Foreign Online Sellers in Japan
A “Foreign Online Seller” is a person or company outside of Japan selling and shipping to online buyers in Japan.
Foreign Online Sellers cannot fully comply with Japan import and tax rules for importing and selling products in Japan. To resolve this, the government of Japan has implemented new rules for foreign online sellers to ensure sales and import tax compliance.
Declared Import Value:
Online sellers with no company established in Japan must declare the online sale value of their imported product to be the same as the import value on their shipping invoice. Japan Customs will apply Duty and Consumer Import Tax based on the online selling price. Japan Customs also requires supporting documentation in the form of a Foreign Online Seller Report (FOSR) to be part of the Shipping Invoice. This report displays your store name or website, inventory, and selling price of all products being imported to Japan.
To ensure Sellers do not undervalue their import, Japan Customs will conduct a selling price search to ensure your selling is within an acceptable margin of the same or similar products. If your Declared Value/Selling price is below the acceptable margin, Japan Customs will apply a Fair Market import value to your shipment. You will then be charged import and duty tax based on the revised value.
During the import process, Japan Customs will:
- Review your Store/website and Product selling price to confirm it is the same as the import value.
- Check your pricing history to ensure the pricing was not recently lowered to avoid import tax
- Monitor your selling price to ensure your pricing does not increase excessively after import.
Sales Tax: Foreign Online Sellers
Profit Tax in Japan: all companies must comply with Profit Tax laws. To claim wholesale, purchasing, import tax, or manufacturing costs on your commercial/shipping invoice, you must sell (transferring) the product to a distributor or subsidiary (another company who will resell the products or to your subsidiary) in Japan.
- Online sellers with no company established in Japan, cannot comply with Japan profit tax laws. Therefore, Japan Customs and Tax have implemented import requirements for online sellers. Online sellers must declare the online sale value of their imported product and pay the Duty and Taxes based on that value.
- Japan Customs has become very strict with online sellers. Imported products will be stopped. Japan Customs will review your online account to compare your sale price to your declared value. If they do not match, you will be charged additional taxes and possible penalty fees. Multiple infractions (failure to comply) can result in your company being restricted to import products into Japan.
- Do not modify your online pricing during import. Japan Customs has access to online seller pricing history. If Japan Customs believes you have intentionally changed your online pricing to avoid taxes, you may be restricted from all future imports.
- As a policy, COVUE IOR services are fully compliant with Japan Customs and Tax laws. COVUE does not accept shipments that do not comply with Japan import and Tax rules and regulations.
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At COVUE IOR, we seek to make the import process simple, compliant, and accessible to all sellers of all sizes. COVUE is not an ACP. COVUE is the direct IOR: we own our license, and our compliance support is in-house. We trusted by 000’s of Sellers and Shipping providers.