Japan's 1% Food Consumption Tax from 1 April 2027: What Has to Change in Your Systems

From 1 April 2027 to 31 March 2029, Japan plans to tax food at 1% instead of 8%. The standard rate stays at 10%. Newspaper subscriptions keep 8%. For two years, every system that prices, sells, orders or invoices food needs a third rate, transitional rules that look at contract and order dates rather than the delivery date alone, and then a switch back to 8% on 1 April 2029.

This is for IT and finance leads at food manufacturers, wholesalers, supermarket and restaurant chains and online food sellers in Japan, and for foreign companies selling food into Japan. If you run a small shop on a cloud register such as Airレジ or スマレジ, skip to the section on vendors: the work is being done for you.

One caveat first: this is a cabinet decision, not yet law. The cabinet adopted the outline (大綱) on 15 September 2026, and the National Tax Agency says its guidance applies only if the bill is submitted to the Diet and passed. As of early October 2026 it has not been submitted, and details can still move. A statute will set both dates and a later one can move them, so keep the dates in configuration rather than code.

What the Cabinet Outline Says

The cabinet outline creates a special national consumption tax rate of 0.78% on food, which with local consumption tax makes 1%. It covers food sold in Japan and food cleared from bonded areas, so imports are included.

The scope does not change. What is taxed at 8% as food today is taxed at 1%: groceries, takeaway and delivery, and mixed gift sets priced at ¥10,000 or less before tax where food is at least two thirds of the value. Alcohol, eat-in dining and catering stay at 10%.

On qualified invoices (適格請求書) and purchase statements (仕入明細書), the 適用税率 column shows 1% and the tax is calculated at 1%. Nothing else in the required content changes, and the existing reduced-rate mark on a line still does the job.

The outline asks ministries to publish details quickly "システムメーカー等が早期に準備に着手できるよう" (so that system makers and others can start preparing early), and promises support for smaller businesses moving to smart registers or modifying their register systems. On 29 September 2026 the cabinet gave the Ministry of Economy, Trade and Industry ¥78.1 billion from the fiscal 2026 reserve fund for implementing the cut (reserve fund decision). We have not yet found published eligibility terms for it.

If you are writing the code, read the NTA's Q&A on its special site first.

What Has to Change, System by System

The tax master: add a rate, do not overwrite one

Since the reduced rate arrived on 1 October 2019, any Japanese system that sells food has carried a standard category at 10% and a reduced category at 8%. The obvious move is to edit the reduced category to 1% on the night of 31 March. That breaks things.

8% stays live after April, for food too: on transitional sales, on returns and rebates against March sales, and on newspapers. It also comes back on 1 April 2029. A rate stored as one value on a category cannot answer "what was the rate on this sale?", which every credit note, reprint and audit asks.

Two designs work. Make the rate on the reduced category effective-dated, so food stays "reduced" and the rate resolves from the supply date. Or add a special-rate category and remap food items for two years: more data migration, but easier to see in reports. Either way, resolve the rate from category, supply date and any transitional flag, and store it on the transaction line.

Then search the code for 8/108 and 10/110 used to back tax out of tax-inclusive prices, for 1.08 multipliers, and for the 6.24/1.76 split in accounting exports. Each needs a 1% counterpart: 1/101, and 0.78 national to 0.22 local.

Invoices, credit notes and purchase statements

On a qualified invoice, tax is rounded once per rate per invoice, never per line, as the NTA's invoice checklist reminds issuers. With a third rate, the totals block and the rounding routine have to handle three groups.

Monthly invoices are where wholesalers will feel it. A supplier closing on the 15th issues an April invoice for 16 March to 15 April, with 8% food lines before the switch and 1% lines after. The NTA Q&A shows two acceptable layouts: separate invoices for each side of 1 April, or one invoice with subtotals by period and rate, which can put 1%, 8% and 10% on one page. Pick one and build it before March.

Credit notes and rebates must use the rate of the original sale, not today's. A volume rebate (販売奨励金) covering a period that spans 1 April has to be split by rate. Supermarkets that issue purchase statements to suppliers carry the same obligation on the buying side.

On payables, the buyer takes the rate the seller put on the invoice. In the NTA's example the supplier books at shipment on 30 March, the buyer at receipt on 2 April, and the buyer claims the 8% on the invoice. A three-way match that recalculates tax from the receipt date will flag that invoice. It is not wrong.

POS, receipts and price labels

Registers switch at the start of 1 April 2027. The NTA accepts that a store whose business day closes at 1:00 can treat sales between midnight and 1:00 as 31 March sales at 8%, if it consistently books them that way.

For restaurants and stores with eat-in space, the gap between eating in (10%) and takeaway (1%) grows from 2 points to 9. Eat-in or takeaway is decided when the food is handed over, so every channel that takes an order (counter, kiosk, mobile order, delivery platform feed) has to carry that flag correctly. If your menu uses one tax-inclusive price for both, look at it again: at ¥1,000 tax-inclusive, the net is about ¥909 eaten in and ¥990 taken away.

Receipts issued as simplified invoices (適格簡易請求書) need the rate or the tax amount per rate group, so the template needs a 1% line.

