IOR and ACP – Import to Japan

As we receive questions often what the difference between ACP and IOR, prepared this page to help you understand ACP and IOR.

What is IOR – Importer of Record

When you send goods to Japan, for import, there must be an Importer of Record (IOR) in place.

The importer, in principle, shall be a Japanese resident person/entity who’s responsible for taxes, customs duties as well as import related regulations.

Unlike other regions, Japan Customs does not permit a foreign entity to act as IOR.

But if the foreign entity apponts ACP (Attorney for Customs Procedure), the entity can be Non-Resident Importer (IOR) then you can import by yourself.

When need an ACP – Attorney for Customs Procedure

If you (non-resident shipper) can’t find an anyone/entity in Japan that can act as IOR, you’ll need to act as a Non-Resident Importer. But, in this case you must appoint an Attorney for Customs Procedure.

In other words, you can import by yourself by appointing ACP, even if you don’t find any entity can be the IOR in Japan.

If you are looking for an entity as being IOR, ACP can be a solution! We provide the service as being ACP, on behalf of a non-resident clients we support by ensuring the import customs procedure.

ACP’s advantage

One of the advantages of using ACP over the IOR service provider is related to Consumption Tax issues. You may visit our site: 2 – Consumption Tax , and please take a look at the Taxable Entity. If your entity is a Taxable Entity, it would be recommendable to use ACP rather IOR service provider. Because your entity can deduct the import consumption tax when you file the tax return. Whereas, if your entity is a Tax-exempt Entity, using ACP or IOR service provider does not have such differences. 

 

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

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

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

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

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

 

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

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

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

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

 

Our strengths

  • Professional of Customs and International Trade – The CEO, as a Certified Customs Specialist in Japan – Mr. Sawada has been providing consulting services in the Trade & Customs area for many years. He was in a management position at KPMG, then started with his own company – SK Advisory to continue the customs-related services to the international clients.
  • Fully compliance in accordance with Japanese Customs Law – Maintaining the service quality with full compliance with Japanese Customs Law. ACP Japan is capable to manage all the necessary import compliance issues, including the classification of HS code, and setting of the appropriate Customs Valuation of the import goods to Japan.
  • Experienced and credible partner – As ACP Japan has been providing ACP services to many clients as demand has increased, you can totally rely on us as a credible partner. We registers 40+ ACP customers every year, the customers from around the world. In this way, all customers successfully became non-resident IOR – Importer of Record in Japan. You can see a list of our customers in here “Experiences”.
  • Qualified ACP service provider in Amazon SPN (Service Provider Network) – ACP Japan has officially become a qualified ACP service provider in Amazon’s Service Provider Network (SPN) under the Compliance category.

     

Our Customers

You can also check our YouTube video, explaining what ACP is.

You can also check our YouTube video, explaining what IOR is.

 

How the Japanese New Invoice System affects?

Recently, many companies register JCT because the new invoice system for Japanese consumption tax (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 are written a JCT number. To issue a qualified invoice, sellers(suppliers) need to be a taxable entity and get a JCT number.

However, if your customers are just consumers, not business entities, then it wouldn’t have to issue such qualified invoices, so in such cases, you wouldn’t have to registrer as taxable entity, as long as your company is satisfying the requirements for the exempt entity. 

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

On the other hand, if you import using ACP, means that you became an IMPORTER thus you can deduct the import consumption tax. This is one of the significant advantages to use ACP service, not IOR service. For this JCT reason, we strongly recommend using ACP so that you can become IOR.

 

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

Guidance by Amazon

According to the seller central website in Amazon, there is a guidance by Amazon that 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)

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