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IOR

Conditions for Becoming an Importer of Record (IOR) in Japan

In Japan, the Customs Act establishes the criteria for who can become an Importer of Record (IOR). With the revision of the Customs Act Basic Notice in October 2023, these conditions have become more stringent. As a result, it has become increasingly difficult for foreign corporations without a Japanese office to appoint another Japanese entity as a nominal importer. Instead, foreign corporations are often required to become importers themselves by utilizing an Attorney for Customs Procedures (ACP).

 

Definition of an Importer

According to Customs Act Basic Notice 6-1, an importer is defined as:

Customs Act Basic Notice 6-1
The interpretation of terms related to taxpayers as stipulated in Article 6 of the Act is as follows:
(1) “Person who imports goods” generally refers to the consignee listed on the invoice (or the bill of lading if there is no invoice) for goods imported through an “Import Transaction” (as defined in Article 4, Paragraph 1 of the Customs Tariff Act).

 

This definition implies that in cases of an “Import Transaction,” the consignee is typically recognized as the importer. The term “Import Transaction” is defined in the Customs Tariff Act as:

A transaction conducted between a seller and a buyer who has a base (address, residence, head office, branch office, office, place of business, or equivalent) in Japan, with the purpose of bringing goods into Japan, resulting in the actual arrival of the goods in Japan.

 

When a buy/sell transaction meets this definition, the consignee usually becomes the importer. However, the receiver of the goods does not necessarily have to be the consignee = importer.

For instance, in cases where we act as an Attorney for Customs Procedures (ACP), if goods are sent to a Japanese buyer through a transaction between a foreign seller and a Japanese buyer, but the Japanese buyer does not become the importer due to contractual reasons, the foreign seller can become the importer (using ACP). The foreign seller then imports the goods and subsequently sells them within Japan.

However, it is not straightforward for a foreign seller to obtain approval from Japan Customs as the importer in B2B transactions. The ACP must employ specialized knowledge and legal reasoning to explain the situation to customs authorities and obtain approval.

 

Cases That Do Not Qualify as “Import Transactions”

A review of the “import transaction” definition reveals that it is limited to transactions where the buyer has a base in Japan. Therefore, transactions where a foreign corporation without a Japanese base purchases goods overseas and sends them to Japan, or imports goods through transactions without a sale, do not qualify as “Import Transactions.” In such cases, the conditions for becoming an importer are defined as:

 

Customs Act Basic Notice 67-3-3-2
The definition of “person intending to import goods” as stipulated in Article 59, Paragraph 1, Item 1 of the Ordinance is as follows:

For goods imported through an import transaction, the definition is the same as the “person who imports goods” as stipulated in 6-1(1) above.
In cases other than those in (1) above, the person who has the authority to dispose of the imported goods after domestic clearance at the time of the import declaration, including any other person involved in the import for the intended purpose. Examples include:

  • A person who leases and uses goods imported under a lease agreement.
  • A person who sells goods imported for consignment sales under their own name.
  • A person who processes or repairs goods imported for that purpose.
  • A person who destroys goods imported for that purpose.

It is important to note that the “person intending to import goods” is liable for paying the applicable customs duties under Article 6 of the Act.

 

Thus, even in cases that do not qualify as “Import Transactions,” a person who has the authority to dispose of the imported goods can be recognized as the importer. Many of the foreign corporations we support as ACP are recognized as importers because they have the authority to dispose of the goods. 

 

 

Import

National Tax Agency Update – Third-Party Entities Merely Acting As Customs Brokers or Importers Cannot Act as Importers of Record or Deduct Import Consumption Tax

The National Tax Agency has updated its guidelines following the customs system revision in October 2023.

As highlighted earlier (link – JP Customs Reform – Clarification of Importer Definitions, Introduction of Two New Systems in Japan), the new rules impose stricter criteria for entities qualifying as importers. Third-party entities merely acting as customs brokers or on behalf of another company can no longer be recognized as the importer of record. Consequently, these entities are also ineligible to claim the Import Japan Consumption Tax (Import JCT) deduction, which is reserved for the actual importer.

The National Tax Agency advises that foreign entities should use an Attorney for Customs Procedures (ACP) to serve as the importer of record and to claim the consumption tax refund/deduction for imports. Therefore, both National Tax Agency and Japan Customs recommend using Attorney for Customs Procedures (ACP) for non-resident entities to act as Importer of Record (IOR).

Our company specializes in ACP services, supporting numerous foreign corporations. Please contact us for assistance.

 

 

Handling Import Consumption Tax Deduction When Entrusted by Foreign Entities (National Tax Agency Website)

Inquiry to National Tax Agency:

We, a customs broker, have been entrusted by “Company A,” a foreign entity, to handle customs arrangements for products they plan to sell to customers in Japan. We will also manage the transportation of these products to a domestic warehouse.

After transporting the goods to the domestic warehouse, “Company A” remains the seller, not our company. However, our company will temporarily bear the import consumption tax for withdrawing the products from the bonded area and will later receive reimbursement from “Company A.”

In this case, should the import consumption tax deduction be claimed by our company, the customs broker, or by “Company A,” the taxpayer?

 

Response from National Tax Agency:

“Company A,” the foreign entity, should claim the import consumption tax deduction in their consumption tax return (JCT tax return).

Explanation:

The consumption tax deduction applies to taxable purchases made domestically and to taxable cargo withdrawn from bonded areas. According to Article 30 of the Consumption Tax Act, the entity eligible for the consumption tax deduction is the one who withdraws the taxable cargo, i.e., the entity that made the import declaration.

If there is no buy/sell transaction for the import, the import declaration must be made by the entity with the authority to dispose of the imported goods after withdrawal from the bonded area. Since your company is only handling customs arrangements and transportation to a domestic warehouse, it does not have the authority to dispose of the goods post-withdrawal, thus not qualifying as the importer of record.

Therefore, if “Company A” is a taxable business entity, the import consumption tax deduction should be claimed by “Company A,” the entity with the authority to dispose of the goods, and not by your company as the customs broker.

Note: For “Company A” (a foreign entity) to make the import declaration, it must appoint an Attorney for Customs Procedures (ACP).

Reference:

NTA – Handling of Consumption Tax Deduction When Entrusted with Customs Arrangements by Foreign Entities

 

Customs duty

Tax Refund, Exemption, and Drawback Program for Japan Customs Duty/Import Tax

Imported goods into Japan can receive reductions, exemptions, or refunds of customs duties and import tax (Japan Consumption Tax) under certain conditions specified by the Customs Tariff Law and other relevant procedures. The customs duty relief and refund system is divided into two main categories: permanent schemes established under the Customs Tariff Law and temporary measures outlined in the Temporary Tariff Measures Law. Here is a summary of each system:

 

Customs Tariff Law – Permanent Program

Reduction for deterioration and damage (Art.10)

For imported goods that have suffered deterioration or damage in the bonded area after the import declaration, it is unreasonable to impose a duty equal to that of goods which have not been affected. Therefore, to address this discrepancy, the duty amount on the deteriorated or damaged goods may be reduced or refunded.

 

Reduction for goods exported for processing or repair (Art.11)

For goods exported from Japan for processing (only if the processing is recognized as difficult to perform in Japan) or for repair, and then re-imported into Japan within one year from the date of their export permit, a duty reduction equivalent to the duty on goods of the same nature and form at the time of export permission may be applied.

 

To qualify for duty reduction or exemption upon re-importation after processing or repair, in addition to the usual export procedures, the export declaration must specify that the goods are exported for repair, the anticipated time of import, and the planned place of import. Two copies of the “Processed/Repaired Goods Verification Declaration Form” must be submitted (Customs Form T No. 1050 for duty reduction and Customs Form P No. 7720 for exemption), one of which will be returned to the applicant after customs verification. Additionally, a “Repair Contract” or, if no contract is available, a document of correspondence related to the repair with the foreign exporter or manufacturer must be submitted for customs verification, after which it will be returned to the applicant.

 

Reduction and exemption for basic goods such as pork and sugar (Art. 12)

Duties on certain goods may be reduced or exempted in cases where the prices of imported essentials have surged. This measure aims to prevent price increases of daily necessities, including food and clothing, thereby helping to maintain stability in people’s everyday lives.

 

Reduction and exemption for raw materials used in manufacturing (Art. 13)

Duties on imported raw materials such as corn may be reduced or exempted to support the development of domestic industries that manufacture specific products like formula feed. This measure also aims to maintain stability in people’s everyday lives by ensuring the affordability and availability of essential manufacturing inputs.

 

Unconditional Exemption (Art. 14)

Duties may be exempted for the following items: 1) articles for the use of the Imperial House, 2) articles belonging to the head of a foreign country, 3) articles under state monopoly, and 4) re-imported articles.

 

Reduction and Exemption for Re-importation (Art. 14-2)

For goods re-imported without any change in quality and shape after exportation, if the amount of customs duty chargeable upon re-importation exceeds the duty previously not levied or reduced, an exemption or reduction is applied. The duty shall be reduced by an amount equal to the difference between the duty previously chargeable and the new duty amount under the following conditions:

  1. For products carried out under bonded hozei work (bonded area), the amount of customs duty not actually levied under hozei work;
  2. For products that had previously received a reduction, exemption, refund, or deduction, the amount of customs duty reduction, exemption, or refund newly chargeable upon said product.

 

Exemption for special use (Art. 15)

The duty of special goods (articles used for scientific research or education, etc.) may be exempted conditionally in terms of promotion of science in Japan.

 

Exemption for Goods for Diplomats (Art. 16)

Duties on articles for the official use of foreign embassies and personal use items imported by foreign ambassadors may be exempted. This exemption is granted based on traditional international customs and obligations under international laws.

 

Exemption for Re-exportation (Art. 17)

To promote processing trade and advance cultural and academic levels, duties on goods that do not impact domestic industries and are not consumed in Japan may be exempted. This exemption applies when such goods are re-exported within a year from the date of the import permit.

