Practical Exchange Rate Application and Conversion Methods in Customs Declarations

Foreign Exchange Rates in Customs Declarations

Foreign exchange rates in customs declarations refer to the currency conversion rates used to convert foreign currency-denominated invoice values, freight charges, insurance premiums, and other additional elements into Japanese yen. These rates are applied when calculating declared values for export/import declarations and taxable values for imported cargo.

In customs declarations, the conversion to yen is not done using bank remittance rates, internal accounting rates, or invoice preparation rates at discretion. Instead, the foreign exchange rates published by the Director-General of Customs are used.

For import declarations, the taxable value is generally calculated based on the CIF price of the imported goods—in other words, the cargo value plus freight, insurance, and other costs up to the import port.

For export declarations, the declared value is generally based on the FOB price at the export port.

In international logistics and customs practice, failure to correctly confirm declaration date, applicable currency, Incoterms, freight, insurance, multiple currencies, rounding, minimum value thresholds, and differences with internal rates can lead to errors in declared or taxable values.

Scope Covered in This Article

Item	Contents Covered in This Article	Contents Covered in Other Articles in Detail
Exchange Rates Used for Customs Declaration	The meaning of the Published Exchange Rate of the Director-General of Customs, its relationship with the declaration date, and differences from bank rates and internal company rates	Customs valuation, dutiable value
Conversion in Import Declaration	The method of converting foreign currency cargo price, freight, and insurance into Japanese yen based on the CIF price	Calculation methods for dutiable value, CIF terms, import declaration
Conversion in Export Declaration	The method of converting foreign currency export prices into Japanese yen based on the FOB price	Export declaration, FOB terms, shipment
Multiple Currencies and Yen-Denominated Invoices	Handling cases where invoices, freight, and insurance are in different currencies or when the invoice is denominated in Japanese yen	Invoices, freight, insurance
Rounding and Small-Value Determinations	Rounding in yen conversions, declaration price arrangements, exemptions under 10,000 yen, simple tax rates for amounts under 200,000 yen	Customs duties, import consumption tax, small-value imports
Practical Points for Confirmation	Scheduled declaration date, actual declaration date, currency, addition elements, consistency checking with internal documents	Customs document checking, customs valuation, post-permit delivery

Exchange Rates Used in Customs Declarations

The exchange rate used in customs declarations is the foreign exchange rate publicly announced by the Director-General of Customs, known as the Published Exchange Rate of the Director-General of Customs.

This rate is used to convert cargo prices, freight charges, insurance premiums, and other additional costs listed in foreign currency into Japanese yen.

It may differ from the remittance rate offered by banks, internal accounting rates, invoice preparation rates, or rates used by insurance companies.

Therefore, for customs declarations, it is important to verify not “the actual remittance amount paid,” but rather “the Published Exchange Rate of the Director-General of Customs applicable to the declaration.”

Rate Type	Main Use	Use in Customs Declarations	Notes
Published Exchange Rate of the Director-General of Customs	Convert foreign currency amounts to yen for customs declarations	Used to organize import declaration prices, taxable values, and export declaration prices	Confirm the rate applicable for the week of the declaration date
Bank Remittance Exchange Rate	Used for actual foreign currency remittances and settlements	May not match the customs declaration rate	Do not confuse with TTS, TTB, or the middle rate
Internal Accounting Rate	Used for accounting, cost calculations, and monthly management	Not directly used for customs declarations	Accounting purchase amounts may not match the declared customs value
Invoice Preparation Rate	Used for converting domestic or internal invoices to yen	Handled separately from the conversion basis for customs declarations	Prepare to explain differences between invoice amounts and declared customs values
Insurance Company Conversion Rate	May be used for cargo insurance applications and insurance amount settings	Confirm separately from the insurance premium conversion used for customs declarations	Do not confuse the insured amount with the insurance premium to be added

Positioning of the System

For import declarations, it is necessary to calculate the taxable value in Japanese yen in order to determine customs duties and import consumption tax.

When invoices are issued in foreign currencies such as US dollars, euros, Chinese yuan, or Singapore dollars, the amounts cannot be directly used for Japan’s tax calculation.

