Japan’s Definition for Importer of Record Could Affect Logistics Companies, Law Firm Says

Certain logistics companies and other parties that were previously eligible to be importers of record when shipping into Japan may no longer qualify as an IOR after a recent clarification by Japan’s customs authority, DLA Piper said in a client alert last week. The firm said it “may be worth reviewing the existing arrangements used for exporting goods to Japan to confirm who” must pay the Japanese consumption tax, which is done by the IOR, and who will be entitled to claim tax credit for that paid tax.

Effective Oct. 1, Japan clarified that the IOR is the party who “can freely dispose of the imported goods” or “acts for the purpose of the importation,” which includes a lessee of goods imported under a lease agreement, a consignment distributor of goods imported for consignment sale in Japan and a person who “processes and repairs the goods which are imported for processing and repair."

While the administrative work for the customs clearance in Japan, including the payment of the import consumption tax, may be “outsourced” to a customs broker, DLA Piper said it’s “still the IOR who is the taxpayer.” Only the IOR is “entitled to claim the credit for the paid [import taxes] for calculating the [tax] liability,” the firm said.