 

1. Eligible Goods:

The following goods, if imported and re-exported within one year from the date of import permit, are eligible for customs duty exemption:

  • Goods processed or to be used as processing materials
  • Containers for imported or exported goods
  • Goods to be repaired
  • Academic research supplies
  • Test samples
  • Testing equipment for imported/exported goods
  • Samples for orders collection or manufacturing
  • Goods used in international sports competitions and conferences
  • Items for touring performances and film shooting equipment
  • Goods displayed at expositions, exhibitions, fairs, and review events
  • Vehicles imported temporarily by travelers or shipped separately
  • Goods re-exported under the provisions of treaties and exempt from taxes

 

2. Procedures:

(1) Import Procedures:

(2) Export Procedures:

Note: If the imported goods are not re-exported within one year, or are used for other purposes, the exempted duties must be paid. It is necessary to notify the customs in advance and proceed with the required procedures.

 

Reduction for Re-exportation (Art. 18)

For goods that are durable and imported to Japan temporarily, typically under a lease contract, and are subsequently re-exported, the duty chargeable upon re-exportation (excluding the value of usage while in Japan) may be reduced. This facilitates the temporary use of such goods without imposing the full burden of duties as if they were permanently imported.

 

Reduction and Exemption on Raw Materials for Production of Export Goods (Art. 19)

Duties on raw materials used in the production of special export goods may be reduced, exempted, or refunded. This measure is intended to enhance the global competitiveness of these goods and promote exports by alleviating the tax burden on essential production components.

 

Refund and Exemption for Exportation of Goods Manufactured from Duty-Paid Raw Materials (Art. 19-2)

In situations where foreign raw materials, equivalent to domestic types, are necessarily used in the manufacturing of products at a bonded manufacturing warehouse, the duty paid on such raw materials may be exempted or refunded. This provision is designed to support manufacturing processes that contribute to export activities by alleviating the duty burden on essential imported raw materials.

 

Refund on Export of Goods Whose Nature and Form Are Unchanged Since Importation (Art. 19-3)

When goods that have been imported and on which customs duty has been paid are re-exported from Japan without any changes in their nature and form since their importation, the customs duty paid on these goods may be refunded. This refund must be claimed within one year from the date of their import permit. This provision aims to facilitate international trade by allowing the return of duties on goods that were not utilized or altered within Japan.

To receive a refund of customs duties at the time of re-exportation, apart from following the usual import procedures, you must submit two copies of the “Re-export Goods Verification Application Form” (Customs Form T-1625) to customs. One copy will be returned to the applicant after customs verification.

When re-exporting, in addition to the standard export procedures, you need to submit the previously obtained import permit and two copies of the “Application for Refund (Reduction) of Customs Duty for Goods Re-exported in the Same Condition as Imported” (Customs Form T-1627), along with the “Re-export Goods Verification Application Form” that was verified upon import.

The identity of the goods being imported and re-exported is confirmed through marks, numbers, or details on related documents such as packing lists, although sometimes additional documentation such as photographs or catalogs may be requested.

Please note that the entire process related to the refund of duties can be time-consuming. If you are considering applying for a duty refund, it is advisable to consult with customs in advance to understand the procedures and timelines.

 

Refund for Claimed Merchandise (Art. 20)

In cases where claimed merchandise is either re-exported or destroyed, the customs duty paid on such merchandise may be refunded. This provision is designed to assist importers who do not derive any economic benefit from these goods, ensuring they are not financially penalized for merchandise that does not serve its intended market purpose.

To receive a refund for customs duties for re-exported goods, it is essential to complete specific procedures at customs before exporting the goods. Failure to follow these procedures will result in ineligibility for the refund.

Eligible Goods:
  • Goods that must be returned or disposed of due to differences from the contract terms in quality or quantity.
  • Personal items sold through mail order that, upon import, do not meet the importer’s expectations in terms of quality, thus necessitating their return or disposal.
  • Goods that, after importation, become subject to prohibitions on sale or use by law, necessitating their export or destruction in place of export.
Procedures:

To apply for this duty refund, it is mandatory to carry out the following steps at customs before exporting the goods:

If seeking a refund through re-export of non-compliant goods, the goods must first be moved into a bonded area and a “Non-compliant Goods Bonded Area Entry Notice” (Customs Form T No. 1630) must be submitted. Upon confirmation of entry, a receipt for this notice will be issued.

The export declaration for non-compliant goods involves the usual export procedures, plus submitting two copies of the “Customs Duty Refund (Reduction/Deduction) Application for Export of Non-compliant Goods” (Customs Form T No. 1640) with the following documents:

  • Documents proving the non-compliance of goods.
  • For personal items sold via mail order, documents proving such sale (catalogs, order forms, delivery notes, etc.)
  • Proof that the sale or use of the goods or products made from them was banned after importation (copies of the relevant laws or public notices published).
  • Import permit or a substitute certificate from customs.
  • Receipt for the “Non-compliant Goods Bonded Area Entry Notice.”

If seeking a refund through destruction of non-compliant goods, similar steps as above are required for the goods’ entry into a bonded area and receiving the entry receipt, followed by submitting two copies of the “Destruction Approval Application” (Customs Form C No. 3170) with all the aforementioned documents, and obtaining approval for the destruction.

Subsequently, apply for the customs duty refund (reduction/deduction) for the destroyed non-compliant goods by submitting one copy of the “Customs Duty Refund Application for Destroyed Non-compliant Goods” (Customs Form T No. 1660) with the attached destruction approval.

Note: As these refund procedures can be time-consuming, it is advised to consult with customs in advance if you are considering applying for a refund.

 

 

Temporary Tariff Measures Law

Exemption for Aircraft Parts (Art. 4)

Customs duties on aircraft parts that are difficult to manufacture in Japan may be exempted. This exemption is justified by the role such parts play in advancing aircraft transportation, manufacturing, space development, and related technologies, which contribute significantly to the development of industrial economies.

 

Reduction for Products Manufactured from Exported Goods (Art. 8)

Specific import goods made from items that were exported from Japan for processing or assembling, and returned to Japan within one year from the date of export, may qualify for a reduced customs duty. This reduction supports the re-importation of processed or assembled goods, fostering a cycle of export and re-import for added value.

 

Exemption for Goods Exported for Processing or Repair under Economic Partnership Agreement (Art. 8-7)

Goods exported from Japan to countries that are parties to an Economic Partnership Agreement for processing or repair, and returned within one year, may have their customs duties exempted. This exemption is designed to facilitate the international flow of goods for enhancement and repair, promoting economic partnerships and technological exchanges.

 

These provisions reflect Japan’s strategic measures to support key industrial sectors, encourage international trade relations, and leverage global partnerships for technological advancement.

 

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.

ACP

Import Valuation for Japan Amazon FBA: Deductive Method

Import Declaration Value Assessment for Amazon FBA Shipments to Japan

Fundamentals of Calculating Import Declaration Values Based on Japan’s Customs Tariff Law

Overview of customs valuation methodology:

Typically, for importations that involve a purchasing agreement between an overseas seller and a Japanese buyer who also acts as the importer, the declaration value can be based on the CIF sales transaction price. This method is recognized as the primary determination method under Customs Tariff Law Article 4, Paragraph 1.

In instances involving Amazon FBA, where Amazon International Sellers send their products to an Amazon FC warehouse in Japan without transferring ownership, the primary method is not applicable. Consequently, a special determination method must be applied as outlined in Customs Tariff Law Article 4-2 and subsequent sections.

For Amazon FBA shipments, the import declaration value is usually set by a special method detailed in Customs Tariff Law Article 4-4, which calculates the taxable value for special import goods using the domestic sales price determination method of Article 4-3. This process includes subtracting specific local expenses (such as import duties, consumption tax, Amazon Referral Fee, Amazon FBA Fee, and domestic transportation costs) from the domestic sales price, a technique referred to as the Deductive Method.

 

Deductive Valuation Technique

The deductive valuation process, based on the domestic sales price, is outlined as follows:

Step 1) Subtract Amazon Fees, Fulfillment Costs, and Other Domestic Fees (e.g., Domestic Transport, Clearance charge) from the Domestic Sales Price.

Example: Sales Price 74,500 JPY – Total Fees 13,930 JPY = 60,570 JPY

 

Step 2) Adjust the result from step 1 for the 10% Japan Consumption Tax and any applicable customs duty rate.

Example: 60,570 JPY ÷ 110% = 55,063 JPY

 

This results in 55,063 JPY being the per product import declaration value.

 

Required Screenshots for Validation of Sales Price and Fees

Japan Customs mandates the provision of screenshots as proof of the Sales Price and deducted fees.

Evidence of Sales Price: Obtain this from the Amazon Sales Page at [www.amazon.co.jp/dp/ASIN NUMBER]

Amazon Seller Central Simulator: Capture a screenshot from the provided simulator in Amazon Seller Central.

Cost Documentation: Occasionally, you might need to submit the “Fulfillment by Amazon Cost Report”.

As your trusted Customs Procedures Attorneys (ACP) in Japan, ACP JAPAN is committed to meticulously preparing all requisite documentation and screenshots for the import declaration process. Depend on our skilled guidance to meet all your customs requirements.

 

 

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

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.
  • Security Export Control (Classification for List Control, Examination for Catch-All Control, Application of the license to Ministry of Economy, Trade and Industry)
  • Documents keeping, required under article 95 – Japan Customs Law
  • Providing professional trade/customs advice if any issues arise.

**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

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.

 

 

Tax

Only Importer of Record is Eligible for Deduction of Import JCT – Japan Consumption Tax

In Japan, only the Importer of Record (IOR) is eligible to deduct input (import) consumption tax in principle.

The taxpayer liable for the Japan Consumption Tax on Imported Goods from the bonded area, and is considered the importer under Japanese customs law.

Under customs law, the importer is defined as the taxpayer, known as the “Importer of Record – IOR” (Customs Law Articles 6 and 7(1), Basic Customs Notification 7-1).

Since the Importer of Record (IOR) is liable for the tax on taxable goods, such an entity, as a business, is eligible to deduct the related Japan Consumption Tax under the Consumption Tax Law (Consumption Tax Law Article 30, Paragraphs 1(3) and (4)).

As of October 1, 2023, amendments to the Customs Regulations have tightened the definition of who can be an “Importer of Record (IOR)”. Only those involved in the transaction, such as buyers who import through sales transactions or those with ownership and disposal rights over the goods, are allowed. Third parties uninvolved in the transaction cannot be Importers of Record (IOR).

Foreign corporations without a physical presence in Japan (non-residents) can use our Attorney for Customs Procedures (ACP) service, allowing non-residents themselves to become Importer of Record (IOR) and deduct (or refund) import Consumption Tax. We have numerous experiences where we have facilitated such tax deductions (or refunds).

