Customs Valuation - Import by Japan ACP – Japan IOR

Customs Valuation: Determining the Import Declaration Value

Please note that an invoice value cannot automatically be used as the customs value for import declaration purposes.

Primary Determination Method

In general, the primary method of customs valuation in Japan is the transaction value method, which is based on the price actually paid or payable for the imported goods, adjusted to a CIF basis. This is referred to as the principal method of determination under Article 4, Paragraph 1 of the Customs Tariff Act of Japan.

However, this method can be used only where there is an “import transaction” under the Customs Tariff Act. In general, an “import transaction” requires both of the following conditions:

1. There is a sale/purchase transaction for the goods being imported into Japan; and
2. The buyer is located in Japan.

For example, where goods are sold by an overseas seller to a Japanese buyer/importer, and the Japanese buyer imports the goods into Japan, the CIF-adjusted sales price may generally be used as the declared customs value.

On the other hand, if a foreign importer purchases goods from an overseas supplier before importing them into Japan, that overseas purchase price cannot normally be used as the customs value for the Japanese import declaration. This is because there is no import transaction involving a buyer located in Japan.

If your case does not meet the above requirements, the customs value must be determined using one of the alternative valuation methods provided under Article 4-2 and the following provisions of the Customs Tariff Act. Please see section below for Exceptional Determination Method.

Customs duty is generally calculated by multiplying the customs value by the applicable duty rate, which varies depending on the HS code of the goods.

Import consumption tax is generally calculated by multiplying the customs value plus customs duty by the applicable consumption tax rate, which is currently 10%.

Exceptional Determination Method

In cases where a non-resident company imports goods into Japan and the above requirements are not met, the primary valuation method cannot be applied. In such cases, simply using the invoice value as the customs value is not appropriate.

To determine the customs value in these situations, it is necessary to apply one of the alternative valuation methods provided under Japanese customs law.

Several methods may be considered under the alternative valuation framework, including:

• 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 practice, in most cases, we use this “Other Methods” approach, which allows the customs value to be determined flexibly by considering the previously mentioned calculation methods.

One example of this “other methods” approach is the valuation method commonly used for Amazon FBA import cases. This is a type of deductive method based on the estimated selling price in Japan.

For more details, please see: “Amazon FBA Japan: Import Deductive Valuation Method.”

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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!

🔗 How to Determine Import Value for Amazon FBA

Customs Value Affects Import Taxes

The customs value directly impacts the amount of import taxes. That said, Japan’s low tariff rates mean that valuation primarily affects the Japan Consumption Tax (JCT) rather than customs duties. As noted, if you are properly registered as the Importer of Record (IOR) and have appointed a JCT Tax Representative, the JCT is recoverable and not a cost to your business. Therefore, there is generally no need to be overly concerned about the declared value.

Import Taxes: Customs Duties and JCT

There are two main types of import taxes in Japan:

▶ Customs Duty:

Tariff rates vary depending on the HS code; however, most industrial products are either duty-free or subject to low rates in Japan. You can check tariff rates at Japan Customs Website: JP Tariff Rates

▶ Japan Consumption Tax (JCT):

JCT is set at a fixed rate of 10%. JCT is calculated as 10% of the total import declaration value plus customs duty. For more detailed information about JCT, please visit our webpage: Consumption Tax

Tax Filing and Payment to the Tax Office

After importing goods, you are allowed to collect 10% Japan Consumption Tax (JCT) from customers upon domestic sales. If you are a JCT-exempt entity, no further action is required.
If you are a JCT-taxable entity, you must file a JCT tax return with the local tax office and pay the collected sales JCT. During this process, you may deduct or claim a refund of the JCT paid at the time of import.

Only the Importer of Record Can Claim Input Tax Credit

The right to claim an input tax credit for import JCT belongs exclusively to the Importer of Record (IOR). This is why appointing an Attorney for Customs Procedures (ACP) is critical. If the foreign company does not act as the importer—such as when a third party is listed as the IOR—the company may lose the right to reclaim the import JCT, resulting in a significant financial loss.

Compliance with the Japanese Invoice System

Since October 2023, Japan has implemented a new JCT Invoice System, similar to the European VAT compliance framework. Foreign sellers must consider whether to register as a Qualified Invoice Issuer, particularly when selling to JCT-registered buyers in Japan. If a foreign seller is not registered as a Qualified Invoice Issuer, the buyer may be unable to fully claim input JCT through their JCT tax return.