Therefore, foreign currency amounts are converted into Japanese yen using the foreign exchange rates published by the Director-General of Customs.

This currency conversion is relevant to customs valuation, import declaration pricing, export declaration pricing, trade statistics, and the determination of minor value thresholds.

Concept of the Published Exchange Rate of the Director-General of Customs

The Published Exchange Rate of the Director-General of Customs is the foreign exchange rate applied during the week of the customs declaration date.

Generally, this rate is published based on the weekly average of the actual foreign exchange rates observed two weeks prior to the week of the declaration date.

In practice, you should verify the published exchange rate by currency for the applicable week on the customs website corresponding to the week of the declaration date.

The exchange rates on the invoice issuance date, loading date, arrival date, payment date, or remittance date are not used arbitrarily.

If the declaration date changes, the applicable week changes, which may affect the Published Exchange Rate of the Director-General of Customs to be used.

Declaration Date and Applicable Exchange Rate

The Published Exchange Rate of the Director-General of Customs is confirmed based on the week in which the declaration date falls.

The declaration date here refers to the actual date the export or import declaration is submitted. It is not the invoice issuance date, shipment date, arrival date, or payment date.

For example, if cargo originally scheduled for declaration on Friday is delayed due to document deficiencies and declared on the following Monday, the applicable Published Exchange Rate of the Director-General of Customs may differ.

During periods of significant exchange rate fluctuations, crossing into a new week for the declaration date alone can change the yen-converted declared or taxable values.

Date	Relation to Customs Declaration Exchange Rate	Use Case	Practical Notes
Declaration Date	Determines the applicable week for the Published Exchange Rate of the Director-General of Customs	Import declaration, export declaration	Confirm based on the actual date of declaration submission
Invoice Issuance Date	Generally not the reference date for the Published Exchange Rate of the Director-General of Customs	Sales documents, price confirmation	Do not arbitrarily use the exchange rate on the invoice date
Shipment Date / Arrival Date	May not directly correspond to the customs declaration exchange rate	B/L, Arrival Notice, schedule confirmation	Do not confuse with the declaration date
Payment Date / Remittance Date	Reference date for bank remittance rates, distinct from customs declaration rate	Accounting, settlement, remittance	The actual remittance rate is not used for customs declaration

Currency Conversion in Import Declarations

In import declarations, the taxable value is calculated by converting foreign currency amounts for the cargo price, freight charges, insurance premiums, and other additional elements into Japanese yen.

Generally, the taxable value for import declarations is based on the CIF price, which includes freight and insurance up to the port of import.

For example, when importing under FOB terms, the invoice price typically does not include freight or insurance charges up to the import port. In this case, if there are foreign currency-denominated freight or insurance fees, these should be converted into yen using the Published Exchange Rate of the Director-General of Customs and added accordingly.

Under CFR terms, the invoice price often includes freight, while insurance is usually arranged separately by the buyer.

Under CIF terms, the invoice price generally includes both freight and insurance; however, if additional insurance is arranged separately, it is necessary to confirm how this separate insurance premium is treated for customs valuation purposes.

Conversion in Export Declarations

In export declarations, the declared value is generally organized based on the FOB price at the export port.

Unlike imports, where customs duties and import consumption taxes require calculation of a taxable value, export declarations usually do not involve such calculations. However, the declared value can affect export statistics, de minimis determinations, export permits or approvals, and internal management.

When using invoice prices denominated in foreign currency, conversion to Japanese yen should be based on the Published Exchange Rate of the Director-General of Customs applicable to customs declarations.

For example, even if the export contract is CIF or CFR, the export declaration must be prepared using the FOB price at the export port.

Therefore, when adjusting the FOB price by deducting international freight and insurance costs from a foreign currency sales price, it is important to confirm which costs to deduct and in which currency to convert those costs.

In the Case of Invoices Issued in Japanese Yen

When the invoice is issued in Japanese yen and the transaction price, freight, and insurance fees are fixed as yen amounts, currency conversion from foreign currency to yen usually does not occur.