 

Case of Different Substantial Importer and Importer of Record

According to the Tokyo District Court decision on February 20, 2008, “In principle, a tax system where taxable entrepreneurs themselves deduct the taxes paid at the import stage should be assumed. Unless there are special circumstances, it should be understood that a plaintiff who is not the importer of record will not have their consumption tax deductible.” It indicates that tax declarations made in the name of a third party are not intended by law. 

We can learn from this court case that only the Importer of Record (IOR) has the right to deduct input tax amounts.

 

In very limited cases, substantial importers who are not the formal Importer of Record are allowed to deduct input tax amounts.

Practically, it is appropriate to assume that entities who are not the Importer of Record (IOR) are not allowed to deduct import consumption tax.

An exception that allows the deduction of input tax amounts for those not being the importer of record exists under Basic Consumption Tax Notification 11-1-6 “Handling in Cases Where the Substantial Importer and the Importer of Record Differ”.

This directive states that even if the importer of record differs from the substantial importer, the following conditions, if met, allow the substantial importer to deduct the consumption tax paid on their taxable goods:

  1. The substantial importer sells the taxable goods to the importer of record (manufacturer, etc.) for a consideration after importing.
  2. The substantial importer bears the consumption tax amount related to the retrieval of the taxable goods.
  3. The substantial importer preserves the original import permit and receipt of the consumption tax related to the retrieval issued in the name of the importer.

 

Amendment of the Basic Customs Notification as of October 1, 2023

The revision to the Basic Customs Notification effective October 1, 2023, has tightened the definition of “importer = importer of record”, specifically:

  1. For goods imported through an Import Transaction (where the Japanese buyer becomes the importer via a sales transaction between an overseas seller and a Japanese buyer), the definition is similar to “person importing the goods” as stipulated in Basic Customs Notification 6-1(1).
  2. In cases other than the above, at the time of import declaration, it refers to those who have the authority to dispose of the imported goods after domestic retrieval, and if there are others performing the importing acts for the same purpose, it includes them as well.

In summary, if a non-resident or foreign corporation without an office in Japan wishes to import into Japan, it is naturally permissible for the Japanese buyer to become the importer via a transaction with a Japanese company, or for the non-resident having disposal rights to become the importer (using ACP, Attorney for Customs Procedures) and deduct import consumption tax. It is not permissible for a third party with no disposal rights or involvement in the transaction to act as the importer.

Foreign corporations without an office in Japan (non-residents) can use our Attorney for Customs Procedures (ACP) service to act as importers, allowing them to deduct import consumption tax (or, in some cases, obtain a refund). We have numerous instances where we have facilitated such tax deductions (or refunds).

 

 

 

JCT Compliance

Understanding the handling of JCT (such as payment of import JCT, collection of sales JCT from customers, and JCT returns) is crucial to avoid significant cost burdens. This is a vital aspect, so please ensure a thorough understanding to determine the most optimal business model.

Basic procedure

For non-resident entities (Company-A) that import and sell goods to customers in Japan, the standard procedure involves three steps:

  1. Pay import JCT to a customs office, 10% of the import customs value when Company-A imports goods.  <PAY TO CUSTOMS OFFICE>
  2. Obtain JCT from customers in Japan, 10% of the sales price when Company-A sells goods.
  3. Submit JCT tax return and pay the difference amount (2) – (1) to a tax office periodically  <PAY TO TAX OFFICE (different authority from Customs Office)>

Note: Using ACP to become the importer (IOR) is essential for JCT deductions and refunds. If another company acts as the IOR, you cannot deduct the input tax (step 1), and must pay the entire VAT collected (step 2) to the national tax authorities, leading to significant costs.

If you are a JCT-exempt business, the process ends at steps 1 and 2. For taxable businesses or invoice-registered businesses, step 3 (Final Tax Return) is obligatory.

In the Final Tax Return (step 3), if the JCT paid (step 1) exceeds the provisional JCT received (step 2), the difference is refunded. Conversely, if the provisional JCT received (step 2) exceeds the JCT paid (step 1), the difference must be paid to the tax office.

 

Why IMPORTER is important?

It is crucial to note that only the IMPORTER can deduct the import consumption tax at the time of tax filing. (= Deduct above (1) from (2) )

If Company-A uses another company to act IMPORTER, then Company-A can’t do above (3). Company-A has to pay all the amount of (2) to a tax office.

However, if Company-A imports goods using the Attorney for Customs Procedure (ACP), it becomes the Importer and can deduct the import consumption tax when filing the JCT tax return. In this case, Company-A only needs to pay the difference between the JCT collected from customers and the import JCT (2) – (1) paid to the Tax Office.

 

Appoint a tax accounting firm as Tax Representative / Tax Agent

Apart from utilizing ACP, when filing taxes in Japan (3), Company-A must appoint a Tax Representative. The Tax Representative will handle JCT tax registration and JCT filings with the tax office on behalf of the non-resident entity. SK Advisory can introduce our partner tax accounting company that can act as the Tax Representative.

Determination of JCT obligation (Taxable / Exempt)

Tax Payment Obligations of Nonresidents and Foreign Corporations

First, the consumption tax received from customers in Step 2 above should basically be paid to the national tax office. Consumption tax is imposed on transfers, etc. of assets made in Japan. Therefore, even if a nonresident or foreign corporation transfers assets in Japan, it is subject to consumption tax and is obligated to pay the tax.

In some cases, such as exempt businesses, it may not be necessary to pay the tax to the national tax office.

However, the following are examples where one cannot qualify as an exempt business and must file for consumption tax:

<Typical examples of businesses that are not tax-exempt and are required to file a consumption tax return

  1. Qualified JCT Invoice Issuer
  2. Businesses with taxable sales exceeding 10 million yen in the base period (roughly speaking, the fiscal year two years prior) for the taxable period
  3. Businesses with taxable sales exceeding 10 million yen for the specified period (roughly speaking, the first six months of the previous fiscal year, etc.)
  4. Newly established corporations (including specified newly established corporations) with capital or investments of 10 million yen or more for taxable periods without a base period
  5. Businesses that have made the election to become a taxable enterprise

 

※ With the amendments to the Consumption Tax Law in April 2024, regarding point 4, if a foreign corporation has capital or contributions exceeding 10 million yen when they start business operations in Japan (including specifically newly established corporations), regardless of when the corporation was established abroad, they are obliged to pay taxes and declare from the fiscal year they start operations in Japan (applicable for taxable periods starting after October 1, 2024).

 

If you’re an Exempted entity

During the exempt term, a new entity is not required to file tax returns. As long as your entity has exempt status, you are only required to:
(1) Pay 10% tax of the import customs value when you import goods.
(2) Collect 10% of the sales price when you sell goods.
That’s all. You can enjoy the difference amount 2) – 1).

Can Tax-Exempt Businesses Receive Refunds?

Yes, it’s possible, but a final tax return (step 3) is necessary. Even if you’re an exempt business, you are still able to opt to submit a “Taxable Business Selection Notification” to the tax office, intentionally becoming a taxable business to file a final tax return and receive a refund for the paid import JCT. This is applicable only if the JCT paid at import (step 1) exceeds the provisional JCT collected (step 2). Note that using an ACP (Attorney for Customs Procedures) to act as the importer is essential for input tax deduction and refunds.

 

Japanese New Invoice System

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.

Before the Invoice system is introduced (before Oct 2023):

  • A company that paid consideration of goods or services (=Company-B) is able to deduct Input JCT of the consideration regardless of whether the vendor (issuer of invoice, =Company-A) is a JCT-taxable or Non JCT-taxable company.
  • There is no way to confirm whether the vendor (=Company-A) is JCT-taxable or Non JCT-taxable company.

After the Invoice system is introduced (after Oct 2023):

  • A company that paid consideration of goods or services (=Company-B) is able to deduct Input JCT of the consideration only if the vendor (Company-A) has its invoice registration number.
  • Company-B requests Company-A to issue the qualified invoice. If Company-A cannot submit qualified invoice, Company-B will no longer want to buy from Company-A.

**If Company-A only sells to consumers (not business entities), it may not require for Company-A to issuethe qualified invoice since normally consumers would not tend to do tax return. 

Once the Comapny-A (Seller/Supplier) obtains the JCT invoice registration number, which means this company becomes a taxable entity that is obligated to file JCT tax returns on a regular basis.

Is It Better to Become a Registered Invoice Issuer?

This depends on individual circumstances, but generally speaking, for B2B where customers are corporations, it’s better to be a Registered Invoice Issuer (as corporations file JCT returns and need qualified invoices for input tax deductions). For B2C where customers are primarily consumers, the necessity is somewhat reduced (as most consumers do not file JCT returns).

Many companies seem to become Registered Invoice Issuer without fully understanding the system. Being a registered business mandates the filing of a final tax return (step 3). Please seek advice from appropriate experts.

 

Is Support from a Certified Tax Accountant Necessary?

For non-residents conducting tax office procedures (step 3) in Japan, appointing a Tax Representative is required. The ACP handles customs procedures, while the Tax Representative deals with national tax (tax office) matters. Under the Certified Tax Accountant Act, the following tasks are exclusively performed by the Certified Tax Accountants, making their support essential:

  • Preparation of tax documents
  • Tax representation
  • Tax consultation

Our company, in partnership with Certified Tax Accountants skilled in international taxation, will provide support in these areas.

 

Japanese Customs System Reform: Clarification of Importer Definitions

Starting October 1, 2023, Japanese Customs has instituted a pivotal reform aimed at addressing the issue of foreign sellers improperly designating third parties (such as forwarders or customs agents) as importers.

This revision necessitates foreign corporations to utilize an Attorney for Customs Procedures (ACP) to assume the role of Importer of Record (IOR) directly in many cases. The practice of merely nominally appointing another entity as the importer is no longer feasible.

Notably, foreign corporations that act as importers themselves, through the engagement of ACP, are eligible for Japan Consumption Tax (JCT) benefits. (link: Consumption Tax Treatment and Benefits of Using ACP).

As a dedicated ACP firm, we ensure compliance with the law to facilitate correct import procedures, allowing you to trust us with your importation requirements confidently. We are eager to engage in further discussions with you.

