Japan Customs Duty/Tax Refund, Drawback and Exemption Program

May 19, 2024 January 2, 2025

SK ADVISORY INC

Last Updated on January 2, 2025 by SK ADVISORY INC

Imported goods into Japan may qualify for reductions, exemptions, or refunds of customs duties and import tax (Japan Consumption Tax) under specific conditions as outlined in the Customs Tariff Law and through other related procedures. The customs duty relief and refund system is structured into two principal categories: permanent schemes, which are set under the Customs Tariff Law, and temporary measures, as specified in the Temporary Tariff Measures Law. Below is a summary of each program:

Customs Tariff Law - Permanent Program

Reduction for deterioration and damage (Art.10)

For the imported goods whose economic merit was reduced by deterioration or damage in the hozei area after import declaration, it is inappropriate to impose a duty equal to the goods which have not deteriorated or not been damaged. Therefore, an amount equal to the duty of the goods which have deteriorated or damaged may be reduced or refunded to correct the difference.

Reduction for goods exported for processing or repair (Art.11)

For the goods which were exported from Japan for processing (only such processing as is recognized to be difficult in Japan) or repair abroad and which are subsequently imported into Japan within one year from the date of their export permit, an amount equal to the duty of goods imported with the same nature and form at the time of export permission may be reduced.

To qualify for duty reduction or exemption upon re-importation after processing or repair, in addition to the usual export procedures, the export declaration must specify that the goods are exported for repair, the anticipated time of import, and the planned place of import. Two copies of the "Processed/Repaired Goods Verification Declaration Form" must be submitted (Customs Form T No. 1050 for duty reduction and Customs Form P No. 7720 for exemption), one of which will be returned to the applicant after customs verification. Additionally, a "Repair Contract" or, if no contract is available, a document of correspondence related to the repair with the foreign exporter or manufacturer must be submitted for customs verification, after which it will be returned to the applicant.

Reduction and exemption for commodities, pork, sugar, etc. (Art.12)

The duty of goods may be reduced or exempted in cases where the prices of imported daily necessities have increased to prevent price increase of daily necessities such as food and clothing, for the purpose of maintaining stability in people’s everyday lives.

Reduction and exemption for raw materials for manufacturing use (Art. 13)

The duty of imported raw materials (corn, etc.) may be reduced or exempted to develop domestic industries manufacturing specific products (formula feed, etc.) or to maintain stability in people’s everyday lives.

Unconditional exemption (Art. 14)

The duty of the following articles may be exempted: 1) articles for the use of the Imperial House, 2) articles belonging to the head of any foreign country, etc. 3) articles under the state monopoly, and 4) re-imported articles.

Reduction and exemption for re-importation (Art. 14-2)

In cases where the amount of customs duty chargeable upon any goods as provided for in any of the following products, which are re-imported without changes in quality and shape after exportation, exceeds the following amount of customs duty, the customs duty shall be reduced by an amount equal to the difference between the previous and the current amounts:

1) Products carried out under hozei work (bonded area): the amount of customs duty chargeable upon said products which was not actually levied under hozei work;

2) Products reduced, exempted, refunded or deducted previously: the amount of customs duty reduction/exemption/refund newly chargeable upon said product

Exemption for Special Use (Art. 15)

Duties on special goods, such as articles used for scientific research or education, may be conditionally exempted to support the promotion of science in Japan.

Exemption for goods for diplomats (Art. 16)

The duty of articles for the official use of any foreign embassy and imported articles for personal use of any foreign ambassador may be exempted based on a traditional international customs and obligations under international laws.

Exemption for re-exportation (Art. 17)

In terms of the promotion of processing trade and the advancement of cultural/academic levels, the duty of the goods which do not have an influence on domestic industries and are not consumed in Japan may be exempted when the said goods will be re-exported within a year of the date of import permit.

1. Eligible Goods:

The following goods, if imported and re-exported within one year from the date of import permit, are eligible for customs duty exemption:

Goods processed or to be used as processing materials
Containers for imported or exported goods
Goods to be repaired
Academic research supplies
Test samples
Testing equipment for imported/exported goods
Samples for orders collection or manufacturing
Goods used in international sports competitions and conferences
Items for touring performances and film shooting equipment
Goods displayed at expositions, exhibitions, fairs, and review events
Vehicles imported temporarily by travelers or shipped separately
Goods re-exported under the provisions of treaties and exempt from taxes

2. Procedures:

(1) Import Procedures:

At the time of import declaration, submit two copies of the "Duty Reduction and Exemption Detail Sheet for Re-export Goods" (Customs Form T No. 1340), including necessary details such as product name, quantity, purpose of import, planned export time, and destination.
A security deposit may be required depending on the circumstances.

(2) Export Procedures:

At the time of export declaration, submit the import permit received in step 1, and if the purpose of import was processing, the "Certificate for Duty-Free Re-exported Goods Processed" (Customs Form T No. 1380).
After exporting, an import permit stating the goods have been exported will be issued. Within one month from the issuance date, submit the import permit and the "Export Notification for Duty Reduction and Exemption of Re-exported Goods" (Customs Form T No. 1385) to the customs office governing the import location, filled with the required details.

Note: If the imported goods are not re-exported within one year, or are used for other purposes, the exempted duties must be paid. It is necessary to notify the customs in advance and proceed with the required procedures.

