October 2023: Introduction of Two New Systems in Japan - (1) ACP: Attorney for Customs Procedures & (2) QIS: Japan Consumption Tax's Qualified Invoice System | ACP JAPAN - Attorney for Customs Procedures

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.

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.

What Is a JCT Tax Representative and Why Is It Required?

When a non-resident foreign entity becomes subject to Japan’s Consumption Tax (JCT), it is required to appoint a JCT Tax Representative (Tax Agent).

If a non-resident company sells goods to customers in Japan, it typically collects 10% consumption tax on those sales. This collected JCT must be reported and submitted to the Japanese National Tax Office, unless the entity qualifies as a tax-exempt business. (See: “Are we a Tax-Exempt Business?”)

If the entity is JCT-liable—or voluntarily registers as a taxable entity, such as by obtaining a Qualified Invoice Issuer Number—it must appoint a JCT Tax Representative to handle all tax-related procedures in Japan, including JCT tax filings. In the JCT tax return process, the paid import JCT can be offset against the collected JCT.

If the import JCT exceeds the collected amount, the difference may be refunded.
If the collected JCT exceeds the import amount, the difference must be paid to the tax office.

A JCT Tax Representative is legally required to manage this process on behalf of the foreign entity. Please note: The JCT Tax Representative is distinct from the Attorney for Customs Procedures (ACP), which is appointed for customs clearance purposes.

ACP = Customs representative
JCT Tax Representative = Tax representative

Our Japan Consumption Tax (JCT) Representative Services

At SK Advisory Inc., 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.

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: :

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

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
Crane Worldwide Logistics
DB Shenker
DGX（Dependable Global Express）
DHL Express
DHL Global Forwarding
Dimerco
DSV Air & Sea
Expeditors
FedEx Express
FERCAM
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
Sumitomo Warehouse
UPS
UPS Supply Chain Solutions
Yamato Transport

…and many other logistics providers in Japan and around the world.

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 200 companies. We are committed to delivering industry-leading results with our expertise.

Why choose us?

We specialize in navigating complex issues at the intersection of customs procedures and taxation—an area where our ability to offer practical, comprehensive support from both perspectives sets us apart. Understanding the close relationship between customs duties and national taxes (especially, Japan Consumption Tax – JCT), and addressing both in an integrated manner, is crucial in the context of international trade.

Customs and International Trade Professionals – Led by our CEO, Mr. Sawada—Certified Customs Specialist and former KPMG professional—ACP JAPAN provides expert-level support in Customs and international trade.
Full Compliance with Japanese Customs Law – We ensure full adherence to Japanese Customs Law, including Importer of Record (IOR) structure, HS code classification, and customs valuation. We assist in preparing all essential shipping documents for non-resident entities.
One-Stop Support for ACP and JCT Tax Representative Services – In collaboration with trusted partner tax accountants, we provide comprehensive support for both customs procedures through the Attorney for Customs Procedures (ACP) and Japan Consumption Tax (JCT) filings through the JCT Tax Representative.
Multilingual Communication – Our team communicates fluently in English, Japanese, and Chinese, offering smooth coordination with global clients and authorities in Japan.
Support for Regulated Products – Our ACP/IOR partnership system can manage regulated items, including cosmetics, PSE-products, foodstuffs, and tableware.
Trusted by Global Clients – Serving around 100 ACP clients annually, including many Amazon sellers, we’re a certified provider on Amazon SPN (Service Provider Network) under Trade Compliance.

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.