Japan customs implements vital amendments to combat abusive practices

Significant changes have recently been published concerning Japanese customs procedures. These changes, issued by the Japanese customs authorities on 30 June 2023, confirm a few vital amendments to the primary circular of the Customs Code. Here's what businesses need to know about the latest revisions and how they could affect their imports into Japan., these changes are effective from the 1 October 2023.

The aim of the amendments

The recent changes (which we'll get into in a second) are all implemented to address and reduce cases of abusive practices within Japan's customs procedures. Ultimately, Japan aims to create a more transparent, fair, and efficient system for trade and imports. With these new amendments made to customs procedures in Japan, authorities hope to ensure that all parties involved will now be held accountable for their roles and responsibilities within import transaction In brief, abusive practices within customs procedures can include anything from false declarations, the misuse of exemptions, and deliberate undervaluation of goods to transhipment fraud, smuggling, and contraband trade. 

Here's a quick breakdown of the most significant amendments to the customs procedure in Japan to ensure all processes are conducted fairly and lawfully, protecting Japan's economy and trade relationships. 

Japan customs implements vital amendments to combat abusive practices

Foreign Entities can no longer utilize a Japanese company as their Importer of Record (IOR):

In an attempt to combat tax evasion, starting October 2023, it will be mandatory for non-resident importers to make use of an Attorney for Customs Procedure (ACP) when importing into Japan.This is to ensure proper import procedures and compliance with regulations. In certain circumstances, the Japanese Customs can designate and appoint an ACP on behalf of the importer.  In recent years there have been numerous cases of improper importation into Japan - especially relating to the importation of goods to be sold on online platforms, such as Amazon or Rakuten, where customs agents have been falsely declared as importers, leading to undervalued. The ACP merely assumes the role of managing customs affairs for the foreign company, and the actual taxpayer of the customs duty to customs office is the foreign company, who is the importer of the goods.

 New Fields on the Import Declaration

When a foreign importer appoints an ACP, form 7500 needs to be filled in and submitted to the customs office. The Japanese Customs have amended this form to include new mandatory fields. The Japanese Customs now requires information on the name and address of the importer. In addition, information on the relationship between the ACP and the importer should also now be indicated on the customs declaration. 

Other significant changes to the form will come into effect in October 2025. These changes will include mandatory fields to indicate whether cargo is imported for the sale on e-platforms (B2C cargo) or not. The name of the e-platform will also be required as well as the place of delivery after importation is complete. 

Effortless compliance and import VAT recovery with VAT IT

Ultimately, changing legislation and customs procedures aims to provide more clarity, transparency, and efficiency to challenging processes. However, keeping up with the latest amendments shouldn't hinder successful VAT reclaim. Instead, free your team from the administrative burden of playing compliance catch-up while effortlessly reclaiming your import VAT with VAT IT.