 

Revisions Effective October 1, 2023:

Definition of the Importer

  • Regarding a cargo imported under import transaction, an importer is equivalent to “a person who imports a cargo” defined in Article 6-1 (1), General Notification of the Customs Act.    ….. This means, the Consignee, etc., in the case of imports conducted through normal transactions between an overseas seller and a Japanese buyer
  • In the cases other than above, an importer is a person who has a right to disposition of the import cargo at the time of import declaration. If there is another person who acts on the purpose of the import*, that person is also included :

     In case of a cargo imported:
     – under lease contracts, a person who rents and uses the cargo.
     – for consignment sales, a person who sells the cargo in the name of himself/herself (consignee) by accepting the commission.
     – for processing or repairing, a person who processes or repairs the cargo.
     – for disposal, a person who disposes the cargo.

 

For additional information, please refer to the following resources:

 

 

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

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.
  • Security Export Control (Classification for List Control, Examination for Catch-All Control, Application of the license to Ministry of Economy, Trade and Industry)
  • Documents keeping, required under article 95 – Japan Customs Law
  • Providing professional trade/customs advice if any issues arise.

**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

 

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.

Please Be Careful

In cases where foreign corporations (non-residents) without an office in Japan import goods, failure to properly prepare an Importer of Record (IOR) through an Attorney for Customs Procedures (ACP) or similar means can result in goods being held at customs, leading to significant delays and costs. To avoid such risks, please make thorough preparations.

If an ACP is needed, it is crucial to utilize the services of an experienced ACP well-versed in customs-related laws and regulations. The import and export operations of non-residents/foreign corporations using an ACP are treated as unique cases. Many customs brokers are not familiar with these procedures, leading to incidents where goods are detained for extended periods due to unsuccessful explanations to customs. (Customs will not permit the import if the explanations provided by the importer or customs broker are unsatisfactory, resulting in the goods being detained until customs is convinced.)

We highly recommend utilizing our services as professional experts in customs, knowledgeable about customs-related laws and regulations. With a proven track record of resolving numerous issues through direct consultations with customs officers and customs brokers, our clients supported as an ACP now exceed 100 companies. We are committed to delivering industry-leading results with our expertise.

 

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. Our unwavering commitment ensures all our clients successfully acquire Japan IOR status and import goods seamlessly into Japan.
  • Handling Regulated Products – Our ACP/IOR partnership system can manage regulated items, including cosmetics, PSE-products, foodstuffs, and tableware.
  • Recognized ACP Service Provider on Amazon 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.

     

Restrictions on Handling by ACP in Japan – Our System Enables Us to Handle Regulated Items

Japanese Certain laws, such as the Pharmaceutical and Medical Products Act, the Electrical Appliance and Material Safety Act (PSE), the Consumer Product Safety Law (PSC), and the Food Sanitation Act, stipulate that importers must be corporations with a registered address in Japan, and thus restrict handling.

However, we have established a partnership system that enables us to arrange the Importer of Record (IOR) and Attorney for Customs Procedures (ACP) for regulated items, including cosmetics, PSE-regulated products, foodstuffs, and tableware.

While many ACP service providers do not handle such regulated items, our ability to handle those regulated items has become a competitive advantage of our company. Please consult with us for handling these regulated items.

 

 

How to determine the Import Declaration Value?

Primary determination method

The process of determining the Import Declaration Value of imported goods is known as “Customs Valuation.” In most cases, when an import is based on an “Import Transaction”※1 between an overseas seller and a buyer in Japan, the primary determination method can be utilized.

※1：An “Import transaction” refers to a transaction where a buyer in Japan engages in a sales transaction with an overseas seller for the purpose of shipping goods to Japan, and the goods subsequently arrive in Japan.

Under the primary determination method, the Customs value of the imported goods is determined as the transaction price paid by the buyer (CIF basis).

Customs Duty is calculated by multiplying the Customs Value (Transaction Value) by the Duty Rate, which varies depending on the HS code of the goods.

Consumption Tax, on the other hand, is calculated by multiplying the Customs Value plus Customs Duty by the Consumption Tax rate (currently 10%).

Exceptional determination method (e.g. when to use ACP)

In cases where a non-resident company imports goods into Japan without engaging in a sales transaction, the primary method cannot be utilized. Simply using an Invoice Value is not appropriate.

To calculate the Customs Value in such situations, it is necessary to apply the Exceptional Determination Method.

Within the exceptional determination method, several methods can be considered:

  • Transaction Value of Identical or Similar Goods Method: If you have previously imported goods that possess identical or similar conditions to the goods in question, the transaction value of those goods can be used.
  • Domestic Selling Price Method (Deductive Method): If you can identify the sales price (can be an estimated sales price), the domestic selling price method can be employed.
  • Cost of Production Method (Cost plus Method): If the exporter is a manufacturer and can provide production costs, the production cost method may be applicable.

If none of the above methods are suitable, “Other methods” are utilized as a flexible determination method, taking into account the calculation methods mentioned earlier.

In the practical scene, most of the cases we use this “Other methods” which is a determination method in a flexible way through considering the previously mentioned calculation methods.

 

Avoiding Customs Valuation Problems

In recent times, there have been numerous instances of trouble arising from incorrect Customs Value settings.

In the worst-case scenario, goods may fail to clear customs, resulting in significant detention fees and eventual return shipment.

At SK Advisory, we specialize in establishing appropriate Customs Values. We can assist in conducting consultations with Japan Customs on behalf of our clients, effectively avoiding any potential issues down the line.

For Amazon’s FBA business, there is a recommended calculation formula for the declaration value. If you would like to learn more about it, please don’t hesitate to contact us!

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?

Whereas many ACP service providers do not handle regulated items, our company’s competitive advantage stems from our ability to manage such products. We can support regulated items, including cosmetics, PSE-regulated products, foodstuffs, and tableware.

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).

—

We’re a reliable ACP service provider for Amazon FBA’s seller

In recent, we’ve been supporting many import projects of goods related to the Amazon-FBA program. If you are looking for a reliable ACP service provider, please let us know.  

—

Guidance by Amazon

According to the seller central website in Amazon, there is guidance by Amazon that a non-resident entity needs to appoint an ACP or IOR. You may check on this “Non-resident requirements”. Also, you can check the document developed by Amazon “Understand ACP and IOR guidance”.   —–

Our ACP Service (Attorney for Customs Procedures)

Contact us

—–

[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

Limitation on Handling by ACP in Japan – Our System Enables Us to Handle Regulated Items

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)

ACP

Japan Security Export Control – Compliance Establishment

Exporters shipping goods from Japan are required to verify whether the exported goods or transactions are subject to security export control regulations. Exporters must prepare the necessary classification documents (Certificates of Non-Applicability/Applicability) for export customs clearance and, where necessary, obtain permission from the Ministry of Economy, Trade and Industry.

Compliance with list control and catch-all control regulations, as defined in the Foreign Exchange and Foreign Trade Act, Export Order, Foreign Exchange Order, and the Order Concerning Export, etc., is mandatory. There are also penalties for non-compliance.

Our company supports many foreign corporations (exporters and importers) based outside Japan as an Attorney for Custms Procedures (ACP). Acting as an ACP for the foreign corporations, we handle customs procedures as well as tasks required under security export control, including determination of list control compliance, transaction reviews under catch-all regulations, and applications for permits from the Ministry of Economy, Trade and Industry.

With the increase in export cases, we have established a business process for security export control that meets the “Compliance Standards for Exporters, etc.: I Standards of Compliance for Exporters, II Standards of Compliance for Export of Controlled Items,” as stipulated by law.

As a professional Attorney for Customs Procedures, we are committed to properly adhering to various compliance requirements.

 

Reference: Ministry of Economy, Trade and Industry, Security Trade Control Guidance (Link)

 

 

 

 

 

Various Laws to Consider When Exporting

Customs Law Related:
  – Customs Law: Prohibited items (narcotics, child pornography, items infringing intellectual property rights, copies, imitations, etc.).

Security Trade Control (Export Control) Related:
  – Export Trade Control Order: Goods
  – Foreign Exchange Order: Services (technology)

Other Laws Related:
  – Cultural Property Protection Law
  – Wildlife Protection and Hunting Law
  – Livestock Infectious Disease Prevention Law
  – Rabies Prevention Law
  – Plant Quarantine Law
  – Road Transport Vehicle Law
  – Narcotics and Psychotropic Drugs Control Law, Cannabis Control Law, Opium Law, Stimulants Control Law

 

Framework of Security Trade Control Regulations

1) List Control:

Prohibited goods and technologies that should not be exported (advanced technology, dual-use risks):
  – Goods: Items 1 to 15 in Schedule 1 of the Export Trade Control Order.
  – Services: Items 1 to 15 in Schedule of the Foreign Exchange Order.

2) Catch-All Controls:

Prohibited export recipients (UN arms embargo countries or concerning individuals/organizations):
  – Goods: Item 16 in Schedule 1 of the Export Trade Control Order “All except food and wood.”
  – Services: Item 16 in Schedule of the Foreign Exchange Order “Technologies related to all except food and wood.”

 

Penalties Related to Export Control

Criminal Penalties (Maximum):

  – Up to 10 years imprisonment
  – Fine up to 1 billion yen (for corporations)
  – Fine up to 30 million yen (for individuals)

Administrative Penalties:

  – Prohibition on exporting goods or providing technology for up to 3 years
  – Prohibition from taking executive positions in other companies

 

Export Control Procedures

Step-1: Yes-No Determination
Determine whether the goods or technology to be exported falls under the “List Control” goods etc.

  – Specific items are listed in “Schedule 1 of the Export Order” or “Schedule of the Foreign Exchange Order”, and their specific specifications are confirmed in “Goods etc. Ministerial Ordinance”.

  – Item verification: Match export items against the contents of Schedule 1 of the Export Order or the Foreign Exchange Order. 

  – Specification verification: Match against the Goods etc. Ministerial Ordinance. The “Goods & Technology Matrix Table” on the Ministry of Economy, Trade and Industry website is helpful for matching export item specifications.

  – Using the “Item-by-Item Comparison Table” or “Parameter Sheet” can be more efficient. Available for purchase from the CISTEC website.

  – If not applicable, a non-applicable certificate is created.

 

Step-2: Transaction Examination
Check who the counterpart is (inquirer, end-user), and what the uses are to decide whether to proceed with the transaction.