However, even with a yen-denominated invoice, if separately invoiced items such as freight, insurance, mold fees, royalties, free goods, or additional charges are issued in foreign currency, conversion of those foreign currency amounts using the Published Exchange Rate of the Director-General of Customs may be required.

Additionally, if a yen invoice includes a "reference foreign currency amount" or "internal conversion amount," it is necessary to confirm which amount represents the actual transaction price.

Case	Need for Conversion	Documents to Confirm	Practical Notes
Invoice price stated in Japanese yen	Foreign currency conversion generally not required	Invoice, contract, purchase order	Verify that the yen amount is the actual transaction price
Cargo price in yen, freight in foreign currency	Only the foreign currency freight requires conversion	Freight details, freight invoice	Check published exchange rates by currency
Cargo price in yen, insurance premium in foreign currency	Only the foreign currency insurance premium requires conversion	Insurance policy, insurance premium details	Confirm the insurance premium amount, not the insured sum
Yen invoice includes a reference foreign currency amount	Confirm the actual transaction price	Contract, purchase order, invoice, payment terms	Do not confuse the reference amount with the declared value

When Multiple Currencies Are Involved

In practice, the invoice, freight charges, and insurance premiums are not always in the same currency.

For example, there may be transactions where the invoice price is in US dollars, ocean freight is charged in euros, and insurance premiums are settled in Japanese yen.

In such cases, the invoice price in US dollars should be converted using the US dollar rate under the Published Exchange Rate of the Director-General of Customs, while the euro-denominated freight should be converted using the euro rate under the Published Exchange Rate of the Director-General of Customs.

If the insurance premium is fixed and denominated in Japanese yen, that yen amount should generally be confirmed as is.

When multiple currencies coexist, it is important not to convert everything into a single currency using an arbitrary exchange rate, but rather to check the Published Exchange Rate of the Director-General of Customs for each currency separately.

Cases of Currencies Not Listed in the Official Exchange Rate Table

There are instances where the currency used in a transaction is not listed in the official exchange rate table published by the Director-General of Customs. This issue commonly arises with emerging market currencies, currencies with low trading volumes, or special settlement currencies.

In such cases, it is necessary to coordinate with the customs broker or customs authorities to clarify the arbitrage calculation via a major currency, verify the market exchange rate, replace it with the contract’s base currency, or organize a conversion method accepted in the declaration practice.

It is important not to simply use internal company rates or arbitrary bank rates for currencies not listed in the table. The process of which intermediary currency was used, the source of the exchange rate, and the basis for the yen currency conversion must be documented, such as in the customs broker’s calculation details or internal records.

Check Item	Common Issues	Confirmation Source	Practical Response
Inclusion in Official Exchange Rate Table	The currency is not listed in the official exchange rate table published by the Director-General of Customs	Customs broker, Customs website	Confirm whether the currency is listed before declaration
Conversion via Major Currency	Arbitrage conversion via major currencies such as USD or EUR may be required	Customs broker, Customs, financial institution materials	Retain documentation supporting the arbitrage calculation
Contractual Base Currency	The contract specifies a minor currency, but the actual settlement base currency is different	Contract, purchase order, invoice, payment terms	Confirm the actual transaction price and currency
Use of Arbitrary Rates	Using internal company or bank rates without verification	Customs broker, internal accounting, import department	Confirm the basis for the conversion rate with the customs broker before declaration

Conversion of Insurance Premiums

Insurance premiums are a common source of errors in customs declarations.

Under CIF terms, it is common for the insurance premium arranged by the seller to be included in the sales price. In this case, confirm whether the insurance premium is included in the invoice price and how it is itemized.

Under CFR or FOB terms, the buyer may arrange separate cargo insurance. If this insurance covers transportation up to the port of import, it may affect the customs valuation and taxable value.

If the insurance premium is billed in a foreign currency, convert it into Japanese yen using the Published Exchange Rate of the Director-General of Customs corresponding to that currency.

If the insurance premium is settled in Japanese yen, verify the amount stated in the insurance premium details or the insurance policy.

Note that the insured value for cargo insurance and the insurance premium amount to be added for customs declaration purposes are not the same. Customs valuation requires confirmation of the insurance premium related to coverage up to the port of import, not the insured amount.

