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Japan import tax guide for Malaysia exports

Business · 4 Mins Read

Japan import tax guide for Malaysia exports

Trade between Japan and Malaysia is robust, with both countries dealing in machinery, metals, plastics, rubber, agriculture, and transport. In 2021, exports from Malaysia to Japan amounted to US$19.72 billion, with mineral fuels, oils, electrical and electronic equipment, as well as raw materials being the main imported goods.

Although land in Japan is largely suitable for agricultural activities, it is insufficient to produce food for the densely populated country. There is also a lack of raw materials for energy supply and the manufacturing industry. Therefore, food and energy raw materials are imported from other countries, which offers Malaysian companies numerous opportunities to export to Japan.

Businesses wishing to export to Japan need to be aware of the country’s import taxes and duties and the procedure for paying them. This guide discusses various Japan import fees, the Japan import tax calculator, and which products are taxable and which are exempt.

What are the import duties in Japan?

The Malaysia-Japan Economic Partnership Agreement (MJEPA) came into force on 13 July 2006. Under this agreement, most trade tariffs on imports and exports have been eliminated, with further reductions to follow in the coming years. These are the types of tariffs and minimum duties.

Customs threshold value

The minimum customs value in Japan is JP¥10,000. Import duties and taxes are levied on any shipment valued above JPY 10,000. No duties are levied on shipments valued below this threshold. Japan uses the Harmonised Commodity Description and Coding System (HS system) to classify and set tariff rates. 

Types of tariffs 

According to Japan Customs, the following types of import taxes are levied:

  • Customs duties: These include the General Rates, which are basic rates applied to products unless another rate applies. In the case of Malaysia or other countries that have free trade agreements (FTA) with Japan, preferential rates apply as opposed to general rates. 

  • Consumption tax: This tax is levied on all imported goods in Japan and is calculated on the value of the imported goods plus any customs duty payable. The standard consumption tax rate is 10%, in some cases a reduced rate of 8% applies.

  • Other internal taxes: This includes excise tax, which is levied on certain products. such as tobacco, petroleum products, LPG, and alcohol. Excise tax is levied on the basis of the quantities of goods imported.

Japan import duty calculator

Most of Japan's import duty rates are calculated on the basis of ad valorem rates, which means that the tax is levied on the value of the goods rather than their quantities. For some goods, such as alcoholic beverages and cereals, specific rates of duty are applied. For other goods, a combination of ad valorem and specific rates is applied as compound rates.

Take the example of importing goods worth JP¥20,000. Assuming that an average rate of 1.8% is applied, Japan’s import and customs duties are calculated as follows:

Import duty

= 1.8% of Customs value 

 = 1.8% of 20,000 

 = JPY 360

Consumption tax at the standard rate of 10% 

= 10% of (Customs value + Import duty)  

= 10% of 20,360 

= JPY 2,036

Total payable duties 

= Import duty + consumption tax + excise tax (if applicable)

= 360 + 2036 

= JPY 2396

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Goods subject to and exempt from customs taxes 

According to the Japanese Ministry of Foreign Affairs, the following goods are subject to import duty rates:

  • Alcoholic beverages

  • Agricultural products

  • Coffee and Tea

  • Certain vegetables and fruits

  • Tableware, furniture, toys, and games

  • Fresh Bananas

  • Margarine

  • Plywood

  • Rice

  • Wheat

  • Barley

  • Beef

  • Pork

  • Starches

Under the FTA with Malaysia, Japan has eliminated tariffs on the following products:

  • Iron and Steel

  • Automobiles and their parts

  • Cocoa preparations

  • Forestry products, with the exception of plywood

  • Fishery products, including shrimps, prawns, and jellyfish

Prohibited goods may not be imported

According to Japan Customs, the following goods are prohibited from being imported into the country:

  • Heroin, Cocaine, Cannabis, Opium, MDMA, and other narcotics 

  • Explosives and firearms

  • Counterfeit, fake, or forged currency notes, credit cards, and coins

  • Chemical weapons and biological weapons

  • Pornographic materials

  • Writings or drawings that pose a threat to public safety or may be considered immoral or vulgar

  • Goods that infringe intellectual property rights

Payment of Japanese import taxes

The procedure for importing and paying Japan’s import customs fee entails the following steps:

  • The person importing goods must file an import declaration with the Director General of Japan Customs. The declaration should include the quantity and value of the goods and other relevant information.

  • The person must submit the import declaration together with other shipping documents, including the sales invoice, air waybill or bill of lading, certificate of origin, licences and certificates, customs duties exemption documents, if any applicable, and customs payment slips. 

  • Customs authorities inspect the goods and Japan's import charges and excise duties are calculated based on the value or quantity of the imported goods.

  • The importer must pay the required duties and taxes, after which the import permit is issued.

Aside from understanding each country’s local tax laws and regulations, it will be helpful to also identify your global target market. Companies that understand them successfully are able to garner a strong international presence in the industry, resulting in a boost in sales and larger consumer base.

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