(1) “End-Use & End-User” verification and decision.
(2) Decision on the applicability of “Exception Provisions” (such as gratuitous exception, small amount exception).
(3) Decision on the applicability of “General Permit”.
(4) Check concerning Catch-All Controls.
  → If necessary, apply for individual permission from the Ministry of Economy, Trade and Industry.

 

Step-3: Shipping Management, Export

  – Ensure that the Yes-No Determination and Transaction Examination are properly completed.
  – Verify that the goods or technology to be exported is the same as what was determined and examined.
  – If a permit is required for export, ensure it is obtained.

 

Export Permit Application

When exporting goods or providing technology that falls under regulation, it is necessary to obtain prior permission from the Ministry of Economy, Trade and Industry (normally, electronic application through NACCS).

 

Compliance with Export Control Standards (enacted April 2010)

  – Those engaged in exporting or providing technology as a business (exporters etc.) must comply with the Exporter Compliance Standards according to Article 55-10, Paragraph 4 of the Foreign Exchange Law.

  – Exporters etc. dealing with security-sensitive specified important goods (List Control items) must comply with Standards I and II. Those not dealing with such items must comply with Standard I only.

 

Tips for Export Management (Utilization of Forms)

By establishing and utilizing company-specific forms (formats), export management tasks can be securely implemented, and illegal exports can be prevented.

Form Examples:

  – Yes-No Determination: Yes-No Determination Form
  – Transaction Examination: Use Checklist, End-User Checklist, Clear Guideline Sheet, Transaction Examination Form
  – Shipping Management: Shipping Checklist

  Reference: Ministry of Economy, Trade and Industry Security Trade Control Guidance Materials

 

Gratuitous Exception (exemptions where permit application is waived)

Gratuitous Notice: Goods imported gratuitously as specified by the Minister of Economy, Trade, and Industry under Article 4, Paragraph 1, Item Ho and He of the Export Trade Control Order.

Goods imported gratuitously and returned gratuitously (9 cases extracted):
 – Goods exported from Japan that are repaired in Japan and re-exported.
 – Goods exhibited at exhibitions held in Japan from abroad.
 – Goods imported through an ATA Carnet for temporary import.
 – Items carried by persons temporarily entering and leaving the country for personal use.
 – Goods imported for the purpose of transporting other goods.

Goods to be exported gratuitously as specified (7 cases extracted):
 – Goods exported by the International Emergency Assistance Team for use in international emergency assistance activities.
 – Goods exported by experts dispatched by the Japan International Cooperation Agency for their use.
 – Items carried by persons temporarily leaving the country for personal use.
 – Goods exported for the purpose of transporting other goods.

 

Small Amount Exception (exemptions where permit application is waived)

 (1) Items under Items 1-4 of Schedule 1 of the Export Order: No application of small amount exception.
 (2) Goods under Items 5-13 of Schedule 1 of the Export Order, except below (3): Below 1 million yen.
 (3) Goods specified by the Minister of Economy, Trade, and Industry under the provisions of Schedule 3, Item 3 of the Export Order (Schedule 3, Item 3 Notice): Below 50,000 yen.
 (4) Goods under Item 14 of Schedule 1 of the Export Order: No application of small amount exception.
 (5) Goods under Item 15 of Schedule 1 of the Export Order: Below 50,000 yen.
 (6) Goods under Item 16 of Schedule 1 of the Export Order: No application of small amount exception.

  Note: If the destination is a concern country (North Korea, Iran, Iraq, etc.), the small amount exception does not apply.

 

U.S. Export Control Regulations – EAR (Export Administration Regulations)

A feature of the U.S. EAR is its “extraterritorial application”. When U.S.-origin goods or technology exported from the U.S. are re-exported from the importing country, in addition to review under the domestic laws of that country, an export review based on U.S. law is also required. If applicable, permission must be obtained from the U.S. government.

 Step-1: Check if the item is subject to EAR regulations (CCL – Commerce Control List). 
 Step-2: Check if an ECCN (Export Control Classification Number) exists.
 Step-3: Check if re-export permission is required.
 Step-4: Check if a license exception is applicable.
   → If necessary, apply for permission from the U.S. government.

 

 

 

 

Our Service – Attorney for Customs Procedures (ACP) for Exporter of Record (EOR)

 

What is an Exporter of Record (EOR) in Japan?

For exporting goods from Japan, it is required to designate a Japan Exporter of Record (EOR).

The EOR must typically be a Japanese resident person or entity, bearing responsibility for compliance with export-related regulations.

Japan Customs mandates that the EOR be based in Japan, disallowing foreign entities from fulfilling this role directly.

What is Japan ACP – Attorney for Customs Procedures

Nevertheless, foreign entities can engage in exporting from Japan by appointing an Attorney for Customs Procedure (ACP). This appointment allows the foreign enties to operate as a Non-Resident Exporter (EOR), enabling them to manage exports independently.

The concept is similar for imports. While a non-resident cannot directly become a Japan Importer of Record (IOR), utilizing an ACP enables a foreign entity to assume the role of an IOR equivalently.

 

Our ACP Service: The Best Solution for the Japan Exporter of Record (EOR)

Attorney for Customs Procedures (ACP) is the best solution for addressing the issue of Japan EOR – Exporter 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 EOR – Exporter 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.
  • Security Export Control (Classification for List Control, Examination for Catch-All Control, Application of the license to Ministry of Economy, Trade and Industry)
  • Documents keeping, required under article 95 – Japan Customs Law
  • Providing professional trade/customs advice if any issues arise.

**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

 

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.

 

Please Be Careful

In cases where foreign corporations (non-residents) without an office in Japan import goods, failure to properly prepare an Importer of Record (IOR) through an Attorney for Customs Procedures (ACP) or similar means can result in goods being held at customs, leading to significant delays and costs. To avoid such risks, please make thorough preparations.

If an ACP is needed, it is crucial to utilize the services of an experienced ACP well-versed in customs-related laws and regulations. The import and export operations of non-residents/foreign corporations using an ACP are treated as unique cases. Many customs brokers are not familiar with these procedures, leading to incidents where goods are detained for extended periods due to unsuccessful explanations to customs. (Customs will not permit the import if the explanations provided by the importer or customs broker are unsatisfactory, resulting in the goods being detained until customs is convinced.)

We highly recommend utilizing our services as professional experts in customs, knowledgeable about customs-related laws and regulations. With a proven track record of resolving numerous issues through direct consultations with customs officers and customs brokers, our clients supported as an ACP now exceed 100 companies. We are committed to delivering industry-leading results with our expertise.

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. Our unwavering commitment ensures all our clients successfully acquire Japan IOR status and import goods seamlessly into Japan.
  • Handling Regulated Products – Our ACP/IOR partnership system can manage regulated items, including cosmetics, PSE-products, foodstuffs, and tableware.
  • Recognized ACP Service Provider on Amazon 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?

Whereas many ACP service providers do not handle regulated items, our company’s competitive advantage stems from our ability to manage such products. We can support regulated items, including cosmetics, PSE-regulated products, foodstuffs, and tableware.

 

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).

 

 

—–

[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

Limitation on Handling by ACP in Japan – Our System Enables Us to Handle Regulated Items

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)

 

 

 

 

Tax

Japan JCT Tax Obligations for Foreign Corporations with a Capital of Over 10 Million Yen (Amendments to the Consumption Tax Law, April 2024)

Consumption tax in Japan applies to the transfer of assets conducted domestically by businesses, which means that non-residents and foreign corporations are also subject to consumption tax and are obliged to pay it if they transfer assets within Japan.

In some cases, such as exempt businesses, it may not be necessary to pay the tax to the national tax office.

However, the following are examples where one cannot qualify as an exempt business and must file for consumption tax:

Examples where JCT tax filing is required:

  1. Qualified JCT Invoice Issuer
  2. Businesses with taxable sales exceeding 10 million yen in the base period (roughly speaking, the fiscal year two years prior) for the taxable period
  3. Businesses with taxable sales exceeding 10 million yen for the specified period (roughly speaking, the first six months of the previous fiscal year, etc.)
  4. New corporations (including specified newly established corporations) with capital or investments of 10 million yen or more for taxable periods without a base period
  5. Businesses that have made the election to become a taxable enterprise

 

※ With the amendments to the Consumption Tax Law in April 2024, regarding point 4, if a foreign corporation has capital or contributions exceeding 10 million yen when they start business operations in Japan (including specifically newly established corporations), regardless of when the corporation was established abroad, they are obliged to pay taxes and declare from the fiscal year they start operations in Japan (applicable for taxable periods starting after October 1, 2024).

 

 

 

 

 

JCT Compliance

Understanding the handling of JCT (such as payment of import JCT, collection of sales JCT from customers, and JCT returns) is crucial to avoid significant cost burdens. This is a vital aspect, so please ensure a thorough understanding to determine the most optimal business model.

Basic procedure

For non-resident entities (Company-A) that import and sell goods to customers in Japan, the standard procedure involves three steps:

  1. Pay import JCT to a customs office, 10% of the import customs value when Company-A imports goods.  <PAY TO CUSTOMS OFFICE>
  2. Obtain JCT from customers in Japan, 10% of the sales price when Company-A sells goods.
  3. Submit JCT tax return and pay the difference amount (2) – (1) to a tax office periodically  <PAY TO TAX OFFICE (different authority from Customs Office)>

Note: Using ACP to become the importer (IOR) is essential for JCT deductions and refunds. If another company acts as the IOR, you cannot deduct the input tax (step 1), and must pay the entire VAT collected (step 2) to the national tax authorities, leading to significant costs.

If you are a JCT-exempt business, the process ends at steps 1 and 2. For taxable businesses or invoice-registered businesses, step 3 (Final Tax Return) is obligatory.

In the Final Tax Return (step 3), if the JCT paid (step 1) exceeds the provisional JCT received (step 2), the difference is refunded. Conversely, if the provisional JCT received (step 2) exceeds the JCT paid (step 1), the difference must be paid to the tax office.

 

Why IMPORTER is important?

It is crucial to note that only the IMPORTER can deduct the import consumption tax at the time of tax filing. (= Deduct above (1) from (2) )

If Company-A uses another company to act IMPORTER, then Company-A can’t do above (3). Company-A has to pay all the amount of (2) to a tax office.