Rounding Procedures

When converting amounts denominated in foreign currencies to Japanese yen, rounding fractions may occur.

In practice, for foreign currency amounts related to cargo value, freight, insurance, and other surcharge elements, the official exchange rates published by the Director-General of Customs in each currency are applied, and the amounts are converted to yen accordingly. If fractions below one yen arise, these should be rounded according to customs declaration procedures, NACCS input requirements, and the customs broker’s calculation details.

Differences in rounding can occur depending on whether costs in the same currency are totaled before conversion or converted item by item before summing. Especially when invoice value, freight, insurance, and surcharges are denominated in different currencies, it is important to maintain separate conversion justifications by currency and by cost item.

Additionally, at the stages of calculating dutiable value, customs duties, and consumption tax after conversion to yen, separate rounding methods may apply. Care should be taken not to confuse rounding at the currency conversion stage with rounding during tax calculations.

Item to Check	Practical Handling	Points of Caution	Points of Confirmation
Fractions below one yen	Round to whole yen as per declaration practice and NACCS input	Do not rely solely on internal calculation sheets	Customs broker, calculation details, NACCS input
Totals within the same currency	Confirm the unit of conversion used for cargo value, freight, and insurance in the same currency	Rounding differences can occur between item-by-item conversion and conversion after totaling	Customs broker, internal calculation sheets
Multiple currencies	Apply the Published Exchange Rate of the Director-General of Customs for each currency separately	Do not arbitrarily convert all amounts into a single currency	Invoices, freight details, insurance details
Rounding of dutiable value	Confirm the handling of rounding for the dutiable value used in tax calculations	Separate rounding for currency conversion and tax calculation	Customs broker’s calculation details
Rounding of tax amounts	Separate rounding is applied during calculation of customs duties, consumption tax, and local consumption tax	Do not confuse with rounding of declared values	Import declaration copy, tax payment details

Impact on Small-Value Determinations

Currency conversion in customs declarations can also affect small-value determinations.

Typical examples include assessing whether goods with a total taxable value of 10,000 yen or less are exempt from customs duties and consumption tax in principle. Additionally, for general imported goods and international postal items valued at 200,000 yen or less, the simplified duty rates for low-value imports may apply.

Even if the foreign currency price is close to the threshold amount, after conversion to yen using the Published Exchange Rate of the Director-General of Customs, the total may exceed the 10,000 yen or 200,000 yen limits. Conversely, changes in the declaration date can affect the applicable rate, potentially reducing the taxable value below the threshold.

For small-value determinations, it is necessary to check not only the cargo’s price but also freight charges, insurance fees, the treatment of the same invoice, and whether there are partial declarations or shipments.

Determination Item	Threshold	Relation to Currency Conversion	Points to Note
Duty exemption for taxable value of 10,000 yen or less	Total taxable value is 10,000 yen or less	Judged based on foreign currency price converted to yen	Confirm excluded items and exceptions for domestic consumption tax
Simplified duty rate for 200,000 yen or less	Total taxable value is 200,000 yen or less	Applies based on taxable value converted to yen	Some items may not qualify for simplified duty rates
Declaration date change	Applicable week may change	Rate fluctuations may cause crossing of threshold amounts	Confirm based on actual declaration date, not intended date
Partial shipment or partial declaration	May require combined assessment	Do not judge small-value status based on only partial data	Check for same invoice, same shipper, and same consignee

Difference from Internal and Accounting Exchange Rates

The exchange rate used for customs declaration may differ from the company's internal accounting rate or the remittance rate provided by the bank used for transactions.

The exchange rates used for accounting processes, revenue recognition, invoicing, and cost calculation serve different purposes than those used for customs declaration.

