- What the bill would change, and when
- Subscriptions and mail-order sales that stay at 8%
- Special filing rules for exempt and simplified-taxation businesses
- What you can check before the bill passes
The short answer
The government submitted a bill to the Diet on 9 October 2026 that would cut the consumption tax on food and drink from 8% to 1% (national and local combined) for two years, from 1 April 2027 to 31 March 2029. According to the House of Representatives' bill records, as of 5 November the bill is still before that House: it was referred to the Committee on Financial Affairs on 20 October, and the committee has not finished its review. The bill has not passed.
The National Tax Agency's materials also say they describe the rules as they would be if the bill is passed and enacted. The useful step now is not to act as if it were settled, but to list what you would need to change if it passes.
The outline of the proposal
The agency's leaflet and Q&A describe the following.
| Item | Proposal |
|---|---|
| Covered | Sales of food and drink, and food and drink taken out of bonded areas |
| Rate | 1% (equivalent to 0.78% national and 0.22% local consumption tax) |
| Scope | The same food and drink that is taxed at 8% up to 31 March 2027 |
| Unchanged | Eating in, alcohol, catering and similar stay at 10%; newspaper subscriptions stay at 8% |
Because the scope matches today's reduced rate, takeaway and delivery would be 1%, while eating in stays at 10%. Whether your current 8% and 10% classification is right carries straight over.
Sales that stay at 8%, and special filing rules
Two kinds of sale stay at 8% even if delivered after 1 April: food supplied under a regular-supply contract made before 1 January 2027 and paid for before 1 April, and mail-order sales (catalogue gifts, for example) whose terms were published before 1 January and which were ordered before 1 April. This is not optional. If the contract was made on the basis of a 1% rate, or the contract is changed, 1% applies.
When the tax on sales falls, the tax paid on purchases can become larger, and a business filing under the standard method may get a refund. The proposal therefore includes these special rules.
- An exempt business can elect taxable status partway through the tax period that includes 1 April 2027, and become taxable from the start of that period
- A business using simplified taxation can switch to the standard method partway through the same period, and the usual two-year lock-in does not apply for that period
- A business that stays on simplified taxation counts an amount equal to the tax on its 1% food sales as its purchase tax
The Q&A also says that an exempt business wishing to become a qualified invoice issuer from 1 April should apply by 17 March, giving 1 April as the requested registration date, as under the current system. Goods sold on or before 31 March and returned after 1 April are handled at the original 8%.
There are also special rules to reduce interim returns, and, where price labels cannot be changed in time, a rule allowing tax-inclusive prices at 8% or 1% to stay between 1 February and 31 May 2027.
What you can check before the bill passes
Checklist
- List the goods and purchases you currently treat as 8%, and check the classification is right
- Whether your till, invoicing and accounting software providers have said anything about a 1% rate
- Whether catalogues or subscription terms you publish this year should say how prices change if the rate changes
Businesses that only buy food are affected too. The Q&A says that if a seller invoices at 8% in March and you receive the goods in April, you claim purchase tax credit at the 8% the seller applied.
Points to watch
The bill could change during Diet deliberations. Do not lock in till settings or new prices before it passes. The support payment for workers in the same bill is not covered here.
Whether to elect taxable status or leave simplified taxation can come out either way depending on your sales and purchases. This article is a general explanation, not individual tax advice. Check with a tax accountant or the tax office before deciding. The agency takes general questions at its reduced-rate and invoice call centre.
One thing to check today
Check whether your till or invoicing software provider has said anything about supporting a 1% rate, and decide who in the business will follow it up.