However, if Company-A imports goods using the Attorney for Customs Procedure (ACP), it becomes the Importer and can deduct the import consumption tax when filing the JCT tax return. In this case, Company-A only needs to pay the difference between the JCT collected from customers and the import JCT (2) – (1) paid to the Tax Office.

 

Appoint a tax accounting firm as Tax Representative / Tax Agent

Apart from utilizing ACP, when filing taxes in Japan (3), Company-A must appoint a Tax Representative. The Tax Representative will handle JCT tax registration and JCT filings with the tax office on behalf of the non-resident entity. SK Advisory can introduce our partner tax accounting company that can act as the Tax Representative.

Determination of JCT obligation (Taxable / Exempt)

Tax Payment Obligations of Nonresidents and Foreign Corporations

First, the consumption tax received from customers in Step 2 above should basically be paid to the national tax office. Consumption tax is imposed on transfers, etc. of assets made in Japan. Therefore, even if a nonresident or foreign corporation transfers assets in Japan, it is subject to consumption tax and is obligated to pay the tax.

In some cases, such as exempt businesses, it may not be necessary to pay the tax to the national tax office.

However, the following are examples where one cannot qualify as an exempt business and must file for consumption tax:

<Typical examples of businesses that are not tax-exempt and are required to file a consumption tax return

  1. Qualified JCT Invoice Issuer
  2. Businesses with taxable sales exceeding 10 million yen in the base period (roughly speaking, the fiscal year two years prior) for the taxable period
  3. Businesses with taxable sales exceeding 10 million yen for the specified period (roughly speaking, the first six months of the previous fiscal year, etc.)
  4. Newly established corporations (including specified newly established corporations) with capital or investments of 10 million yen or more for taxable periods without a base period
  5. Businesses that have made the election to become a taxable enterprise

 

※ With the amendments to the Consumption Tax Law in April 2024, regarding point 4, if a foreign corporation has capital or contributions exceeding 10 million yen when they start business operations in Japan (including specifically newly established corporations), regardless of when the corporation was established abroad, they are obliged to pay taxes and declare from the fiscal year they start operations in Japan (applicable for taxable periods starting after October 1, 2024).

 

If you’re an Exempted entity

During the exempt term, a new entity is not required to file tax returns. As long as your entity has exempt status, you are only required to:
(1) Pay 10% tax of the import customs value when you import goods.
(2) Collect 10% of the sales price when you sell goods.
That’s all. You can enjoy the difference amount 2) – 1).

Can Tax-Exempt Businesses Receive Refunds?

Yes, it’s possible, but a final tax return (step 3) is necessary. Even if you’re an exempt business, you are still able to opt to submit a “Taxable Business Selection Notification” to the tax office, intentionally becoming a taxable business to file a final tax return and receive a refund for the paid import JCT. This is applicable only if the JCT paid at import (step 1) exceeds the provisional JCT collected (step 2). Note that using an ACP (Attorney for Customs Procedures) to act as the importer is essential for input tax deduction and refunds.

 

Japanese New Invoice System

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.

Before the Invoice system is introduced (before Oct 2023):

  • A company that paid consideration of goods or services (=Company-B) is able to deduct Input JCT of the consideration regardless of whether the vendor (issuer of invoice, =Company-A) is a JCT-taxable or Non JCT-taxable company.
  • There is no way to confirm whether the vendor (=Company-A) is JCT-taxable or Non JCT-taxable company.

After the Invoice system is introduced (after Oct 2023):

  • A company that paid consideration of goods or services (=Company-B) is able to deduct Input JCT of the consideration only if the vendor (Company-A) has its invoice registration number.
  • Company-B requests Company-A to issue the qualified invoice. If Company-A cannot submit qualified invoice, Company-B will no longer want to buy from Company-A.

**If Company-A only sells to consumers (not business entities), it may not require for Company-A to issuethe qualified invoice since normally consumers would not tend to do tax return. 

Once the Comapny-A (Seller/Supplier) obtains the JCT invoice registration number, which means this company becomes a taxable entity that is obligated to file JCT tax returns on a regular basis.

Is It Better to Become a Registered Invoice Issuer?

This depends on individual circumstances, but generally speaking, for B2B where customers are corporations, it’s better to be a Registered Invoice Issuer (as corporations file JCT returns and need qualified invoices for input tax deductions). For B2C where customers are primarily consumers, the necessity is somewhat reduced (as most consumers do not file JCT returns).

Many companies seem to become Registered Invoice Issuer without fully understanding the system. Being a registered business mandates the filing of a final tax return (step 3). Please seek advice from appropriate experts.

 

Is Support from a Certified Tax Accountant Necessary?

For non-residents conducting tax office procedures (step 3) in Japan, appointing a Tax Representative is required. The ACP handles customs procedures, while the Tax Representative deals with national tax (tax office) matters. Under the Certified Tax Accountant Act, the following tasks are exclusively performed by the Certified Tax Accountants, making their support essential:

  • Preparation of tax documents
  • Tax representation
  • Tax consultation

Our company, in partnership with Certified Tax Accountants skilled in international taxation, will provide support in these areas.

 

Japanese Customs System Reform: Clarification of Importer Definitions

Starting October 1, 2023, Japanese Customs has instituted a pivotal reform aimed at addressing the issue of foreign sellers improperly designating third parties (such as forwarders or customs agents) as importers.

This revision necessitates foreign corporations to utilize an Attorney for Customs Procedures (ACP) to assume the role of Importer of Record (IOR) directly in many cases. The practice of merely nominally appointing another entity as the importer is no longer feasible.

Notably, foreign corporations that act as importers themselves, through the engagement of ACP, are eligible for Japan Consumption Tax (JCT) benefits. (link: Consumption Tax Treatment and Benefits of Using ACP).

As a dedicated ACP firm, we ensure compliance with the law to facilitate correct import procedures, allowing you to trust us with your importation requirements confidently. We are eager to engage in further discussions with you.

 

Revisions Effective October 1, 2023:

Definition of the Importer

  • Regarding a cargo imported under import transaction, an importer is equivalent to “a person who imports a cargo” defined in Article 6-1 (1), General Notification of the Customs Act.    ….. This means, the Consignee, etc., in the case of imports conducted through normal transactions between an overseas seller and a Japanese buyer
  • In the cases other than above, an importer is a person who has a right to disposition of the import cargo at the time of import declaration. If there is another person who acts on the purpose of the import*, that person is also included :

     In case of a cargo imported:
     – under lease contracts, a person who rents and uses the cargo.
     – for consignment sales, a person who sells the cargo in the name of himself/herself (consignee) by accepting the commission.
     – for processing or repairing, a person who processes or repairs the cargo.
     – for disposal, a person who disposes the cargo.

 

For additional information, please refer to the following resources:

 

 

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

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.
  • Security Export Control (Classification for List Control, Examination for Catch-All Control, Application of the license to Ministry of Economy, Trade and Industry)
  • Documents keeping, required under article 95 – Japan Customs Law
  • Providing professional trade/customs advice if any issues arise.

**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

 

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.

Please Be Careful

In cases where foreign corporations (non-residents) without an office in Japan import goods, failure to properly prepare an Importer of Record (IOR) through an Attorney for Customs Procedures (ACP) or similar means can result in goods being held at customs, leading to significant delays and costs. To avoid such risks, please make thorough preparations.

If an ACP is needed, it is crucial to utilize the services of an experienced ACP well-versed in customs-related laws and regulations. The import and export operations of non-residents/foreign corporations using an ACP are treated as unique cases. Many customs brokers are not familiar with these procedures, leading to incidents where goods are detained for extended periods due to unsuccessful explanations to customs. (Customs will not permit the import if the explanations provided by the importer or customs broker are unsatisfactory, resulting in the goods being detained until customs is convinced.)

We highly recommend utilizing our services as professional experts in customs, knowledgeable about customs-related laws and regulations. With a proven track record of resolving numerous issues through direct consultations with customs officers and customs brokers, our clients supported as an ACP now exceed 100 companies. We are committed to delivering industry-leading results with our expertise.

 

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. Our unwavering commitment ensures all our clients successfully acquire Japan IOR status and import goods seamlessly into Japan.
  • Handling Regulated Products – Our ACP/IOR partnership system can manage regulated items, including cosmetics, PSE-products, foodstuffs, and tableware.
  • Recognized ACP Service Provider on Amazon 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.

     

Restrictions on Handling by ACP in Japan – Our System Enables Us to Handle Regulated Items

Japanese Certain laws, such as the Pharmaceutical and Medical Products Act, the Electrical Appliance and Material Safety Act (PSE), the Consumer Product Safety Law (PSC), and the Food Sanitation Act, stipulate that importers must be corporations with a registered address in Japan, and thus restrict handling.

However, we have established a partnership system that enables us to arrange the Importer of Record (IOR) and Attorney for Customs Procedures (ACP) for regulated items, including cosmetics, PSE-regulated products, foodstuffs, and tableware.

While many ACP service providers do not handle such regulated items, our ability to handle those regulated items has become a competitive advantage of our company. Please consult with us for handling these regulated items.

 

 

How to determine the Import Declaration Value?

Primary determination method

The process of determining the Import Declaration Value of imported goods is known as “Customs Valuation.” In most cases, when an import is based on an “Import Transaction”※1 between an overseas seller and a buyer in Japan, the primary determination method can be utilized.

※1：An “Import transaction” refers to a transaction where a buyer in Japan engages in a sales transaction with an overseas seller for the purpose of shipping goods to Japan, and the goods subsequently arrive in Japan.

Under the primary determination method, the Customs value of the imported goods is determined as the transaction price paid by the buyer (CIF basis).

Customs Duty is calculated by multiplying the Customs Value (Transaction Value) by the Duty Rate, which varies depending on the HS code of the goods.

Consumption Tax, on the other hand, is calculated by multiplying the Customs Value plus Customs Duty by the Consumption Tax rate (currently 10%).

Exceptional determination method (e.g. when to use ACP)

In cases where a non-resident company imports goods into Japan without engaging in a sales transaction, the primary method cannot be utilized. Simply using an Invoice Value is not appropriate.

To calculate the Customs Value in such situations, it is necessary to apply the Exceptional Determination Method.