Tax-inclusive display (総額表示) stays mandatory, and a pre-tax price alone is still not allowed. Where a business genuinely cannot relabel in time, it may show, with a clear notice that the register charges the correct rate:

• prices calculated at 1% from 1 February to 31 March 2027, and from 1 April to 31 May 2029;
• prices calculated at 8% from 1 April to 31 May 2027, and from 1 February to 31 March 2029.

The NTA is explicit that a store which keeps relabelling after the switch but still prints 8% prices on the new labels has no difficulty to claim. So label printing and electronic shelf label feeds must produce 1% prices from 1 April, and the repricing job (new tax-inclusive price, rounding rule, approval) has to run before then.

Ordering and EDI

Business sales take the rate on the date of supply. A contract signed in March for April deliveries is at 1%; the transitional rules are written for subscriptions sold to the public and for mail order, not for supply contracts in general. Open orders, back orders and deliveries rescheduled across 31 March all change rate, so calculate tax at shipment or delivery rather than freezing it at order entry.

Check how your EDI messages carry tax, whether in 流通BMS or a private format agreed with a retailer. If a message carries the rate as a number, both sides must send and accept 1. If it carries only a code meaning "reduced", both sides must agree what that code means on which date, and how a transitional 8% line is told apart. Start with your largest trading partners.

E-commerce, catalogues and subscriptions

This is where the transitional rules bite, and the NTA says they are not optional. Food delivered on or after 1 April 2027 stays at 8% in two cases:

1. Regular supply contracts with the general public, signed before 1 January 2027, for the part paid before 1 April 2027. The NTA's example is a prepaid seasonal food box.
2. Mail order where the terms were presented before 1 January 2027 and the order was received before 1 April 2027. Catalogues, flyers, television and the internet all count, and a catalogue counts as presented once printing is finished. Face-to-face sales do not.

Neither applies if the contract or terms already assume the 1% rate, for example by stating both prices, or if the contract is amended on or after 1 January 2027.

So the rate cannot come from the delivery date alone. A subscription record needs its contract date, which periods were paid and when, and whether the terms state the 1% price. An order needs its order date and the date of the offer it was placed against. For a printed catalogue that is clean. For a website, when a price was "presented" is less clean: keep a dated history of published prices and terms, and settle the reading with your tax adviser.

Imports and foreign sellers

Food cleared from bonded areas from 1 April 2027 is taxed at 1%, so your importer's landed cost changes. If you invoice Japanese customers as a registered invoice issuer, your invoices need the 1% group. If your ERP was set up for European VAT, check that it holds effective-dated rates for Japan rather than one fixed rate per product.

Finance and the tax return

Paying 10% on packaging, energy and logistics while charging 1% on sales can turn a food business into a net refund claimant. The outline lets food sellers leave simplified taxation for the period containing 1 April 2027 without the usual two-year lock, gives simplified-taxation users an input credit equal to their 1% output tax, and lets interim returns be recalculated at 1%. Tax code mappings, return worksheets and cash flow forecasts need the new rate before the first return that contains April 2027.

What Your Vendor Covers, and What It Does Not

Small shops on cloud registers. Airレジ says the change comes as an app update with no new hardware, and the app has no initial or monthly fee. スマレジ says it will apply the change centrally, and that from 1 April 2027 a data sync is expected to be enough. If that is you, there is no project here beyond checking item tax categories.

Packaged accounting and ERP. The vendor will ship the rate. Your customisations, invoice templates, EDI mappings, price files and reports remain yours.

In-house, legacy or heavily customised systems. Everything in this article is yours.

The Timeline Back from 1 April 2027

Six months is workable if the inventory starts now:

• October to November 2026: list every place a rate lives: POS, ERP, EDI, e-commerce, subscription billing, label printing, shelf label feeds, reports, tax return worksheets. Decide the tax master design. This costs little and is useful whatever the Diet does.
• Before 1 January 2027: decide whether new subscription contracts and catalogues state both prices, and make sure contract and offer dates are recorded.
• When the bill passes: commit the build budget. If the Diet changes details, you have changed a design, not code.
• January to February 2027: build and test with the system date set to 31 March and 1 April 2027, and to the 2029 dates.
• March 2027: freeze, reprice, print labels, test EDI with partners.
• 1 April to 31 May 2027: cutover and the display grace window. Watch credit notes, split-period invoices and rescheduled orders.

The NTA's special site lists an address for register and system developers' tax questions, keigen@nta.go.jp, open until around April 2027. Answers take one to two weeks, so ask early.

A Short Checklist

1. Remove hard-coded 8/108, 10/110 and 1.08; store the rate on every line.
2. For subscriptions and mail order, record contract, offer, order and payment dates.
3. Invoice templates: three rate groups, rounding once per rate, a split-period layout.
4. Credit notes and rebates use the original sale's rate; payables accept the supplier's.
5. Make 1 April 2029 a configuration change, not a second project.

Where This Fits

We change the code this touches (ERP tax logic, invoice generation, EDI mappings, subscription billing, checkouts) and test the switch against real transaction data before cutover. Our ERP modernization and e-invoicing integration pages describe how that work runs. If your food pricing or invoicing runs on in-house or customised software, write to office@c9group.dev.