Exporting to Japan

Read our guide below on exporting to Japan

Annual exports to Japan from the UK are worth around £10 billion, including both goods and services. Vehicles, machinery, chemicals and pharmaceuticals are some of the most popular exports to the island nation which help make it the UK’s seventh largest market, on value added terms. If your company is thinking about or starting to do business with Japan then there are a number of things to bear in mind when exporting to the country from the UK.

Japan Fact File

  • Currency: Japanese Yen
  • Capital City: Tokyo
  • Official Language: Japanese
  • Central Bank: Bank of Japan (Nippon Ginko)
  • Population: 127 million
  • GDP: $4.843 trillion

VAT

As a non-EU country, when sending goods to Japan they may charge their equivalent of VAT, called Consumption Tax (CT). There can be a statutory obligation for CT to be charged in some cases, especially with the supply of services. For foreign traders where start-up capital is greater than YEN 10 million then CT compliance is required, but in all cases there is no need to formally register with Japanese tax authorities to pay CT.

Zero Rating

Most goods exported outside of the EU can usually be zero-rated, although the VAT treatment will depend on whether the goods are exported directly to Japan or indirectly. Certain criteria must be met to zero-rate them:

  • They must leave the EU within 3 months
  • Evidence of departure must be kept, including account statements to prove a transaction took place
  • Evidence of export needs to be kept. This could be the Goods Departure Message for direct exports from the UK or Export Accompanying Document for those going indirectly through other EU nations.

Duty

The amount of duty due to be paid on exports sent to Japan will depend on what the goods are and the country’s regulations. The correct documentation must be provided, stating the origin of the goods to qualify for a reduced rate or zero duty.

Commodity Codes

All exports sent to Japan and any country outside of the EU must have a commodity code, which classifies the goods for duty, tax rates and regulations. Using the wrong code can result in HMRC seizing goods and issuing you, the sender, with a fine. You can calculate the cost for sending goods to Japan by finding the right product code and viewing the tariff based on the type of items being exported.

Customs

All items being exported to Japan weighing more than 30kg must be sent as goods, not documents. The Japanese Customs system is very strict and will inspect all private shipments before allowing them to be delivered to the receiving party. Japan Customs also only accept typewritten invoices where applicable.

Declarations

All goods being permanently and directly exported to Japan from the UK must be declared. This is done by submitting an electronic export document through HMRC’s Customs Handling of Import and Export Freight (CHIEF) system, with the accompanying Economic Operator Registration and Identification (EORI) number. For merchandise carried in hand baggage and a few other occasions a paper declaration (C88/ESS) can be used. Indirect exports to Japan need an Export Accompanying Document (EAD) as well.

Restricted and Prohibited Items

Most of the regular goods that are banned from being exported from the UK to any other country are applicable to Japan. The likes of firearms, military equipment and illegal drugs are all prohibited for example, while the country has its own specific restrictions on other items.

Restricted

A maximum weight of 10kg is applied to all alcohol being exported, with a food licence required unless going to a private individual for personal use. For animal products, chemicals, glasses, perfume and firewood/coal they must be correctly documented on commercial or import licences. The number of cigarettes must be included in documentation while non-Japanese passports, credit cards, other tickets need to be sent as goods and not documents.

Prohibited

Animal bones, furs, horns and plant quarantine related items are all banned from being imported into Japan. Fresh and frozen meat, fruit and plant products are prohibited along with soil samples. All goods from, to or made in North Korea cannot be exported to Japan and neither can toy guns, perishables or green and unroasted coffee.

Take a look at TNT’s international export services to start shipping your parcels to Japan today.