ACP Import under VMI – Vendor Managed Inventory

We have been receiving an increasing number of requests from new customers (parts/materials manufacturers outside Japan) in the automotive and machinery parts industries.

The background of the increase in needs is that the Japanese end-customer, a manufacturer of finished goods, has requested to switch to VMI (Vendor Managed Inventory), which means that the inventory management is done by the vendor (supplier) side.

Before using the VMI scheme, when trading between an overseas parts/materials manufacturer (seller) and a Japanese finished goods manufacturer (buyer), the buyer would act as the importer and import the goods, and the buyer would manage the goods as its own inventory.

After switching to the VMI scheme, the parts/materials manufacturer (seller) outside Japan imports the goods themselves, manage the inventory near the customer in Japan, and deliver the goods to the buyer’s factory just in time (JIT) when the finished goods manufacturer (buyer) wants the goods.

In this way, the buyer avoids the cumbersome of managing inventory but still can have the seller deliver the required quantity at the required time. Furthermore, since the buyer is not the importer, it is relieved of various responsibilities required of importers (for example, it is no longer necessary to keep import-related documents and books, or to respond to customs post-clearance audits as required by law).

On the other hand, the foreign parts/materials manufacturer (seller) has to use an Attorney for Customs Procedures (ACP) for the seller to act as the importer. In addition, as a response to national taxation, since sales in Japan (taxable sales under the Consumption Tax Law) will occur, it is necessary to appoint a Tax Representative (of JCT – Japan Consumption Tax) to register as a taxable business operator for consumption tax and to perform periodic tax filing duties.

Considering the invoice system for consumption tax, the use of a tax representative is also essential for B2B transactions, as the seller must become a registered business in order to be able to deduct purchases when filing consumption tax returns on the buyer’s side.

 

Switching to the VMI method (example)

Before introducing of VMI program

Foreign parts/materials manufacturer (seller)   → Sales →    Japanese finished goods manufacturer (buyer)

  • Inventory control on the Japanese side: Buyer
  • Importer: Buyer
  • Seller’s sales subject to consumption tax in Japan: No

 

After introducing of VMI program

Foreign parts/materials manufacturer (Seller)   → Sales →   Japanese finished goods manufacturer (Buyer)

  • Inventory control in Japan: Seller
  • Importer: Seller   ACP – Attorney for Customs Procedure is required (for Customs purpose)
  • Sales subject to consumption tax in Japan on the seller’s side: Yes    JCT Tax Representative is required (for National Taxation purpose)

 

Please be careful, having a proper local ACP (Attorney for Customs Procedures) / IOR (Importer of Record) in Japan is significantly crucial. Without this, your goods will be held up at customs, leading to huge delays and costs. To avoid these risks, we recommend appointing us as your ACP. As professionals in this area, we have a proven track record of successfully resolving numerous cases by working closely with Japan Customs.

 

Our ACP Service: The Best Solution for the Japan Importer of Record (IOR)

Attorney for Customs Procedures (ACP) is the best solution for addressing the issue of Japan IOR – Importer of Record. Below is an outline of our primary services and a diagram illustrating the operational structure of the ACP service. Upon successful ACP registration, a foreign entity can become the Japan IOR – Importer of Record.

Basic Scope of Services:

  • Consultation with the Japan Customs Office for successful ACP registration. 
  • Liaising with stakeholders, including Logistics Forwarding Companies and the Customs Offices, on behalf of non-resident clients (i.e., non-resident Japan IOR) to ensure the secure importation of goods.
  • Assistance in preparing the necessary documentation for import clearance.
  • Support of calculation of Customs Value (Customs Valuation Formula), in accordance with appropriate compliance under the Japan Tariff Customs Law.
  • Documents keeping, required under article 95 – Japan Customs Law

**Both import and export activities can benefit from the use of an ACP (Attorney for Customs Procedures). This support is applicable in scenarios where a non-resident acts as the Importer of Record (IOR) for imports and as the Exporter of Record (EOR) for exports.