Within the exceptional determination method, several methods can be considered:

  • Transaction Value of Identical or Similar Goods Method: If you have previously imported goods that possess identical or similar conditions to the goods in question, the transaction value of those goods can be used.
  • Domestic Selling Price Method (Deductive Method): If you can identify the sales price (can be an estimated sales price), the domestic selling price method can be employed.
  • Cost of Production Method (Cost plus Method): If the exporter is a manufacturer and can provide production costs, the production cost method may be applicable.

If none of the above methods are suitable, “Other methods” are utilized as a flexible determination method, taking into account the calculation methods mentioned earlier.

In the practical scene, most of the cases we use this “Other methods” which is a determination method in a flexible way through considering the previously mentioned calculation methods.

Avoiding Customs Valuation Problems

In recent times, there have been numerous instances of trouble arising from incorrect Customs Value settings.

In the worst-case scenario, goods may fail to clear customs, resulting in significant detention fees and eventual return shipment.

At SK Advisory, we specialize in establishing appropriate Customs Values. We can assist in conducting consultations with Japan Customs on behalf of our clients, effectively avoiding any potential issues down the line.

For Amazon’s FBA business, there is a recommended calculation formula for the declaration value. If you would like to learn more about it, please don’t hesitate to contact us!

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?

Whereas many ACP service providers do not handle regulated items, our company’s competitive advantage stems from our ability to manage such products. We can support regulated items, including cosmetics, PSE-regulated products, foodstuffs, and tableware.

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).

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We’re a reliable ACP service provider for Amazon FBA’s seller

In recent, we’ve been supporting many import projects of goods related to the Amazon-FBA program. If you are looking for a reliable ACP service provider, please let us know.  

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Guidance by Amazon

According to the seller central website in Amazon, there is guidance by Amazon that a non-resident entity needs to appoint an ACP or IOR. You may check on this “Non-resident requirements”. Also, you can check the document developed by Amazon “Understand ACP and IOR guidance”.   —–

Our ACP Service (Attorney for Customs Procedures)

Contact us

—–

[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

Limitation on Handling by ACP in Japan – Our System Enables Us to Handle Regulated Items

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)

ACP

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

As previously mentioned in another article (“Announcement from Japan Customs | Mandatory to use ACP in Many Cases – Attorney for Customs Procedure”),

from October 2023, overseas sellers, especially those on e-commerce platforms like Amazon, Rakuten, and Shopify, are now necessary to utilize ACP and become the Importer of Record (IOR) themselves. Therefore, schemes involving designating other Japanese corporations as the IOR are no longer feasible. Despite clear directives to this effect, we observe certain IOR businesses providing unauthorized IOR services.

The prevalence of such questionable practices necessitates this article as a cautionary note. Sellers operating in Japan must strive to understand and comply with the correct legal framework and avoid unnecessary penalty.

 

 

Problematic Practices – Violation of Customs Laws

There are instances where transactions seem to exist between overseas businesses and Japanese IORs (who are merely importers in name), with manipulated documents like invoices reflecting undervalued declared prices for customs clearance. In reality, these goods are not directly shipped to fulfillment centers like Amazon but temporarily stored in domestic warehouses. Here, they are labeled before being sent to the final fulfillment destination. This scheme aims to avoid detection by customs as e-commerce products. Such actions are illegal and not in compliance with the law, and I strongly urge an immediate cessation of these practices.

Importing through illegal schemes often leads to undervalued import declarations. Even if customs clearance is initially granted, subsequent Post Clearance Audit by customs can lead to substantial penalties. Legally, the IOR is liable for these payments, which can lead to disputes between overseas sellers and IOR businesses. Typically, the financial burden of import duties and taxes falls on the overseas sellers, making conflicts predictable.

Both the uninformed overseas businesses using these illegal schemes and the IOR operators bear responsibility.

Observing extremely low prices for products by overseas sellers on e-commerce platforms like Amazon often gives an impression of an unfair competitive environment. Legitimate overseas businesses pay appropriate taxes and add these costs to their selling prices, putting them at a disadvantage against sellers who avoid proper tax payments. This unfairness is precisely why the customs system was revised in October 2023.

For businesses with low compliance awareness, the issues likely extend beyond just declared values. Often, they might also be non-compliant with intellectual property laws and other regulations.

 

 

 

Concerns Over Cost Impact of Customs Valuation/Import Declarations

When overseas sellers import goods for e-commerce into Japan, whether through ACP or as the another IOR company, there is no “import transaction” with a Japanese buyer, leading to the exceptional determination method for declared import values, typically based on the domestic selling price.

There are concerns about high valuation leading to excessive duties and taxes. However, this is a determination method based on the Customs Tariff Law, which must be adhered to. The cost impact of the valuation is not as significant as often feared.

The taxes on import are mainly customs duties and consumption tax. Japan’s import tariffs are relatively low on a global scale, and many industrial products are duty-free. As for consumption tax, which is a uniform 10%, it is an indirect tax borne by the final consumer, not a cost for the overseas seller. Taxable businesses regularly file consumption tax returns to the tax office, adjusting the tax paid on imports against the tax collected from sales, neutralizing the cost impact. However, this necessitates that the overseas business itself becomes the importer, achievable only through using ACP.

With the start of the consumption tax invoice system in October 2023, many overseas businesses might have registered as qualified invoice-issuing entity. For B2C businesses, registration as a qualified invoice-issuing entity is not always necessary, but many companies seem to register without fully understanding the system. I recommend that overseas businesses seek advice from qualified professionals to navigate these changes correctly.

 

As seasoned experts in customs and trade facilitation, we at ACP JAPAN are here to navigate these complexities on your behalf. Our approach, grounded in professionalism and profound regulatory knowledge, ensures a seamless, compliant, and strategic entry into Japan’s vibrant market.

We invite you to reach out to us — let’s discuss how we can support your business’s successful and compliant expansion into Japan. Your peace of mind is our top priority.

We look forward to your inquiry!

 

 

 

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

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.
  • Security Export Control (Classification for List Control, Examination for Catch-All Control, Application of the license to Ministry of Economy, Trade and Industry)
  • Documents keeping, required under article 95 – Japan Customs Law
  • Providing professional trade/customs advice if any issues arise.

**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

 

 

 

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. Our unwavering commitment ensures all our clients successfully acquire Japan IOR status and import goods seamlessly into Japan.
  • Handling Regulated Products – Our ACP/IOR partnership system can manage regulated items, including cosmetics, PSE-products, foodstuffs, and tableware.
  • Recognized ACP Service Provider on Amazon 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.

     

Please Be Careful

In cases where foreign corporations (non-residents) without an office in Japan import goods, failure to properly prepare an Importer of Record (IOR) through an Attorney for Customs Procedures (ACP) or similar means can result in goods being held at customs, leading to significant delays and costs. To avoid such risks, please make thorough preparations.

If an ACP is needed, it is crucial to utilize the services of an experienced ACP well-versed in customs-related laws and regulations. The import and export operations of non-residents/foreign corporations using an ACP are treated as unique cases. Many customs brokers are not familiar with these procedures, leading to incidents where goods are detained for extended periods due to unsuccessful explanations to customs. (Customs will not permit the import if the explanations provided by the importer or customs broker are unsatisfactory, resulting in the goods being detained until customs is convinced.)

We highly recommend utilizing our services as professional experts in customs, knowledgeable about customs-related laws and regulations. With a proven track record of resolving numerous issues through direct consultations with customs officers and customs brokers, our clients supported as an ACP now exceed 100 companies. We are committed to delivering industry-leading results with our expertise.

 

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?

Whereas many ACP service providers do not handle regulated items, our company’s competitive advantage stems from our ability to manage such products. We can support regulated items, including cosmetics, PSE-regulated products, foodstuffs, and tableware.

 

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).

 

—–

[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

Limitation on Handling by ACP in Japan – Our System Enables Us to Handle Regulated Items

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)

 

 

ACP

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

For Foreign Corporations Without a Base in Japan:

We are informing you about the two new systems that commences in October 2023. These systems are distinct and must be approached separately. However, there are aspects where they intersect and must be understood collectively. Here’s a detailed breakdown:

 

Japan Customs has clarified the definitions of Importers, necessitating the shift from using IOR Providers to ACP (Attorney for Customs Procedures) in numerous instances

Since October 2023, Japan Customs mandated that foreign corporations (non-residents) without a presence in Japan must act as importers themselves in many situations. Utilizing another company to serve nominally as the importer, such as an IOR service provider, will no longer be an option.

To comply with these regulations, foreign corporations lacking a Japanese base need to appoint an ACP (Attorney for Customs Procedures), making the ACP system essential for their operations.

 

 

Why this System Change?

There have been instances where foreign corporations, along with importing agents unfamiliar with customs laws or lacking proper compliance awareness, have collaborated. Such collaborations often result in the failure to accurately pay the necessary duties and consumption taxes upon importation by utilizing undervalued invoices, almost simulating a sales transaction. To address this issue, Japan Customs now instructs foreign corporations to engage with ACP. Using ACP mandates that commercial distribution transaction details be presented to the customs office, ensuring the declaration of an appropriate import value.

Typically, the import declaration value is derived by subtracting certain domestic costs from the projected domestic sales price, in line with the Japanese Customs Tariff Law. However, we believe there’s no significant cause for concern regarding this value. Japan’s tariff rate is relatively low on an international scale, and the import consumption tax is primarily a “tax borne by the end consumer”. Though a 10% consumption tax is required at the point of import, it can be recouped from customers during sales. If a tax return is accurately filed, any overpayments will be refunded.

Moreover, to claim credits for the consumption tax on purchases (paid upon importation), the seller—a foreign corporation—must assume the role of an importer. Alongside appointing an ACP, foreign entities should also designate a tax accountant to act as a tax agent. This ensures the accurate filing of consumption tax returns with the tax office.

As seasoned ACP professionals, we lead consultations with Japan Customs proactively to guarantee seamless import customs clearance and oversee the determination of import declaration values, among other critical aspects. Our expertise extends to countless import/export projects, and we pride ourselves on a flawless record of customs clearance.

 

 

Related Readings:

 

 

 

Qualified Invoice System (QIS) for Japan Consumption Tax (JCT)

The forthcoming alteration pertains to the national tax system.

The advent of the consumption tax invoice system means a surge in overseas companies becoming consumption tax invoice issuers. For Japanese customer (buyer) during a consumption tax return filing must emanate from a registered invoice issuing entity, otherwise the Japanese customer can not claim the purchase tax credit on the consumption tax paid to a seller. 

