We would like to inform you about the recent announcement from the Japan Customs regarding the revision of the Import Declaration Items and Attorney for Customs Procedure system, effective from October 1, 2023.
Foreign entities can no longer utilize a Japanese company as their IOR, or Importer of Record. As a result, sellers are now required to act as the IOR (Importer of Record) themselves and must use the ACP (Attorney for Customs Procedures) service, a mandatory stipulation.
Reform in the Japanese Customs System (Mandatory Use of ACP; IOR services Prohibited)
In recent years, there have been numerous cases of improper importation of the goods for E-commerce platforms such as Amazon and Rakuten, where forwarders and customs agents have been falsely declared as importers, leading to undervalued import prices. To address this issue, the Japan Customs now requires the use of a Attorney for Customs Procedure (ACP) by non-resident importers to ensure proper import procedures and compliance with regulations. In some cases, the Japan Customs may even designate an ACP on behalf of the non-resident importer.
If you are a non-resident or foreign company using forwarders or customs agents as importers, it is recommended that you promptly switch to utilizing an ACP to ensure proper compliance with the law. We also encourage you to review the accuracy of the declared import prices (we can assist with verification). Additionally, by using an ACP, you can enjoy the benefits in terms of Japan Consumption Tax treatment (link: Consumption Tax Treatment and Benefits of Using ACP).
As a professional ACP firm, we follow the law to facilitate proper import procedures. You can entrust us with your importation needs with confidence. We look forward to discussing further with you.
Case Study: Directives to use ACP
Case 1: Importing Goods Using FS (Fulfillment Services) by Non-resident Sellers
A non-resident seller plans to import goods for sale domestically using FS provided by EC platform operators. At the time of import declaration, there is no sales contract between the seller and the consumer. The seller (non-resident) is the main entity for sales on the EC platform after domestic pickup of the goods. Therefore, the seller, who aims to sell the goods in accordance with the purpose of import, needs to become the import declarant and appoint Attorney for Customs Procedure (ACP) to carry out the import declaration.
Case 2: Importing Goods Using FS by Non-resident Sellers
A non-resident seller plans to import goods for sale domestically using FS provided by EC platform operators. At the time of import declaration, there is no sales contract between the seller and the consumer. The seller (non-resident) entrusts domestic customs clearance arrangements to Company-A (located in Japan), but the main entity for selling the goods within the domestic market using FS remains the seller (non-resident). It is planned that the seller (non-resident), who intends to sell the goods on the EC platform after domestic pickup, should become the import declarant and appoints Attorney for Customs Procedure (ACP) in accordance with the purpose of import declaration.
Case 3: Importing Goods Using FS by Non-resident Sellers
A non-resident seller plans to import goods for sale domestically using FS provided by EC platform operators. At the time of import declaration, there is no sales contract between the seller and the consumer. The seller (non-resident) entrusts the transportation of the goods from overseas sellers to Japan to an overseas forwarder, but the main entity for selling the goods within the domestic market using FS remains the seller (non-resident). It is planned that the seller (non-resident), who intends to sell the goods on the EC platform after domestic pickup, becomes the import declarant and appoints Attorney for Customs Procedure (ACP) in accordance with the purpose of import declaration.
Case 4: Importing Goods for Consignment Sales
Goods (consignment sales goods) intended for domestic sale by an assignee who has received consignment sales from a non-resident consignor are imported. The imported goods are stored in an FS warehouse and sold on the EC platform under the name of the assignee. The assignee is the main entity for selling the goods within the domestic market using FS.
Either of the following options is necessary:
The consignor (non-resident) who has the authority to dispose of the consignment sales goods becomes the import declarant, appoints Attorney for Customs Procedure (ACP), and carries out the import declaration.
The assignee (i.e., the seller on the EC platform) who conducts the act of selling on behalf of themselves as the purpose of import becomes the import declarant and carries out the import declaration.
For more information regarding the revised regulations by the Japan Customs, please refer to the following:
(Link: Revision of Import Declaration Items and Attorney for Customs Procedure (ACP) System) Ministry of Finance, Japan Customs July 2023 With the expansion of cross-border e-commerce, the importation of goods for online shopping has increased, leading to a significant number of cases involving the smuggling of illegal drugs and counterfeit goods that infringe upon intellectual property rights. Particularly concerning are instances of tax evasion, where goods imported through fulfillment services (FS) are declared at unreasonably low prices to evade customs duties.
In light of these circumstances, we have conducted a review of the existing system to ensure the continued facilitation of smooth imports while effectively combating smuggling activities and ensuring proper taxation. Effective from October 1, (2023), there will be an addition to the import declaration items under the Customs Law Enforcement Order, requiring the inclusion of the “address and name of the person intending to import the goods” at the time of import declaration.
Furthermore, there will be additions to the declaration items for Attorney for Customs Procedure (ACP), including information regarding the relationship between the declarant and the Attorney for Customs Procedure (ACP). Additionally, it will be mandatory to submit the contractual documents between the declarant and the ACP. For specific details regarding the revisions to the system, please refer to the following reference materials.
Reference (Japan Customs)
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.
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.
- 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.
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
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.