The Japanese economy, like many other developed economies, is heavily dependent on imports. This can be attributed to the fact that Japan’s economy is made up of many small, individual components that cannot readily be replaced or upgraded by domestic production. The sector in Japan, therefore, plays a vital role in ensuring that the economy continues to function smoothly and efficiently.
In terms of GDP growth, the import sector has been particularly notable since the 1980s. Between 1980-2000, total imports grew from US$62 billion to US$242 billion—a rate of increase nearly three times greater than GDP growth over this period. In addition to this rapid increase in imports over time, there have also been significant changes in some specific categories of imports. For example, between 2000-2014 there was a large increase in foreign automobiles imported into Japan as well as a sharp drop off in imports of machinery and equipment.
This article can help anyone interested to learn more about imports and tariffs in Japan.
Import tax rates
Japan’s import sector has been growing in recent years. The government has taken steps to encourage this growth, including the introduction of a lower tax rate for imports.
The administration currently imposes tariffs on most goods entering the country. These taxes are imposed on the value of the items as they enter the country rather than when they are sold. This means that if you buy a garment from abroad, it will be taxed at the rate of duty upon arrival in the country rather than when you take it home with you.
There are several different types of tax rates in Japan:
Foreign items tax
Products imported from overseas countries are subject to a flat rate of 20%. This rate applies both to personal and commercial imports. For example, if you’re importing shoes for yourself but also selling them.
Australian or New Zealand products
Goods imported from certain countries such as Australia or New Zealand are subject only to a duty rate based on the value of each item’s retail price. For example, if something costs $100 then it would be taxed at 10%.
Import taxes in Japan
There are four types of import taxes in Japan: consumption tax (10%); sales tax (10%); value-added tax (10%); and other taxes (10%). The consumption tax is levied on all things and services sold within Japan, while the sales tax is levied only on goods sold within the nation or brought into the country by residents. Value-added tax is levied at a rate of 10% on most goods and services sold within the nation but exempts some items such as food and clothing purchased outside of the country when they are brought for personal use. To calculate how much you will owe in VAT after the purchase, multiply the base price by 0.05%. If you’re purchasing $1,000 of goods from Japan, this equates to $50 in tariff.
Laws regulating Japanese import taxes
The following are the major laws that govern taxes in the country.
- Custom tariff
The first law is the Customs Tariff Law, which outlines the duties and levies imposed on imported goods.
- Consumption law
This tax is imposed on all foreign goods in the country and is determined by calculating based on the value of the imports plus any applicable levies. The flat rate of consumption tariff is 10%, but in some cases, a lower rate of 8% applies.
- Customs law
The Customs Law regulates the import and export of goods. In Japan, the least customs value is JP10,000. Any delivery valued at more than JPY 10,000 is subject to import taxes and duties.
- Foreign exchange and trade law
Finally, the fifth law is the Foreign Exchange and Foreign Trade Law, which regulates foreign exchange transactions and the import and export of goods.
All of these laws are essential to the proper functioning of the tax system and ensure that businesses and consumers alike are protected.