Should an overseas company opt to become an invoice issuing entity, it is automatically becoming as a taxable entity for consumption tax. This necessitates the submission of a periodical consumption tax return with the tax authorities. Therefore, companies are urged to carefully consider whether they cater to B2C consumers (typically not filing consumption tax returns) or B2B entities (usually filing such returns), before deciding on registration.

 

 

For the case of a non-resident entity (Company-A), when Company-A imports and sells to customers in Japan, following 3 steps are the standard procedure.

(1) Pay import JCT to a customs office, 10% of the import customs value when Company-A imports.
<PAY TO CUSTOMS OFFICE>
(2) Obtain JCT from a customer in Japan, 10% of the sales price when Company-A sells
(3) Submit JCT tax return
   (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 input JCT (import consumption tax) at the time of tax filing mentioned above (3). 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 input JCT (import consumption tax). Therefore, you have to pay all the amount of (2) to a tax office (mentioned above (3-2).

On the other hand, by importing with ACP and becoming the IMPORTER, you can deduct the input JCT (import consumption tax) when filing JCT tax returns as mentioned above (3). Therefore, you would only need to pay the difference amount (2) – (1) to a tax office (as mentioned above (3-1).

This is one of the significant advantages of using the ACP service instead of the IOR service.

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

 

Related Readings:

 

 

 

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

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.
  • Security Export Control (Classification for List Control, Examination for Catch-All Control, Application of the license to Ministry of Economy, Trade and Industry)
  • Documents keeping, required under article 95 – Japan Customs Law
  • Providing professional trade/customs advice if any issues arise.

**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

 

 

 

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.

 

Please Be Careful

In cases where foreign corporations (non-residents) without an office in Japan import goods, failure to properly prepare an Importer of Record (IOR) through an Attorney for Customs Procedures (ACP) or similar means can result in goods being held at customs, leading to significant delays and costs. To avoid such risks, please make thorough preparations.

If an ACP is needed, it is crucial to utilize the services of an experienced ACP well-versed in customs-related laws and regulations. The import and export operations of non-residents/foreign corporations using an ACP are treated as unique cases. Many customs brokers are not familiar with these procedures, leading to incidents where goods are detained for extended periods due to unsuccessful explanations to customs. (Customs will not permit the import if the explanations provided by the importer or customs broker are unsatisfactory, resulting in the goods being detained until customs is convinced.)

We highly recommend utilizing our services as professional experts in customs, knowledgeable about customs-related laws and regulations. With a proven track record of resolving numerous issues through direct consultations with customs officers and customs brokers, our clients supported as an ACP now exceed 100 companies. We are committed to delivering industry-leading results with our expertise.

 

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. Our unwavering commitment ensures all our clients successfully acquire Japan IOR status and import goods seamlessly into Japan.
  • Handling Regulated Products – Our ACP/IOR partnership system can manage regulated items, including cosmetics, PSE-products, foodstuffs, and tableware.
  • Recognized ACP Service Provider on Amazon 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?

Whereas many ACP service providers do not handle regulated items, our company’s competitive advantage stems from our ability to manage such products. We can support regulated items, including cosmetics, PSE-regulated products, foodstuffs, and tableware.

 

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).

 

—–

[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

Limitation on Handling by ACP in Japan – Our System Enables Us to Handle Regulated Items

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)

 

 

ACP

Importing Tech Goods to Japanese Data Centers

The increasing demand for importing and delivering goods to data centers in Japan is largely driven by the tech and AI boom. Often, clients, who are non-resident companies, seek to deliver goods—either their own or their end-clients’—to these data centers without making a sale. To facilitate this, the clients need to handle the import process into Japan on their own.

However, there’s a challenge: Japanese Customs mandates that only resident entities can act as importers. This is where the ACP – Attorney for Customs Procedures comes into play. It allows non-resident entities to act as the Importer of Record (IOR), bridging the gap in this process.

At ACP Japan, we possess a wealth of experience in supporting the import and delivery of goods to data centers. Typically, products shipped to these data centers are non-regulated items like servers, switches, transceivers, cables, and more. We’re here to assist you with your needs. Please don’t hesitate to reach out to us.  

 

 

 

   

Japanese Customs System Reform (Instruction to use ACP)

Due to the increasing occurrence of cases where foreign entities attempt to import goods by falsely designating third parties such as forwarders or customs agents as importers, starting from October 1, 2023, a system reform has been implemented to address this issue. The Japanese Customs authorities request foreign entities to comply with the law and use Attorney for Customs Procedures to act as importers.

Japan Customs: Revision of Import Declaration Items and Attorney for Customs Procedure (ACP) System

English: Announcement from Japan Customs | Directive to use ACP – Attorney for Customs Procedure 

 

 

 

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

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.
  • Security Export Control (Classification for List Control, Examination for Catch-All Control, Application of the license to Ministry of Economy, Trade and Industry)
  • Documents keeping, required under article 95 – Japan Customs Law
  • Providing professional trade/customs advice if any issues arise.

**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

 

 

 

 

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. Our unwavering commitment ensures all our clients successfully acquire Japan IOR status and import goods seamlessly into Japan.
  • Handling Regulated Products – Our ACP/IOR partnership system can manage regulated items, including cosmetics, PSE-products, foodstuffs, and tableware.
  • Recognized ACP Service Provider on Amazon 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.

     

 

Please Be Careful

In cases where foreign corporations (non-residents) without an office in Japan import goods, failure to properly prepare an Importer of Record (IOR) through an Attorney for Customs Procedures (ACP) or similar means can result in goods being held at customs, leading to significant delays and costs. To avoid such risks, please make thorough preparations.

If an ACP is needed, it is crucial to utilize the services of an experienced ACP well-versed in customs-related laws and regulations. The import and export operations of non-residents/foreign corporations using an ACP are treated as unique cases. Many customs brokers are not familiar with these procedures, leading to incidents where goods are detained for extended periods due to unsuccessful explanations to customs. (Customs will not permit the import if the explanations provided by the importer or customs broker are unsatisfactory, resulting in the goods being detained until customs is convinced.)

We highly recommend utilizing our services as professional experts in customs, knowledgeable about customs-related laws and regulations. With a proven track record of resolving numerous issues through direct consultations with customs officers and customs brokers, our clients supported as an ACP now exceed 100 companies. We are committed to delivering industry-leading results with our expertise.

 

Japan Qualified Invoice System and Compliance JCT (Japan Consumption Tax)

Recently, many companies have been registering as Qualified Invoice Issuers for Japanese Consumption Tax (JCT) due to the new invoice system introduced in October 2023. This new system is similar to the EU’s VAT invoice system.

After October 2023, your Japanese customer can’t claim input JCT 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.

Before October 2023:

Any customer (Company-B) who paid for goods or services could deduct input JCT regardless of whether the seller (Company-A) was registered for JCT. There was no requirement to verify the tax status of the seller.

After October 2023:

Any customer (Company-B) can only deduct input JCT if Company-A, the seller, is registered and can provide a qualified invoice with a JCT registration number. If Company-A cannot issue such an invoice, Company-B may choose not to continue purchases from them.

If Company-A sells only to consumers and not businesses, it may not need to issue qualified invoices since consumers typically do not claim JCT tax returns.

Once Company-A obtains a JCT invoice registration number, it becomes a taxable entity required to file JCT returns regularly.

For non-resident entities (Company-A) importing and selling in Japan, the standard procedure involves three steps:

  1. Pay import JCT to customs: 10% of the import customs value.
  2. Collect JCT from customers in Japan: 10% of the sales price.
  3. File a JCT tax return and pay the net JCT to the tax office.

If Company-A paid the import JCT as the importer using an Attorney for Customs Procedures (ACP), they need only pay the net amount of sales JCT minus import JCT.

If Company-A paid the import JCT but was not the importer, they must pay all the collected sales JCT without deducting the import JCT.

Therefore, using an ACP to act as the Importer of Record (IOR) is crucial for managing JCT deductions and refunds. If another company acts as the IOR, you cannot deduct the import JCT, resulting in significant costs.

We strongly recommend using our ACP services to ensure you can act as IOR, optimizing your JCT handling. Our team has extensive experience helping clients become importers and successfully manage their JCT responsibilities. You can rely on our expertise to navigate these complexities.

 

 

 

 

Japanese Customs System Reform: Clarification of Importer Definitions

Starting October 1, 2023, Japanese Customs has instituted a pivotal reform aimed at addressing the issue of foreign sellers improperly designating third parties (such as forwarders or customs agents) as importers.

This revision necessitates foreign corporations to utilize an Attorney for Customs Procedures (ACP) to assume the role of Importer of Record (IOR) directly in many cases. The practice of merely nominally appointing another entity as the importer is no longer feasible.

Notably, foreign corporations that act as importers themselves, through the engagement of ACP, are eligible for Japan Consumption Tax (JCT) benefits. (link: Consumption Tax Treatment and Benefits of Using ACP).

As a dedicated ACP firm, we ensure compliance with the law to facilitate correct import procedures, allowing you to trust us with your importation requirements confidently. We are eager to engage in further discussions with you.

 

Revisions Effective October 1, 2023:

Definition of the Importer

  • Regarding a cargo imported under import transaction, an importer is equivalent to “a person who imports a cargo” defined in Article 6-1 (1), General Notification of the Customs Act.    ….. This means, the Consignee, etc., in the case of imports conducted through normal transactions between an overseas seller and a Japanese buyer
  • In the cases other than above, an importer is a person who has a right to disposition of the import cargo at the time of import declaration. If there is another person who acts on the purpose of the import*, that person is also included :

     In case of a cargo imported:
     – under lease contracts, a person who rents and uses the cargo.
     – for consignment sales, a person who sells the cargo in the name of himself/herself (consignee) by accepting the commission.
     – for processing or repairing, a person who processes or repairs the cargo.
     – for disposal, a person who disposes the cargo.

 

For additional information, please refer to the following resources:

 

Contact us

 

 

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?

Whereas many ACP service providers do not handle regulated items, our company’s competitive advantage stems from our ability to manage such products. We can support regulated items, including cosmetics, PSE-regulated products, foodstuffs, and tableware.

 

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).

 

 

—–

[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

Limitation on Handling by ACP in Japan – Our System Enables Us to Handle Regulated Items

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)