Reduction for re-exportation (Art. 18)

With regard to those goods which can be used for long periods of time and are imported for the purpose of being used temporarily in Japan, normally in accordance with a lease contract, and are re-exported, the duty of said goods chargeable in re-exporting (excluding the value when the goods was used) may be reduced.

Reduction and exemption on raw materials for use in production of export goods (Art. 19)

The duty of raw materials used in the production of special export goods may be reduced, exempted or refunded to sustain global competitiveness of export goods abroad and to promote exports.

Refund and exemption for exportation of goods manufactured from duty-paid raw materials (Art. 19-2)

In cases where foreign raw materials, which are of the same type as domestic raw materials are used by force of circumstance in manufacturing, the products at a bonded manufacturing warehouse, the duty of the said raw materials may exempted or refunded.

Refund on export of goods whose nature and form are unchanged the times of their importation (Art. 19-3)

When the goods which have been imported with payment of customs duty are re-exported from Japan without any change in nature and form at the time of their importation, the customs duty paid thereon may be refunded within one year from the date of their import permit.

To receive a refund of customs duties at the time of re-exportation, apart from following the usual import procedures, you must submit two copies of the "Re-export Goods Verification Application Form" (Customs Form T-1625) to customs. One copy will be returned to the applicant after customs verification.

When re-exporting, in addition to the standard export procedures, you need to submit the previously obtained import permit and two copies of the "Application for Refund (Reduction) of Customs Duty for Goods Re-exported in the Same Condition as Imported" (Customs Form T-1627), along with the "Re-export Goods Verification Application Form" that was verified upon import.

The identity of the goods being imported and re-exported is confirmed through marks, numbers, or details on related documents such as packing lists, although sometimes additional documentation such as photographs or catalogs may be requested.

Please note that the entire process related to the refund of duties can be time-consuming. If you are considering applying for a duty refund, it is advisable to consult with customs in advance to understand the procedures and timelines.

Refund for claimed merchandise (Art. 20)

In cases where claimed merchandise is re-exported or destroyed, the customs duty paid may be refunded to help the importers who do not realize any economic benefits.

To receive a refund for customs duties for re-exported goods, it is essential to complete specific procedures at customs before exporting the goods. Failure to follow these procedures will result in ineligibility for the refund.

Eligible Goods:

Goods that must be returned or disposed of due to differences from the contract terms in quality or quantity.
Personal items sold through mail order that, upon import, do not meet the importer's expectations in terms of quality, thus necessitating their return or disposal.
Goods that, after importation, become subject to prohibitions on sale or use by law, necessitating their export or destruction in place of export.

Procedures:

To apply for this duty refund, it is mandatory to carry out the following steps at customs before exporting the goods:

If seeking a refund through re-export of non-compliant goods, the goods must first be moved into a bonded area and a "Non-compliant Goods Bonded Area Entry Notice" (Customs Form T No. 1630) must be submitted. Upon confirmation of entry, a receipt for this notice will be issued.

The export declaration for non-compliant goods involves the usual export procedures, plus submitting two copies of the "Customs Duty Refund (Reduction/Deduction) Application for Export of Non-compliant Goods" (Customs Form T No. 1640) with the following documents:

Documents proving the non-compliance of goods.
For personal items sold via mail order, documents proving such sale (catalogs, order forms, delivery notes, etc.)
Proof that the sale or use of the goods or products made from them was banned after importation (copies of the relevant laws or public notices published).
Import permit or a substitute certificate from customs.
Receipt for the "Non-compliant Goods Bonded Area Entry Notice."

If seeking a refund through destruction of non-compliant goods, similar steps as above are required for the goods' entry into a bonded area and receiving the entry receipt, followed by submitting two copies of the "Destruction Approval Application" (Customs Form C No. 3170) with all the aforementioned documents, and obtaining approval for the destruction.

Subsequently, apply for the customs duty refund (reduction/deduction) for the destroyed non-compliant goods by submitting one copy of the "Customs Duty Refund Application for Destroyed Non-compliant Goods" (Customs Form T No. 1660) with the attached destruction approval.

Note: As these refund procedures can be time-consuming, it is advised to consult with customs in advance if you are considering applying for a refund.

Temporary Tariff Measures Law

Exemption for parts of aircrafts, etc. (Art. 4)

The customs duty of parts of aircrafts, which are difficult to manufacture in Japan, may be exempted because the advancement of aircraft transport, aircraft manufacturing, space development and their technology contributes to the development of industrial economies.

Reduction for products manufactured from goods exported for processing or assembling (Art. 8)

With regard to specific import goods which are made from goods exported from Japan for processing or assembling and returned to Japan within one year from the date of export, the customs duty of the goods exported may be reduced.

Exemption for goods exported for processing or repair under Economic Partnership Agreement (Art. 8-7)

For goods being exported from Japan to the parties of Economic Partnership Agreement for processing or repair and returned to Japan within one year from the date of export, the customs duty of the goods may be exempted.

Japan Customs:

Our Customers - Attorney for Customs Procedures (ACP) Service

All our clients have successfully become Japan Importer of Record (IOR) and/or Exporter of Record (EOR) 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. For clients, we(SK Advisory) work as an Attorney for Customs Procedures (ACP), while the logistics companies manage forwarding, logistics, customs clearance and warehousing operations.

Categories: Customs Duty