 

Three Steps to Initiate Shipments Under the ACP Program: :

  1. Quotation Review to Contract Conclusion: Upon receiving your contact details, we will promptly provide a quotation for your review.
  2. Commencing the Registration of ACP (Attorney for Customs Procedure) to Japan Customs: This process is generally completed in about two weeks.
  3. Initiation of First Shipment, Import/Export

 

 

 

Reform in the Japanese Customs System (Mandatory Use of ACP; IOR services Prohibited)

Effective from October 1, 2023, the Japanese Customs authorities have implemented a significant reform in response to increasing instances where foreign sellers incorrectly designate third parties (like forwarders or customs agents) as importers.

This revision mandates foreign entities to comply with new regulations, which include the compulsory utilization of an Attorney for Customs Procedures (ACP). Under this new framework, it is expressly forbidden for foreign sellers to appoint another Japanese service provider in the role of Importer of Record (IOR).

For additional information, please refer to the following resources:

*We are pleased to announce that our ACP/IOR services can support the importation of various regulated items, including those under the Food Sanitation Act (such as food products, tableware, cooking utensils and kitchen tools).

 

Our Customers – Japan IOR / Attorney for Customs Procedures (ACP) Service

All our clients have successfully become Japan Importer of Record (IOR) and imported goods into Japan under our guidance.

Logistics Companies with Collaboration Experience

Here is a list of our partner logistics and forwarding companies with whom we have had successful collaborations. Please note that this list is not exhaustive, as we are open to working with any logistics or forwarding companies. As Attorneys for Customs Procedures (ACP), we represent non-resident clients (IOR) and coordinate with these logistics companies, who manage the transportation of goods to and from Japan.

 

 

 

Why choose us?

  • Customs and International Trade Professionals – Our CEO, Mr. Sawada, is a Certified Customs Specialist in Japan. With years of experience providing services in the Trade & Customs field, his leadership at KPMG and the establishment of his own company, SK Advisory, ensures our commitment to excellence and high-quality service.
  • Full Adherence to Japanese Customs Law – Our top priority is to maintain full compliance with Japanese Customs Law and safely import / export our clients’ goods into / from Japan. We meticulously manage all import compliance aspects, including Japan Importer of Record (IOR) matter, HS code classification and the correct Customs Valuation of goods entering Japan. We support to complete all the necessary shipping documents, such as Invoice, Packing List and BL, on behald of non-resident / foreign Japan IOR.
  • Communication in English, Chinese, and Japanese – Our team, with extensive international experience, excels in communication in English, including facilitating English-language meetings, and has earned considerable trust from clients. We also have staff capable of communicating in Chinese, making us equipped to handle Chinese-language support as well. Naturally, as a Japan-based team, we’re totally fluent in Japanese, ensuring seamless communication across these three key languages.
  • Reputable and Reliable Partner -The growing demand for our Attorney for Customs Procedures (ACP) services is testament to our quality. We proudly serve clients globally, registering over 50 ACP customers annually. Our consistent track record underscores our reliability and credibility. For a detailed list of our clientele, please visit our “Experiences” section. Our unwavering commitment ensures all our clients successfully acquire Japan IOR status and import goods seamlessly into Japan.
  • Recognized ACP Service Provider on Amazon SPN SPN (Service Provider Network) – We are a certified ACP service provider within Amazon’s Service Provider Network (SPN), listed under the Trade Compliance category. Many international Amazon Sellers have successfully become Japan Importers of Record (IOR) through our ACP services.

     

 

 

 

FAQ for ACP (Attorney for Customs Procedures)

What is the role of ACP (ACP Japan)?

  • Representation: ACP (ACP Japan) represents the foreign importer and liaises with Japan Customs and the Forwarding Company/Customs Broker.
  • Documentation and Compliance: ACP assists in preparing essential import documents (e.g., Invoices) in compliance with Japan Customs Law and formally requests the Customs Broker to proceed with customs clearance.
  • Expert Consultation and Troubleshooting: We are a team of legal experts in Customs Laws, providing direct consultations with Japan Customs to ensure compliance and address issues, including troubleshooting unique challenges in non-resident imports.