To maintain good business relationships, it is often advisable to register proactively. However, once registered as a Qualified Invoice Issuer, you can no longer be treated as a tax-exempt entity and must begin filing and paying JCT accordingly.

Necessary to Appoint a Tax Representative

To complete this process—registration and JCT filing—a Tax Representative (usually a certified Japanese tax accountant) must be appointed separately from the ACP.

We work closely with trusted tax professionals to provide comprehensive, one-stop support for both ACP and JCT Tax Representative services.

🔗 Customs and JCT Overview

🔗 All about Import JCT

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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—SK Advisory provides expert-level support in Customs and international trade. Mr. Sawada also serves as an external expert for the World Bank’s B-READY project in the field of 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 ACP and JCT Tax Representative Service - SK Advisory can introduce our partner tax accountants who can act as the JCT Tax Representative for the non-resident entity. They can assist with obtaining a tax identification number, registering for a Qualified Invoice Issuer Number, and handling ongoing JCT tax filings. During the JCT tax return process, the non-resident entity may claim a refund of the import JCT; however, only the importer of record (IOR) is eligible to do so. Therefore, utilizing our ACP service is important to ensure that the non-resident entity is properly designated as the IOR and able to claim the import JCT accordingly.
• 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.

Track Record – Japan ACP Services (Attorney for Customs Procedures / Customs Procedure Agent)

We have supported import and export operations in Japan for over 300 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.

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

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

ACP is an effective solution for addressing Importer of Record (IOR) and Exporter of Record (EOR) requirements in Japan. Through our ACP service, non-resident entities located outside Japan are able to import and export goods as Non-Resident IOR and EOR.

Below is an overview of our basic scope of work, together with a diagram illustrating the operational structure of the ACP service. Once ACP registration is completed, the non-resident entity can act as the Importer of Record (IOR) and Exporter of Record (EOR) in Japan.

Scope of Work – How We Can Assist

• Preparation and filing of all required documents for ACP registration with Japan Customs.
• Coordination and communication with relevant stakeholders, including Japan Customs, logistics providers, and customs brokers to ensure smooth and compliant export and import procedures.
• Preparation and review of export and import documentation, including commercial invoices and shipping documents.
  Proper customs clearance requires accurate identification and statement of the shipper, consignee / Exporter of Record (EOR), and Importer of Record (IOR) on B/L, AWB, and Commercial Invoice. We provide practical guidance on correct documentation practices.
• Advisory on customs valuation (export and import declaration value) and supporting documentation, HS classification, duty rates, and country of origin (including advance rulings), to ensure compliance with Japanese customs requirements.
• Import compliance support for regulated products, including Domestic Administrator (sometimes referred to as "Domestic Representative") Services under the Product Safety Acts (PSE/PSC) and food-related products regulated under the Food Sanitation Act.
• Export Control / Security Trade Control Support (assistance in preparing non-applicability certificates for items the exporter has determined to be non-controlled, and transaction screening, including catch-all controls, etc.)
• Maintenance and retention of records required under the Japan Customs Law.
• Provision of professional trade and customs advisory services to address and resolve issues that may arise during export or import operations.

**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 Procedures) to Japan Customs: This process is generally completed in about two weeks.

3. Initiation of First Shipment, Import/Export

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FAQ for ACP (Attorney for Customs Procedures)

What is the role of ACP (SK Advisory)?

• Representation: ACP (SK Advisory) 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 does it take to complete ACP registration?

It will take approximately 2 weeks until receiving approval from Japan Customs. The breakdown of the task is as follows.

• Prepare the necessary documentation in coordination between the client and SK Advisory
• Start pre-consultation with Japan Customs and proceed with the initial review
• Submit a paper-based set of application documents to Japan Customs for final review

What documents are required for ACP application?

For example, but not limited to: a Power of Attorney, company registry documents, the calculation method for customs valuation, product catalogs for the imported goods, and the business/logistics flow.

ACP can handle all kinds of goods?

While many ACP service providers do not handle the regulated items, our ability to handle those regulated items has become a competitive advantage of our company. We can support the items including cosmetics, PSE-regulated products, foodstuffs, and tableware.

Which regions in Japan are we covering?

We can handle shipments to any region in Japan.

What is the 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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References

Japan Customs - Customs Valuation System in Japan

Amazon, in seller central website, released the guideline of Customs Valuation.

• Main Trade Procedures and Customs Valuation (English)
• Main Trade Procedures and Customs Valuation (Chinese)
• Main Trade Procedures and Customs Valuation (Japanese)

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