Act on Special Measures Concerning Taxation

The number of units of manufactured tobacco referred to in Article 10, paragraph (1) of the Tobacco Tax Act for heated tobacco (meaning heated tobacco listed in Article 2, paragraph (2), item (i), (e) of that Act, including that deemed to be manufactured tobacco pursuant to the provisions of Article 8, paragraph (2) of that Act; the same applies hereinafter in this paragraph and the following paragraph) shipped from a manufacturing site of manufactured tobacco or taken out of a bonded area on or after April 1, 2026 is to be, notwithstanding the provisions of paragraph (3) of that Article, the number of cigarettes (meaning cigarettes listed in Article 2, paragraph (2), item (i), (a) of that Act; the same applies hereinafter in this paragraph and the following Article) converted by the method specified in each of the following items in accordance with the categories listed in those items:

heated tobacco made by wrapping, in paper or other similar material, a product using leaf tobacco (meaning leaf tobacco prescribed in Article 2, item (ii) of the Tobacco Business Act (Act No. 68 of 1984)) as all or part of its raw materials (limited to heated tobacco used for smoking by directly heating the product using that leaf tobacco as all or part of its raw materials, in the manner specified by Order of the Ministry of Finance): the method of converting every 0.35 grams of the weight of that heated tobacco (excluding the weight of the part pertaining to the filter and other parts specified by Order of the Ministry of Finance; the same applies hereinafter in this paragraph and paragraph (3)) into one cigarette; provided, however, that where the weight per stick of that heated tobacco is less than 0.35 grams, the method of converting one stick of that heated tobacco into one cigarette;

heated tobacco other than that listed in the preceding item: the method of converting every 0.2 grams of the weight of that heated tobacco into one cigarette; provided, however, that where the weight per unit of each product item of that heated tobacco is less than 4 grams, the method of converting one unit of each product item of that heated tobacco into 20 cigarettes.

With regard to heated tobacco listed in item (ii) of the preceding paragraph (limited to that deemed to be manufactured tobacco pursuant to the provisions of Article 8, paragraph (2) of the Tobacco Tax Act) that is used for smoking together with heated tobacco listed in item (i) of that paragraph, and other heated tobacco specified by Cabinet Order, the provisions of the proviso to item (ii) of that paragraph do not apply.

Beyond what is prescribed in the preceding two paragraphs, the calculation in the case of converting weight into a number of units pursuant to the provisions of paragraph (1) and other necessary matters concerning the application of the provisions of the preceding two paragraphs are specified by Cabinet Order.

The rate of tobacco tax on cigarettes that, out of manufactured tobacco taken out of a bonded area by a person other than a specified seller prescribed in Article 11, paragraph (2) of the Tobacco Tax Act, a person entering Japan imports by March 31, 2027 by carrying them at the time of entry or by sending them separately pursuant to the provisions of Cabinet Order, is 14,500 yen per 1,000 cigarettes, notwithstanding the provisions of that paragraph.

The provisions of the preceding paragraph do not apply to cigarettes in a quantity that reaches a commercial quantity.

In the case where a manufactured tobacco manufacturer or a person who takes manufactured tobacco out of a bonded area ships out from the manufacturing site of manufactured tobacco, or takes out of a bonded area, manufactured tobacco for which, in order to load it onto an ocean-going vessel or aircraft, etc. as ship's stores or aircraft stores, the person has obtained, pursuant to the provisions of Cabinet Order, the approval of the director-general of the customs house with jurisdiction over the place of the port at which the person intends to load it, the Tobacco Tax Act and the Act on Collection, etc. of National Consumption Tax Imposed on Imported Goods apply, pursuant to the provisions of Order of the Ministry of Finance, by deeming the loading onto that ocean-going vessel or aircraft, etc. to be an export or a loading onto a foreign vessel or aircraft.

The provisions of Article 85, paragraphs (2) and (3) apply mutatis mutandis to manufactured tobacco that has been loaded onto an ocean-going vessel or aircraft, etc. through the application of the provisions of the preceding paragraph and that was shipped out from the manufacturing site of manufactured tobacco. In this case, the phrase "Consumption Tax Act" in paragraph (2) of that Article is deemed to be replaced with "Tobacco Tax Act"; the phrase "is the location of the place where the designated goods came to fall under the case listed in the relevant item, and the tax base of the designated goods is, notwithstanding the provisions of Article 28, paragraph (4) of that Act, the amount of consideration prescribed in paragraph (1) of that Article for the transfer at the time when the designated goods were transferred by an enterpriser through the application of the provisions of the preceding paragraph" in that paragraph is deemed to be replaced with "is the location of the place where the manufactured tobacco came to fall under the case listed in the relevant item"; and the phrase "Article 47, paragraph (2) of the Consumption Tax Act" in paragraph (3) of that Article is deemed to be replaced with "Article 18, paragraph (2) of the Tobacco Tax Act".