 

How long time does it require to get ACP’s registration?

It will take approximately 2 weeks until getting an approval from Japan Customs Office.
The breakdown of the task is as follows.

  • Prepare the necessary documentation between us
  • Start pre-consultation with Japan Customs Office and proceed initial review
  • Submit paper-based set of application documents to Japan Customs Office for final review

 

What kind of documents to be necessary for ACP application?

Not limited, but for instance – Power of Attorney, Company Registry, The calculation method of Customs Valuation, Catalog of the import goods, business/logistic flow

 

ACP can handle all kinds of goods?

ACP, is not capable to handle all kinds of goods. If the goods are subject to specific regulations requires importer to be resident in Japan, such goods can not be handled under the ACP. Restricted regulations are, for instance, Act on Pharmaceuticals and Medical Devices, or PSE/PSC.

 

Which regions in Japan are we covering?

Any region in Japan, we can handle.

 

What is difference between ACP and IOR?

ACP is not the Importer. ACP enables non-resident entities to become IOR (Importer of Record).

 

 

How the Japanese New Invoice System affects?  – Advantage of using ACP –

Recently, many companies register JCT (Japanese Consumption Tax) because the new invoice system for JCT will start in October 2023. The concept of the new invoice system is very similar to the EU’s VAT invoice system.

Your Japanese customer can’t claim input tax credits unless the sellers(suppliers) issue a qualified invoice that is written a JCT number. To issue a qualified invoice, sellers(suppliers) need to be a taxable entity and get a JCT number.

Since the seller becomes a taxable entity, the seller is obligated to file JCT tax returns on a regular basis.

For the case of a non-resident entity, when you import and sell to customers in Japan
(1) Pay import JCT to a customs office, 10% of the import customs value when you import
(2) Collect JCT from a customer in Japan, 10% of the sales price when you sell
(3) Submit JCT tax return to a tax office periodically
   (3-1) If you paid (1) as IOR = Importer, which means you appoint ACP, then you’re required to pay only the difference amount (2) – (1)
   (3-2) If you paid (1) but you were not IOR = Importer, then you’re required to pay all the amount of (2). You can’t deduct (1).

 

Please be careful that only the IMPORTER can deduct the import consumption tax at the time of tax filing. In other words, if another IOR service provider became the IMPORTER when you import, basically it would not be possible for the non-resident entity to deduct the import consumption tax. Therefore, you have to pay all the amount of (2) to a tax office.

On the other hand, if you import with ACP, means that you became an IMPORTER thus you can deduct the import consumption tax, when you do JCT tax return. Therefore, you only need to pay the difference amount (2) – (1) to a tax office.

This is one of the significant advantages to use ACP service, not IOR service.

For this reason, we strongly recommend using ACP so that you can become IOR.

Contact us

 

 

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[Our Service]

Our ACP Service for Importer of Record (IOR)

Our ACP Service for Exporter of Record (EOR)

 

[Knowledge Pages]

What is ACP? – Attorney for Customs Procedures

Steps of using ACP, how foreign entity can import into Japan by ACP

What is IOR? – Importer of Record

Amazon won’t become an IOR

Customs Valuation System in Japan

Customs Valuation When You Import By ACP

Consumption Tax in Japan

IOR and ACP

IOR Service

ACP’s Limitation

ACP’s Qualification

ACP’s registration

 

[Recent Updates]

Urgent Compliance Alert for E-Commerce Sellers: Avoid Penalties with Japan’s New Import Regulations – Act Now!

October 2023: Introduction of Two New Systems in Japan – (1) Switching from IOR Provider to ACP & (2) QIS: Japan Consumption Tax’s Qualified Invoice System

ACP Japan Became Amazon’s SPN Provider as Qualified ACP Service Provider

Taxes on Imports: Customs Duty and Japan Consumption Tax (JCT)

Import Permit Document and Alert on IOR Service

New Japan Qualified Invoice System and import JCT (Japan Consumption Tax)