Customs duties

Normal rates and notification requirements

Where are normal customs duty rates for your jurisdiction listed? Is there an exemption for low-value shipments, if so, at what level? Is there a binding tariff information system or similar in place? Are there prior notification requirements for imports?

Based on the principle of no taxation without legislation, there are specific laws or treaties that stipulate six main different customs duty rates:

  • general rate (Customs Tariff Act): a rate that is set from a long-term perspective based on the state of domestic industry etc;
  • temporary rate (Act on Temporary Measures concerning Customs): a provisional, flexible rate applied in special circumstances;
  • generalised system of preferences (GSP) rate (Act on Temporary Measures concerning Customs): a rate that is applied to imported goods where the country of origin is a developing country that has requested preferential tariffs and Japan has accepted this request (generalised system of preferences beneficiary);
  • least developed countries (LDCs) preferences rate (Act on Temporary Measures concerning Customs): this is a rate that applies specifically to imported goods for which the country of origin is a preferential beneficiary and also an LDC, in which case the tax rate is zero. The LDC preferences rate (zero tax) will also apply in the case of the importation of general preferential goods originating from an LDC;
  • WTO treaty tariff rate: this is a rate that is agreed (binding rate) as the maximum duty applicable to imported goods originating from a WTO member country. It also applies to countries with beneficial customs duty treatment, or countries with most-favoured nation status under bilateral treaties; and
  • EPA tariff rate: this is a rate that is set out in specific EPAs between Japan and certain other countries. Certain duties are reduced or eliminated for goods originating from such countries according to a schedule in the relevant EPA.

The rates described in the list above are set out in the Customs Tariff Act or other related laws and treaties based on the International Convention on the Harmonised Commodity Description and Coding System (HS Treaty); the customs tariff schedule can be found on the Customs website: www.customs.go.jp/english/tariff/2019_4/index.htm

Goods with a total customs value of ¥10,000 or less per parcel or customs declaration are exempted from customs duty and consumption tax, save that:

  • alcoholic beverages and tobacco (of whatever value) are subject both to consumption tax and to liquor tax and tobacco tax, respectively; and
  • the exemptions do not apply to goods such as leather bags, leather shoes and knitted apparel, as they are considered inappropriate from the viewpoint of their impact on domestic industries or other circumstances.

General import freight and international parcels with a total customs value of not more than ¥200,000 are subject to simplified tariffs, which sometimes leads to the application of customs rates lower than the general customs rates. For example, cheese subject to simplified tariffs has a customs rate of 5 per cent, although the general customs rates for cheese are in the range of 19.6-40 per cent. However, the simplified tariff rates do not apply to personal items and unaccompanied baggage, goods exempt from tariffs or duty free, and any goods for which it is not appropriate to apply the simplified tariff rates considering the impact on Japanese industries.

An importer may make an enquiry with Customs about the tariff classification (tariff code) and the tariff rate that would be applied to products that the importer is planning to import, and obtain a written ruling in response, before commencing the importation (Advance Classification Ruling System). The tariff classification, tariff rate and statistical code listed on this Advance Classification Ruling System are then applied to the import declaration.

Special rates and preferential treatment

Where are special tariff rates, such as under free trade agreements or preferential tariffs, and countries that are given preference listed?

All tariff rates, including preference rates under EPAs, are set forth in the customs tariff schedule on the website listed above.

GSP beneficiaries (countries and territories) are listed at: www.customs.go.jp/english/c-answer_e/imtsukan/1504_e.htm.

How can GSP treatment for a product be obtained or removed?

In order to receive preferential tariff treatment, it is necessary for an importer to submit a certificate of origin, the GSP (Form A), at the time of import declaration. This certificate must be issued at the time of exportation by customs authorities or any other officially authorised body, such as a chamber of commerce and industry in the country of origin, based on the declaration made by the exporter. The goods must be imported directly to Japan for preferential tariff treatment.

There is also a system whereby preferential tariffs are no longer available for products that originate from preferential treatment beneficiary countries or regions once the country’s or region’s economy has developed or achieved a high level of global competitiveness.

Entire graduation

A country or region is excluded from the list of beneficiaries of Japan’s GSP scheme for all items when the country or region has been continuously classified as a ‘high-income country’ in the World Bank Statistics, published by the International Bank for Reconstruction and Development, for three years up to the previous year.

Under a 2017 amendment of the Act on Temporary Measures concerning Customs, the standards for exclusion from the preferential treatment above require the country or region to fulfil both being classified continuously in the World Bank Statistics as an ‘upper-middle-income country’ for three years; and that the value of exports of the country is no less than 1 per cent of the total value of worldwide exports. The new standards will be implemented from April 2019.

Partial graduation

Products originating from a beneficiary country or region are excluded from preferential treatment when (1) the beneficiary is classified as a ‘high-income economy’ in the World Bank Statistics of the previous year, and (2) the value of Japan’s imports of the product originating from the beneficiary exceeds ¥1 billion and 25 per cent of the total value of Japan’s worldwide imports of the product in the trade statistics for the previous two years. From April 2018, the standards of a country subject to (1) above require the country to be classified as an ‘upper-middle-income country’ in the World Bank Statistics, as well as the value of its exports being no less than 1 per cent of the total value of worldwide exports.

Certain countries or certain products originating from the beneficiary countries or regions are excluded from preferential treatment when certain conditions are met.

Is there a duty suspension regime in place? How can duty suspension be obtained?

Currently, there is no formal duty suspension regime in Japan.

Japan does have a tariff quota system under which a specified quota of certain products may be imported without tariffs or with low tariffs (primary tariff rate) to meet domestic demand for low-priced imported products, but once this quota is met, a relatively high tariff (secondary tariff rate) is applied to further imports in order to protect domestic producers. This tariff quota system differs from the duty suspension regime in that there is a limit to the number of imported goods.

Challenge

Where can customs decisions be challenged in your jurisdiction? What are the procedures?

Any person who is not satisfied with an administrative disposition taken by the Director-General of Customs under the Customs Act or other related laws and regulations may file a protest within three months from the day following the day of the receipt by the petitioner of the notification of the disposition (request for reinvestigation). For a request for reinvestigation, the Director-General of Customs reviews the validity of the administrative disposition and notifies the petitioner of the result with a copy of the decision letter.

If the petitioner is still not satisfied with the decision in response to a request for reinvestigation, it may file an appeal with the Minister of Finance within one month from the day following the day of the delivery of the decision letter. In addition, instead of requesting an investigation, any person who is not satisfied with an administrative disposition taken by the Director-General of Customs may also directly file an appeal to the Minister of Finance within three months from the day following the day of the receipt by the petitioner of the notification of the administrative disposition. These procedures are called a ‘request for review’. In a request for review, the Minister of Finance reviews and examines the validity of the administrative disposition and notifies the petitioner of the result with a copy of the written verdict.

If the petitioner is still not satisfied with the decision made by the Ministry of Finance it may file an appeal to the court within, in principle, six months from the day of the receipt of the written verdict.