Understanding ACP and IOR in Japan's Import Framework | SK Advisory - Japan ACP

What is IOR - Importer of Record

When sending goods to Japan, for import, there must be a Japan 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 Japan IOR.

However, by appointing ACP (Attorney for Customs Procedure), a foreign entity can become a Non-Resident Importer (IOR) then you can import by yourself.

When Do You Need ACP - Attorney for Customs Procedure?

As a non-resident companies without a presence in Japan to act as the Japan Importer of Record (IOR), you need to appoint an Attorney for Customs Procedure (ACP) to fulfill this role.

By appointing an ACP, you gain the ability to become Japan IOR and handle the import process independently.

If you require assistance with IOR-related matters, engaging an ACP can provide a suitable solution.

At SK Advisory, we offer ACP services, ensuring a seamless import customs procedure for our non-resident clients.

ACP's advantage

One significant advantage of using our ACP service is that only the IMPORTER can deduct the input JCT (import consumption tax) during the periodical JCT tax filing. If another IOR service provider becomes the IMPORTER, it may not be possible for the non-resident entity to claim the input JCT deduction. We highly recommend utilizing our ACP service to maximize this advantage.

For more details about JCT, please visit : Consumption Tax

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

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.

Japanese Customs System Reform: Clarification of Importer Definitions

Starting October 1, 2023, Japanese Customs has instituted a pivotal reform aimed at addressing the issue of foreign sellers improperly designating third parties (such as forwarders or customs agents) as importers.

This revision necessitates foreign corporations to utilize an Attorney for Customs Procedures (ACP) to assume the role of Importer of Record (IOR) directly in many cases. The practice of merely nominally appointing another entity as the importer is no longer feasible.

Notably, foreign corporations that act as importers themselves, through the engagement of ACP, are eligible for Japan Consumption Tax (JCT) benefits. (link: Consumption Tax Treatment and Benefits of Using ACP).

As a dedicated ACP firm, we ensure compliance with the law to facilitate correct import procedures, allowing you to trust us with your importation requirements confidently. We are eager to engage in further discussions with you.

Revisions Effective October 1, 2023:

Definition of the Importer

Regarding a cargo imported under import transaction, an importer is equivalent to “a person who imports a cargo” defined in Article 6-1 (1), General Notification of the Customs Act. ..... This means, the Consignee, etc., in the case of imports conducted through normal transactions between an overseas seller and a Japanese buyer
In the cases other than above, an importer is a Person Having the Right of Disposal of the import cargo at the time of import declaration. If there is another person who acts on the purpose of the import*, that person is also included :

In case of a cargo imported:
- under lease contracts, a person who rents and uses the cargo.
- for consignment sales, a person who sells the cargo in the name of himself/herself (consignee) by accepting the commission.
- for processing or repairing, a person who processes or repairs the cargo.
- for disposal, a person who disposes the cargo.

Importer Defined as the “Person Having the Right of Disposal”

One of the most notable aspects of the amendment is the clarification that the “person having the right of disposal” is regarded as the importer under Japan Customs law. The term “right of disposal” is similar to ownership, but not identical. Although there is no explicit definition in the customs-related legislation, according to Japan Customs, it refers to the authority to decide how the goods will be handled after being released into Japan—for example, whether to sell the goods or to enter into a sales contract.

For additional information, please refer to the following resources:

Alert: Importer (IOR) Service Provider Not in Compliance with Customs Laws

Attention must be given to cases where IOR service providers or forwarders act as the IOR but MASK (ERASE) their information on the Import Permit Document. This raises concerns about their compliance with Japan Customs Law, such as Customs Valuation. It is important to be cautious when encountering such situations as they may indicate underlying issues.

Importers are responsible for paying penalties, such as additional taxes (penalty), when there is a shortfall in the tax amount owed. It is the importer's obligation to fulfill their tax payment requirements. However, it should be noted that IOR service providers may not be cooperative in the event of a customs post clearance audit.

Unfortunately, we actually observe that some non-resident entities suffer from the 10% import consumption tax is not deductible (refundable), and they were penalized by the customs post clearance audit. In the end they decided to use ACP, not IOR service provider.

While not all IOR service providers are non-compliant, it is observed that certain providers engage in inappropriate practices. Opting for these providers based on cost-saving measures may result in the inability to deduct or refund 10% JCT, leading to hidden costs and detrimental business outcomes.

As a reputable Customs professional, SK Advisory strictly adheres to Japan Customs Law and confidently provides clients with the Import Permit Document. We are listed as the ACP, while clients are appropriately identified as the IOR on the document.

Please Be Aware

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 150 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—SK Advisory 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 ACP and JCT Tax Representative Service - We offer a fully integrated service for both ACP and JCT Tax Representative needs. Our expertise enables efficient deduction or refund of import JCT through accurate JCT tax filings.
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 – 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.

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 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?

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 regulated items including cosmetics, PSE-regulated products, foodstuffs, and tableware.

Which regions in Japan are we covering?

Any region in Japan, we can handle.

What is difference between ACP and IOR?

ACP is not the Importer. ACP enables non-resident entities to become IOR (Importer of Record).

Japan Consumption Tax (JCT) Compliance

Understanding the handling of JCT (such as payment of import JCT, collection of sales JCT from customers, and JCT returns) is crucial to avoid significant cost burdens. This is a vital aspect, so please ensure a thorough understanding to determine the most optimal business model.

