a pen once the chocolate is eaten) is taxed at 10%. This rule applies for any product where the non-food portion is worth more than a third of the total cost.

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Other products and services

When it comes to non-food products, you're most likely looking at a 10% tax.

Transportation, whether public or private through taxis or limousine services, are subject to the 10% tax.

Products purchased in stores such as sanitary and personal hygiene products, oral care products, toiletries, cosmetics, soaps, cleaners and detergents, paper products, medical products, cleaning tools, kitchen products, and home care products are all taxed at 10%

Gifts purchased from catalogs, non-food products purchased online, public utilities (electricity, gas, water), internet usage fees, mobile phone fees, automobiles and other vehicles are also taxed at 10%

Exceptions

Medicine and tonic drinks with medicinal properties are taxed at 10%, but energy drinks, health drinks, drinks with added function and beauty-aid drinks remain at 8%.

For media and print, newspapers published less than twice a week are taxed at 10%. Electronic media, books, magazines, and all newspapers bought at the store or kiosk are also taxed at 10%. However, subscriptions, daily newspapers and sports dailies stay at 8%.