IOR stands for, Importer of Record. That is the same as the meaning of an importer. When you export goods to Japan, for import, there must be an Importer of Record (IOR) in place. The importer has responsible to pay the consumption tax, customs duties at the time of import. Also, the importer should take responsibility for the compliance issues regarding Japanese laws and regulations for imported goods.
Let’s look at the case who will become IOR in the non-resident import. When a non-resident entity wants to ship their goods to Japan, there are mostly two ways to import the goods into Japan. The first way is to use a Japanese resident IOR service provider who can become the IOR. In this case, the non-resident entity will be a shipper, and the IOR service provider will be an importer.
The second way is to use a Japanese resident ACP service provider who can act as ACP – Attorney for Customs Procedure. Normally, Japan Customs does not permit a non-resident entity to become an IOR. But, if the non-resident entity appoints an ACP, then the non-resident can become IOR him/herself. In this case, the non-resident entity will be both shipper and importer.
The non-resident entity can select one of these two options, using IOR service provider, or ACP service provider. If you would like to know more about what the merits and demerits are of using the ACP or IOR, please contact us by the link provided in the following summary section.
YouTube – What is IOR? – Importer of Record
Is IOR the same as Consignee?
It’s not the same, but you can be both IOR (Importer) and Consignee when you import into Japan. IOR is the entity to import and owe the liability for tax payment, whereas the consignee means the entity who has the ownership of the imported goods at the time of the import.
If you use ACP (Attorney for Customs Procedure), you can be IOR and Consignee if you own the goods.
- 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.
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.
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 link:
A Fulfillment by Amazon (FBA) seller who lives outside of Japan (non-residents) and would like to import goods into an Amazon Japan fulfillment center for storage and order fulfillment must first designate an Import of Record (IOR) and /or Attorney for Customs Procedure (ACP). This must be accomplished in advance of any importations. In general, any person who is a resident of Japan can be appointed as an IOR and/or ACP. Neither Amazon nor any of its entities in Japan may act as the IOR/ACP on the customs declaration, only the FBA seller or their designated IOR/ACP. Amazon, Seller Central, Japan Tax and Regulatory Considerations
Also, you can check the document developed by Amazon “Understand ACP and IOR guidance”.
Understand ACP and IOR
If you do not have a Japanese entity to act as the importer of record, it is mandatory that you appoint an Attorney for Customs Procedure (ACP). Overseas Sellers, as non-resident importers, can generally rely on a program called ACP to help bring their inventory into Japan. An ACP is a resident Japanese entity who registers with Japan Customs as your agent to help with entries and communications. Please note ACP does not fully take over the whole responsibility of an importer. You must ensure that your goods comply with the local laws and regulations as a part of your responsibility. Amazon, Understand ACP and IOR guidance