The Customs and Tariff Bureau of the Ministry of Finance of Japan has issued guidance regarding certain regulatory changes resulting from the 2016 Tax Reform Act, and setting forth increases in penalties that may be imposed on importers for deficient customs declarations or for non-declarations. The measures in the 2016 Tax Reform Act are effective beginning 1 January 2017.
Concerning the penalty regime with respect to customs declarations, the new regulations provide for the following.
Under current customs laws and regulations, importers may file voluntary disclosures to report and amend deficient import declarations without the imposition of penalties if there is no prior knowledge of the deficiency discovered by means of a customs investigation or customs audit. This rule also applies to importers that have been notified of an upcoming customs audit.
The new, revised provisions provide that a 5% penalty can be imposed—even on importers that voluntarily file new disclosures—after being notified of an upcoming customs audit.
Currently, a 5% penalty can be imposed on importers that file voluntary disclosures to report and amend non-declarations of imports if there is no prior knowledge of the deficiency by means of a customs investigation or customs audit. This rule also applies to importers that have been notified of an upcoming customs audit.
The new, revised provisions allow for the imposition of a 10% penalty—even on importers that file voluntary disclosures after being notified of an upcoming customs audit.
Under current laws and regulations, if penalties are assessed for deficient and/or non-declarations that are the result of an importer concealing or suppressing facts, Japan Customs may impose a “heavy penalty tax” of 35% for deficient declarations and 40% for non-declarations.
The new, revised laws also allow for Customs to increase these penalties by an additional 10% for importers that have been charged with penalties in the past five years for deficient declarations in situations when the “heavy penalty tax” was imposed or in situations of non-declarations regardless of whether the “heavy penalty tax” was imposed.
|Error and reporting||Phase||Current||New||“Heavy
penalty tax” - for
offense* within five-year period (New)
|Error- Self disclosure||Knowing before correction
After announcement of audit
announcement of audit
|Error- Non-disclosure||Knowing before correction
|After announcement of audit (New)||10%||10%||35%||+10%|
|Before announcement of audit||10%||10%||35%
|Non-declaration– self-disclosure||Knowing before correction
|After announcement of audit (New)||5%||10%||N/A||N/A|
|Before announcement of audit||5%||5%||N/A||N/A|
|Non-declaration –Non-disclosure||Knowing before correction
|After announcement of audit (New)||15%||15%||40%||+10%|
|Before announcement of audit||15%||15%||40%||+10%|
For more information, contact a professional with KPMG’s Trade & Customs practice in Japan:
Masaharu Umetsuji | +81 3 6229 8070 | email@example.com
Takayuki Kozu | +81 3 6229 8205 | firstname.lastname@example.org
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