Basic Process of JCT Handling

The JCT treatment for foreign corporations without a base in Japan, importing and then selling in Japan, can be broadly outlined in the following three steps:

At Import: Pay import VAT (10% of the declared value) to customs – Supported by ACP (Attorney for Customs Procedures)
At Sale: Collect VAT (10% of sales) from customers
Final Tax Return (usually annually): Deduct the import VAT paid (step 1) from the JCT collected from customers (step 2), and pay or receive the difference to/from the tax office – Supported by a Tax Representative (Certified Tax Accountant)

Note: Using ACP to become the importer (IOR) is essential for JCT deductions and refunds. If another company acts as the IOR, you cannot deduct the input tax (step 1), and must pay the entire VAT collected (step 2) to the national tax authorities, leading to significant costs.

If you are a JCT-exempt business, the process ends at steps 1 and 2. For taxable businesses or invoice-registered businesses, step 3 (Final Tax Return) is obligatory.

In the Final Tax Return (step 3), if the JCT paid (step 1) exceeds the provisional JCT received (step 2), the difference is refunded. Conversely, if the provisional JCT received (step 2) exceeds the JCT paid (step 1), the difference must be paid to the tax office.

Is Being the Importer Important?

It is very important. Without acting as the importer (IOR) through ACP (Attorney for Customs Procedures), you cannot deduct input tax in step 3. You must pay the full amount of JCT collected in step 2 to the tax office, with no possibility of a refund, resulting in substantial costs. Be careful not to let another company act as the importer.

Are we a Tax-Exempt Business?

Tax Filing Obligations of Nonresidents and Foreign Corporations

First, the consumption tax received from customers in Step 2 above should basically be paid to the national tax office. Consumption tax is imposed on transfers, etc. of assets made in Japan. Therefore, even if a nonresident or foreign corporation transfers assets in Japan, it is subject to consumption tax and is obligated to pay the tax.

In some cases, such as exempt businesses, it may not be necessary to pay the tax to the national tax office.

However, the following are examples where one cannot qualify as an exempt business and must file for consumption tax:

<Examples of Entities Required to File JCT Tax Returns (Non-Exempt Businesses)>

Qualified Invoice Issuers:
Businesses registered as qualified invoice issuers under Japan’s invoice system.
Businesses with Taxable Sales Exceeding JPY 10 Million During the Base Period:
Entities whose taxable sales in Japan during the base period (generally the fiscal year two years prior) exceed JPY 10 million.
Businesses with Taxable Sales Exceeding JPY 10 Million During the Specific Period:
Entities whose taxable sales in Japan during the specific period (generally the first six months of the previous fiscal year) exceed JPY 10 million.
Newly Established Corporations with Capital of JPY 10 Million or More:
Newly established corporations (including certain newly established corporations) with capital or investment of JPY 10 million or more during a taxable period without a base period.
Foreign Corporations with Capital of JPY 10 Million or More Deemed to Have No Base Period: (Applicable to taxable periods starting on or after October 1, 2024) *
Foreign corporations without a base period and with capital or investment of JPY 10 million or more at the start of the fiscal year are not exempt from consumption tax obligations.
Businesses Opting for Taxable Enterprise Status:
Entities that voluntarily select to be treated as taxable enterprises.

*Important Notes on the 2024 JCT Tax Law Amendment
Under the 2024 amendment of Japan’s Consumption Tax Law, the exemption for foreign corporations initiating business in Japan has been significantly tightened.

Foreign corporations with no base period and capital of JPY 10 million or more at the beginning of the fiscal year are no longer exempt from consumption tax obligations during that fiscal year.

Starting from taxable periods beginning on or after October 1, 2024, a foreign corporation that has an existing base period but was primarily conducting business outside Japan and subsequently starts taxable business activities in Japan after the day following the end of its base period will be deemed as having no base period.

Being "deemed to have no base period" means that if the corporation’s capital or investment is JPY 10 million or more, it will incur consumption tax obligations from the deemed base period fiscal year onward.

As a result of this amendment, many foreign corporations will be required to file consumption tax in Japan from their first year of business operations in the country.

Disclaimer: The above outlines the general principles of Japan’s consumption tax obligations. Each company’s specific tax liability should be confirmed by consulting with a licensed tax accountant.

Can Tax-Exempt Businesses Receive Refunds?

Yes, it's possible, but a final tax return (step 3) is necessary. Even if you're an exempt business, you are still able to opt to submit a "Taxable Business Selection Notification" to the tax office, intentionally becoming a taxable business to file a final tax return and receive a refund for the paid import JCT. This is applicable only if the JCT paid at import (step 1) exceeds the provisional JCT collected (step 2). Note that using an ACP (Attorney for Customs Procedures) to act as the importer is essential for input tax deduction and refunds.

Is It Better to Become a Registered Invoice Issuer?

This depends on individual circumstances, but generally speaking, for B2B where customers are corporations, it's better to be a Registered Invoice Issuer (as corporations file JCT returns and need qualified invoices for input tax deductions). For B2C where customers are primarily consumers, the necessity is somewhat reduced (as most consumers do not file JCT returns).

Many companies seem to become Registered Invoice Issuer without fully understanding the system. Being a registered business mandates the filing of a final tax return (step 3). Please seek advice from appropriate experts.

Is Support from a Certified Tax Accountant Necessary?

For non-residents conducting tax office procedures (step 3) in Japan, appointing a Tax Representative is required. The ACP handles customs procedures, while the Tax Representative deals with national tax (tax office) matters. Under the Certified Tax Accountant Act, the following tasks are exclusively performed by the Certified Tax Accountants, making their support essential: