According to the website of the Japanese Ministry of Finance, Japan Customs audited over 4,000 companies in 2018. 4,000 companies mean that Japan Customs did an audit on over 10 companies per day on average.
| Year of 2018 | |
| Number of audit | 4,079 Companies |
| % of any mistake pointed out by authority | 79.2% |
In addition, the Ministry of Finance released information regarding what were the frequent cases Japan Customs pointed out.
Frequent cases Japan Customs pointed out
- Import with undervalue invoice
- Adjustment paid by the importer to the exporter (e.g. Transfer pricing adjustment)
- Wrong origin determination, not eligible for FTA duty rate
Under-invoicing
The first one is Under-invoicing, meaning that an importer asks the exporter to enter an intentionally lower value on the actual commercial invoice. Japan Customs highly likely will impose the "heavy additional tax" if they find such manipulation of the customs value.
Adjustment payment (Transfer Pricing Adjustment)
The second case is the Adjustment payment. It is the general case that the adjustment paid by the importer, apart from the primary payment on imported goods.
Transfer pricing adjustment is one example. The global companies often make a transfer pricing adjustment Quarterly or Yearly, to keep arm’s length profit in accordance with the Corporate/Income Tax compliance perspective. However, such retrospective payment from importer to exporter, Japan Customs may point out that is resulting in an upward customs value adjustment.
FTA
The third case is the importer initially imported goods with FTA duty rate, due to because the origin determination was wrong or some mistakes. So Japan Customs said that imported goods were not eligible for FTA duty rate. The origin status of import goods should determine entirely in accordance with each specific FTA’s rule. Otherwise, you have to pay a significant amount of penalty.
FTA, Customs and International Trade Advisory Services
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.
Logistics Companies with Collaboration Experience
Here is a list of our partner logistics and forwarding companies with whom we have had successful collaborations. Please note that this list is not exhaustive, as we are open to working with any logistics or forwarding companies. As Attorneys for Customs Procedures (ACP), we represent non-resident clients (IOR) and coordinate with these logistics companies, who manage the transportation of goods to and from Japan.
