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Explanation: The consumption tax deduction applies to taxable purchases made domestically and to taxable cargo withdrawn from bonded areas.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).
Our Japan Consumption Tax (JCT) Representative Services
At ACP JAPAN, we provide a comprehensive one-stop service that covers both customs procedures through the Attorney for Customs Procedures (ACP) and Japan Consumption Tax (JCT) procedures with the National Tax Agency through a designated JCT Tax Representative.
By working closely with our trusted partner tax accountants, we act as your ACP while maintaining close coordination and information sharing with the tax representative. This collaboration ensures the proper deduction and refund of Japan Consumption Tax paid at the time of importation.
Track Record – Attorney for Customs Procedures (ACP) Services
We have supported import and export operations in Japan for over 200 clients across more than 40 countries.
Examples of International Logistics Partners We Have Worked With
We have a proven track record of working with a wide range of logistics providers. As the Attorney for Customs Procedures (ACP), we handle customs-related responsibilities while logistics companies manage transportation and warehousing operations.
- Apex International
- Brink’s
- CEVA Logistics
- Coshipper
- Crane Worldwide Logistics
- DB Schenker
- DGX (Dependable Global Express)
- DHL Express
- DHL Global Forwarding
- Dimerco
- DSV Air & Sea
- Expeditors
- FedEx Express
- FERCAM
- GOTO KAISOTEN Ltd.
- Harumigumi
- Herport
- ICL Logistics
- JAS Forwarding
- Kintetsu Express
- Kokusai Express
- Kuehne + Nagel
- Mitsubishi Logistics
- MOL Logistics
- Nankai Express
- Nippon Express
- OIA Global
- PGS
- Rhenus Group
- Röhlig
- Sankyu
- Sanyo Logistics
- Scan Global Logistics
- Seino Schenker
- SEKO Logistics
- Shin-Ei gumi
- Shiproad
- Sumitomo Warehouse
- UPS
- UPS Supply Chain Solutions
- Yamato Transport
…and many other logistics providers in Japan and around the world.