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Tuesday, March 13, 2012
Import tax: a complex, seemingly arbitrary minefield
Paula writes: "What are the rules regarding taxes placed on imported purchases — for example, a pair of boots? I live in Kobe and had to pay taxes of ¥5,400 for a ¥9,000 purchase. I paid more than half the cost of what I bought in taxes."
Japan's import taxes can be a bit tricky to understand, and despite the fact the "tariff schedules," or charts, are available online in English (at www.customs.go.jp/english/tariff/2012_1/index.htm), they aren't easy to decipher.
If you look at any of the tariff charts, you'll notice a horizontal list of tariff rate headers at the top of each column after the "Description" column. The first one is the general tariff rate, which is the default in most cases if none of the other rates apply. Also, for certain items — including duty-free goods, leather products, "knitted" clothing (this sounds very general but there are many small differences that determine what does and doesn't count), shoes, tobacco and some types of jewelry, to name a few — the general rate almost always applies.
On the other hand, if you import something with a value of ¥100,000 or less, what is called the "simplified rate" will apply, excluding, says Customs, the "accompanied and unaccompanied goods of entrants" and the items mentioned above that fall under the general rate. The simplified rate tariffs are lower than the general rate. For a detailed list of which items qualify for the simplified rate and which the general rate, visit www.customs.go.jp/english/c-answer_e/imtsukan/1001_e.htm. Personal imported items worth less than ¥10,000 or less are exempt from duties, except for the items that fall under the general rate listed on this web page.
So, what is one to do about boots, you ask? Any kind of footwear may be subject to the general tariff rate, although the amount owed will vary depending on the type of shoe. As for Paula's boots, I'm assuming they were made of leather given the taxes she had to fork out. In Paula's case, even though the value was under ¥10,000, she still had to pay the general tariff rate.
For another example, I asked about a men's windproof/waterproof, fleece-lined jacket worth around ¥9,500, and another at ¥14,000. The customs officer emphasized that it was difficult to determine the appropriate duty rate from my description alone, but said it would most likely be classified as a "knitted good" that falls under the general tariff rate, and would not qualify for a duty exemption even if it was worth less than ¥10,000. (Interestingly, we recently had a jacket sent to my husband from the U.S. and the value listed on the package was around $140, but we didn't have to pay any duties!?)
One exception to the above rules is if an individual sends you a pair of a leather boots, worth up to ¥10,000, as a gift. Gift packages priced at less than this in total are exempt from the general tariff (and any other tariff). For this exemption to apply, an individual, not a company, must send the boots to you and they must be marked as a "gift" on the outer packaging. If you order from a retailer any other company, the gift exemption obviously will not apply.
Although even if you exercise the gift option, Customs will make the ultimate decision, as their website only states a gift "could" qualify for duty exemption. Also keep in mind that tariffs apply to both new and used goods.
According to Customs, "in order to decide the tariff rate correctly, specification of each item, for example, production flow chart, table of ingredients, etc., is needed."
I asked around on Twitter and it seems that most people have had to pay taxes on leather goods, such as shoes or handbags, and electronics. Some people mentioned they have items regularly sent and have had no problems. A few responses:
@nzsavvygirl: "Yes: clothes and leather/leather-upper shoes from the U.K. Purchase amount was been between ￡200-300 ($310-470). Duty paid between ¥2,000-6,300.
@ilovetypography: "For larger items, always. ¥1,000-4,000"
@thisNatasha: "I have done for figures, my brother @peahat_ has for DVDs, figures, manga usually imported from the U.S. and sent through Germany."
@osakaian says always for leather shoes, but adds, "though I have had bike frames/parts imported both new and used and have never paid tax on them."
@Lnchou: "Yes: shoes, handbags — only commercial packages though (ordered online from U.S.). It hurt because leather shoes = 30% duty. . . . Both cases were marked as commercial although one was eBay/used."
@scoutie: "I had to pay ¥5,000 for mailing my own computer (when I moved here). Maybe because I used the original box? Also, once my mom sent a bunch of clothes and wrote an exorbitant amount on the declaration form. That cost ¥4,000 . . . Otherwise, friends and family send stuff all the time, and it's rarely a problem. Maybe only big ticket items?"
Personally, I've imported shoes, sleeping bags, dry food items, apparel, among other things from retailers and the only times I've ever paid taxes were for sandals with recycled leather straps and a wool suit. We've had "gifts" shipped to us many times and have had no problems (yet) with that either.
If you have questions or would like to contest the taxes applied to something you imported, you can call one of the Customs centers, but most officers won't be able to speak English. You can find contact information for your region at this page: www.customs.go.jp/english/c-answer_e/sonota/9301_e.htm.
For more information about importation rules and tariffs, Customs has an extensive FAQ section at www.customs.go.jp/english/c-answer_e/customsanswer_e.htm.
Thanks also to @tonyinosaka, @sherrywk, @shelflifebooks, @kirsty_girl, @owl59, @AussieinJapan and @tokyopodcast for their answers.