Details of Japan Customs Valuation System
Japan has adopted a Customs Valuation System based on the WTO Valuation
Agreement and stipulates provisions regarding the system in the Customs
Tariff Law. The details of Japan Customs Valuation System are as follows:
1. Methods of Determining Customs Value
(1)Basic method of determining Customs value
-
The Customs value of imported goods is the transaction price paid by the
buyer to the seller (including direct payments such as all of the liability
of the seller and part of repayments) plus the following fares (Customs
Tariff Law, Article 4, Para. 1):
- transportation-related expenses, including the fare until arrival at port,
insurance, etc.;
- commissions (excluding the buyer's commission), the cost of contents (normally
used ones), and the cost of packing (including personnel costs) to be borne
by the buyer;
- materials, parts, tools, molds, consumer goods, engineering plans and sketches
(only those developed outside of Japan) and other service costs that were
provided free of charge or at a discount by the buyer in the production
and transaction of imported goods;
- the cost of the use of patent rights, design or trademark rights, or others
(excluding the right to reproduce the imported goods) stipulated by a Cabinet
Order which the buyer pays as a condition for import transaction;
- any income from disposing of or using imported goods which are considered
to belong to the seller.
-
The following expenses are not included in the Customs value if the amount
is clear:
- duty and other surcharges that are to be discounted or repaid at the time
of export;
- service costs required for installation, assembly, maintenance, or technical
assistance on the imported goods which are to be conducted after importation
into Japan;
- fares, insurance, and other transportation expenses required after arrival
at ports;
- duties and other surcharges imposed in Japan;
- interest on deferred payments.
-
The method of determining the duty, where there is no import transaction
(for example, gratis goods or leased goods) or where they meet the following
conditions, is described in Paragraph (2) and thereafter. However, in the
case of (4), if the importer proves that the transaction value of imported
goods is identical or similar to the inspection certified price (necessary
adjustment is made by the stipulation of a Cabinet Order), the case is
exempted;
- when there are restrictions as to the disposition or use of said imported
goods by the buyer (excluding restrictions on resale areas and others stipulated
by a Cabinet Order);
- when the transaction value of imported goods is conditioned by the quantity
or price of other goods between the same buyer and seller or by any other
condition which makes the determination of duty valuation difficult;
- when the value of proceeds of any subsequent disposition or use of the
said imported goods by the buyer that accrue directly or indirectly to
the seller is unknown;
- when a special relationship (as stipulated by laws and regulations) between
the buyer and seller is considered to have influenced the transaction value.
(2)Determination of Customs value on the basis of the transaction value
of identical or similar goods
-
When the transaction value exists for identical or similar goods which
do not fall under Item (1), the Customs value becomes the transaction value
of the goods (when there are transaction values for goods on both sides,
the transaction value of the identical goods). In this case, the transaction
value of the same transaction volume and stage is applied, but if there
is a substantial difference in transportation costs and others, adjustments
are made by a Cabinet Order;
-
When there is no transaction value of the identical transaction volume
and stage, the adjusted value of the trading volume, stage and transportation
cost is made by a Cabinet Order.
(3)Determination of the Customs value on the basis of the domestic selling
price or cost of production
-
a. In the event a Customs value cannot be determined by Items (1) and (2),
and when there are domestic selling prices of identical or similar import
goods, it depends on priority, or if priority is not applicable, via a
request by the importer:
- the value of imported goods is determined by deducting the following from
the domestic seller's selling price to an unrelated domestic buyer: normal
commission, profit and general expenses required for the sales of similar
goods; domestic transportation costs, etc.; and price exempting Customs
duties, etc.;
- the value is determined by deducting the value added through processing
and the expenses listed in 1-(1)-a, b, c from the domestic selling price
of the processed import goods (after the date of determination of objects
for duty assessment) .
-
The value does not depend on the previous item, but when the manufacturing
cost of the imported goods can be identified, the Customs value becomes
the manufacturing cost plus normal profits and general expenses of export
sales of similar goods and the transportation costs until arrival at the
port.
- When an importer requests it, "B." above is applied prior to "A." above.
(4) Determination of the Customs value on special imported goods
If (1) through (3) above cannot be applied, the Customs value is set according
to the stipulations of a Cabinet Order.
(5) Determination of the Customs value of deteriorated or damaged imported
goods
The Customs value of deteriorated or damaged imported goods is the price
computed applying the stipulations in Items (1) through (4), after deducting
an amount equivalent to the depreciation caused by such deterioration or
damage from the Customs value calculated as if such deterioration or damage
had not occurred.
(6) Special rule for determination of the Customs value on air cargo
When applying the stipulations in Items (1) through (4), the transport
fare and insurance of free samples (less than the value ceiling set by
a Cabinet Order) and other imported goods stipulated by a Cabinet Order
are calculated by the transportation fares and insurance of the transportation
method other than air.
(7) Foreign exchange rate used for conversion of currency
The conversion of foreign currencies into Japanese yen is done by the exchange
rate set by a Cabinet Order for the import declaration date (since Japan
shifted to the floating exchange rate system, actual foreign exchange rates
are used in conversion).
2. Valuation Declaration System
The valuation declaration system was implemented in 1966 as part of the
self-assessment system. Under the system, when declaring imports (tax payment),
importers are required to declare on a form separate from the import declaration
document, all items related to the Customs value computation. This is called
the valuation declaration.
(1) Contents of Valuation Declarations
In principle, a valuation declaration is to be made irrespective of the
valuation method used for imported goods: when there is a special reason
for the import transaction; and when the Customs value cannot be calculated
by invoice only. The following items are to be declared:
-
a special situation related to the import transaction, such as conditions
which make the determination of the Customs value difficult;
- an influence on the Customs value by a special relationship between the
buyer and seller;
-
the base for calculating the Customs value, such as a separate payment
for the goods or any other expenses, is to be included in computing the
Customs value and any items relating to them.
(2) Categories of Valuation Declarations
One category is the individual declaration, which is done by submitting
a valuation declaration form each time import (duty payment) declarations
are made. The other is the blanket declaration, which is done prior to
individual imports. Blanket declarations were adopted to help speed up
Customs clearance work. Blanket declarations are applied when the same
goods are traded between the same parties repetitively under the same transaction
conditions. In this case, the importer can bypass the submission of a valuation
declaration form each time import (tax payment) declarations are made by
submitting, in advance, a blanket declaration form.
|