(Published on: 2019/4/17)
What is reduced tax rate?
When you go to McDonald’s restaurants, you are asked if you want to eat in the restaurant or take it somewhere else. Tray or packaging. And it seems this moment will be more important than ever. As you know, the consumption tax rate will be raised to 10% from 1stOctober 2019, and the reduced tax rate will be applied too (For the consumption tax hike, click here). Basically, ‘for here’ means 10% tax rate and ’to go’ means 8% tax rate. There may be a discussion on this multiple tax rate system as it will cause confusion. But there may be less confusion for McDonald’s employees as they already ask you if you like 10% or 8%. By the way, I have seen some people have a takeaway bag but eat hamburgers in the restaurant. Do they pay 8% or 10%? I think they said ‘to go’ when they ordered food but changed their mind and eat it in the restaurant. In that case, they pay 8% because the tax rate is determined when they order food, and then the tax rate won’t change depending on where you eat it.
Reduced tax rate at convenience store?
How about convenience store (Konbini)? There are more than 50,000 convenience stores in Japan and it is said that about 30% of the stores have some areas for customers to eat food (that is sold at the store). Thus 10% tax rate is applied when you eat in those areas. However, unlike McDonald’s, most people select ‘to go’ as it is not a restaurant, and it seems unproductive to ask every single customer where he or she eats. Therefore, according to Japan Franchise Association, convenience stores will put up posters stating that ‘Please tell us if you use the areas for eating’. That is to say, convenience stores don’t ask you where you eat. And 8% tax rate is ‘automatically’ applied unless you say something. So they only ask, ‘Do you have a point card (card for rewards)?’, ‘Would you like your food to be microwaved?’, ‘Would you like a bag? How about a separate bag for warm meal?’, ‘Would you like chopsticks/spoon/fork? How about a straw?’, ‘Do you need a receipt?’, etc.