What would you do if you imported some products and sold them to other companies in your country?  You would be required to arrange import customs agent, pay the import duties and taxes, arrange transportation to the destination, sell the goods to your buyer, and charge and file sales tax.

When you import as a non-resident importer in Japan, you will have the responsibility to perform the same roles as Japan-based importers.  Let’s look at what exactly you will have to do to work as a non-resident importer.

 

Shipping Arrangement

Non-resident importers must arrange the door-to-door delivery from picking-up at the export country to delivery to the final destination.  The trade term DDP(Delivery Duty Paid) is usually chosen, in which shipping costs and duties and taxes are all paid by the non-resident importer.

This shipping arrangement includes import customs paperwork and delivery inside Japan, however, it doesn’t necessarily mean that you will have to directly book everything on your end. Express couriers can arrange door-to-door delivery and does the customs paperwork on their own customs team in Japan.  If you use freight forwarders for air and ocean shipments, please ask them for DDP shipment to the final destination, and they will use their Japan agent to process the operation in Japan.

It is very important to tell your couriers and forwarders to bill all the costs in Japan, including the import tax and duties, to yourself.  The most common trouble with non-resident imports is that the carriers have to bill these to the physical recipients(warehouse) in Japan, because the tax payer is not correctly chosen.  Your recipients can only physically receive the goods, and do not pay the duties for you, thus this may cause the customs procedure suspended or delayed, or extra storage fees due to the delay.

Import Duty and Tax

Even if the importers are non-resident and outside Japan, they continue to hold the ownership to the merchandise they import, and they have the obligation to pay the import duty and tax.

For the purpose of appropriate customs declaration and duty/tax payment, Japan Customs Office obliges non-resident importers to appoint a third party to monitor fair price declaration.  This monitoring is the most essential role of an ACP, and duties and taxes are paid by the importer.  Please follow the ACP's advice on the declaration values, because good ACPs have knowledge on fair price declaration.

The Ownership shifts to the buyer after customs declaration when a non-resident importer imports.

Product Liability

Non-resident importers are liable for the products they import, just like resident importers are.

This means that importers have to ensure that their merchandise are legally possible to import and sell in Japan, and compliant with Japanese laws.  Any dispute or other troubles must be solved by and at the cost of importers.  The most important role of ACPs is to assist importers to pay the duties and taxes, and they are not in the position to ensure that the products are legal and compliant for import and sale in Japan.  It's very important to note that the final liabilities to the products that you import are in you.

Tax After Importing in Japan

Whether you are resident or not, if you import and sell goods in Japan, you need to be aware of the second phase of taxation after import.  That is the VAT(called consumption tax in Japan) on the sales that you sell in Japan.  You can learn more about this at Point 3 of Taxes on Non-Resident Importers.

Accounting Responsibilities for Japan Tax Authority

Japanese law sets forth that any importer, either resident or non-resident, is obliged to keep the following accounting records for the periods(starting from the date of import) as specified below.

(1) Accounting Books (7 years)

Itemize the product names, quantities, prices, exporter's names, date of import, and import approval number, or any other existing accounting books or inward invoice book specifying such necessary information.

(2) Documentation (5 years)

Contracts, freight statement, insurance statement, packing instructions, price lists or agreements among you and your manufacturer or seller, and any other proof on the fair value of the merchandise that has been approved to import.

(3) Digital Data of Any Electronic Trading (5 years)

Digital proof of transaction if any transaction is taken digitally, by means of EDI, Internet purchase, or order by email, etc., stating any information that is generally included in regular purchase order or sales agreement)

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