Amazon FBA Japan: Import Deductive Valuation Method
SK ADVISORY INCLast Updated on May 5, 2024 by SK ADVISORY INC
Calculation and Preparation of Import Declaration Values for Amazon FBA Shipments to Japan
Basis for Calculating Import Declaration Values, Based on Japan's Customs Tariff Law
About the concept of customs valuation (determination method for import declaration value):
In general, for imports (under the Customs Law, referred to as "Import Transaction") involving a sales transaction between an overseas seller and a Japanese buyer/importer, it is possible to declare the price using the CIF adjusted basis sales transaction price as the declaration value. This is referred to as the principal method of determination (Customs Tariff Law Article 4, Paragraph 1).
However, in the case of Amazon FBA, Amazon International Sellers bring their goods into the Amazon FC warehouse in Japan while retaining ownership of the goods. In this case, the above principal method cannot be used. Instead, an exceptional method of determination must be used, based on the provisions of Customs Tariff Law Article 4-2 and onwards.
The import declaration value for Amazon FBA shipments is most commonly determined by an exceptional method, specifically (under Customs Tariff Law Article 4-4, based on the determination of taxable value for special import goods, and using the domestic sales price determination method of Article 4-3), which involves deducting certain domestic costs (import duties and consumption tax, Amazon Referral Fee, Amazon FBA Fee, domestic transportation costs, etc.) from the domestic sales price. This calculation method is known as the Deductive Method.
Deductive Valuation Method
The deductive method based on the domestic sales price follows the formula below:
Step-1) Domestic Sales Price - Amazon Fees - Fulfillment Cost - Other Domestic Fees (e.g., Domestic Transport, Clearance charge)
For example, Sales Price 74,500 JPY - Miscellaneous Fees (11,175 JPY + 2,755 JPY) = 60,570 JPY
Step-2) Divide the amount from step 1 by 10% Japan Consumption Tax and a fixed customs duty rate
For example, 60,570 JPY ÷ 110% = 55,063 JPY
The 55,063 JPY from above is the import declaration price per product.
Necessary Screenshots as Evidence for Sales Price and Deducted Fees
Japan Customs requires screenshots as evidence for the Sales Price and any deducted fees.
Sales Price Evidence: Capture this from the Amazon Sales Website at [www.amazon.co.jp/dp/ASIN NUMBER]
Amazon Seller Central Simulator: Take a screenshot from the simulator provided in Amazon Seller Central.
Cost Report: You may sometimes be required to submit the "Fulfillment by Amazon Cost Report".
As professional Attorney for Customs Procedures (ACP) in Japan, we at SK Advisory ensure thorough preparation of all necessary documents and screenshots for the import declaration. You can fully rely on our expertise for all your needs.
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 Customers - Japan IOR / Attorney for Customs Procedures (ACP) Service
All our clients have successfully become Japan Importer of Record (IOR) and imported goods into Japan under our guidance.
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.
Guidance by Amazon
According to the seller central website in Amazon, there is guidance by Amazon that a non-resident entity needs to appoint an ACP or IOR. You may check on this link:
Non-resident requirements
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
Recently, Amazon issued another guidance regarding the Understanding of Attorney for Customs Procedures (ACP) in accordance with the new Japan Customs Regulations that have been effective since October 2023.
Understanding of Attorney for Customs Procedures (ACP)
Understand ACP/CPA
To import your FBA shipment, you may need an ACP (Attorney for Customs Procedures, also called Customs Procedure Agent or CPA; hereinafter ‘CPA’) to support the customs clearance
procedures for your goods. The following materials on the Japan Customs website explains in what situations you need a CPA.
https://www.customs.go.jp/shiryo/jirei.pdf
If you are required to use a CPA, Overseas FBA sellers will be filing import declarations under the seller’s name while using a CPA to help bring their inventory into Japan. A CPA is a resident Japanese entity who registers with Japan Customs as your agent to help with customs declarations and communications. Please note CPA 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.
Please note that the customs territory of Japan is divided into regional areas that do not share information regarding CPA registration. This means you can only rely on your CPA in the region(s) where the application is received. You have to appoint a CPA in each region if necessary. Once you find out the destination Fulfillment Centre (FC) for your goods, please ensure that your CPA is registered in all required regions. For details, you should consult with the relevant customs office.
Are certain product categories limited to Japanese-resident as Importer instead of an ACP/CPA?
There are certain products that are subject to notification, certification, or registration requirements that must be met by a resident Japanese entity who is also responsible for ensuring
the imported goods comply with local laws and regulations. Because these requirements can only be met by a Japanese entity, a non-resident IOR cannot meet them. You are responsible for determining whether or not your goods require a notification, certification, or registration. Japan Customs website has provided an outline of relevant laws and ordinances as a guide but you should also consult with your customs broker or legal advisor. Additionally, all imported products must meet Japanese regulations and product labeling obligations.
For more information, please refer to the Japan Customs’ website: http://www.customs.go.jp/
For more information on the 2023 Japan Customs Act Amendment, please refer to the Japan
Customs’ website:
[JP] https://www.customs.go.jp/shiryo/leaflet_jimukanrinin.pdf
[EN] https://www.customs.go.jp/shiryo/leaflet_jimukanrinin_e.pdf
[CN] https://www.customs.go.jp/shiryo/leaflet_jimukanrinin_cn.pdf
[KR] https://www.customs.go.jp/shiryo/leaflet_jimukanrinin_kr.pdf