Purpose	Exchange Rate Used	Objective	Relation to Customs Declaration
Customs Declaration	Published Exchange Rate of the Director-General of Customs	Calculate export/import declared value and taxable value of imported cargo	Official conversion standard for customs declaration
Accounting Processing	Rate based on company accounting policy and accounting standards	Process purchases, sales, costs, and monthly financial closing	May not match declared customs value
Bank Remittance	Actual remittance rates such as TTS, TTB, or median rate at time of transfer	Handle foreign currency settlements, bank remittances, and foreign exchange gains/losses	Remittance amounts are managed separately from declared customs value
Insurance Application	Conversion rate based on insurer or contract conditions	Set insurance coverage amount and premiums	Insurance amount should not be confused with customs valuation of insurance premiums

It is not uncommon for the customs declared value, accounting purchase amount, invoice converted yen amount, and insurance application amount to differ.

What is important is to avoid mixing the exchange rates according to their specific purposes.

Relationship with Incoterms

Confirming Incoterms is essential for currency conversion in customs declarations.

The scope of costs included in the invoice price varies depending on terms such as FOB, CFR, CIF, FCA, CPT, and CIP.

Under FOB terms, freight and insurance costs to the import port are often separate; when paid in foreign currencies, each currency should be converted individually.

With CIF terms, freight and insurance are generally included in the invoice price, but any additional charges or separate insurance require verification on how to handle them.

For CPT and CIP, freight and insurance to the named place may be included in the price, but for customs declaration purposes, it is necessary to clarify the cost components up to the import port.

Term	Costs Usually Included in Invoice Price	Checks for Customs Declaration	Currency Conversion Considerations
FOB	Costs up to export port	Confirm freight and insurance costs to import port separately	Convert foreign currency freight and insurance by each currency
CFR	Freight to import port	Confirm whether insurance is separately arranged by consignee	Convert insurance separately if in foreign currency
CIF	Freight and insurance to import port	Check for additional insurance, separate charges, and price breakdown	Separate invoice breakdown from other billed charges
CPT / CIP	Freight and insurance to named place	Clarify cost components up to import port	Verify no costs beyond import port are included

Points for Freight Forwarders and Customs Brokers to Confirm in Practice

Freight forwarders and customs brokers need to verify the declaration date, currency, foreign currency amounts, freight and insurance charges, and Incoterms, ensuring the correct published exchange rate applicable to customs declarations is applied without error.

Item to Confirm	Details to Check	Source for Confirmation	Action if Issues Arise
Scheduled vs. Actual Declaration Date	Whether the week of the declaration date changes	Customs broker, in-house customs team	Reconfirm applicable exchange rate if the declaration date changes
Currency	Currencies used in the invoice, freight, insurance, and additional charges	Invoice, freight details, insurance details	Check the announced exchange rate for each currency
Amount in Japanese Yen	Whether the amount in Japanese yen is finalized or just a reference conversion	Contracts, invoices, purchase orders	Verify the actual transaction price
Incoterms	Scope of freight and insurance costs included in the price	Contracts, invoices, purchase orders	Confirm price structure such as CIF, CFR, FOB, etc.
Currencies Not Listed in the Announced Exchange Rate	Whether the transaction currency is listed in the official exchange rate table published by the Director-General of Customs	Customs website, customs broker	If not listed, confirm the conversion basis with the customs broker
Rounding Procedures	Rounding for amounts below one yen, taxable value, and tax amount calculations	Customs broker, calculation details, NACCS entry	Check for discrepancies between internal documents and declaration details
Small Amount Judgments	Application of exemption for amounts under 10,000 yen or simplified tariff rate for amounts under 200,000 yen	Customs broker, invoice, freight and insurance documentation	Determine based on taxable value after conversion to yen

Main Documents

To verify the basis for currency conversion, it is necessary to organize documents that show the foreign currency amounts and cost structure.

• Commercial Invoice
• Packing List
• B/L, Sea Waybill, Air Waybill
• Freight details, Freight Invoice
• Insurance Policy
• Insurance Premium Details
• Order Form, Contract, Price List
• Contract documents indicating Incoterms
• Documents related to royalties, tooling costs, free goods, etc.
• Documents confirming the Published Exchange Rate of the Director-General of Customs
• Customs broker’s calculation breakdown

In particular, documents that clarify whether freight and insurance charges are included in the invoice price or are separate are important.

Common Practical Issues

Case	Common Issues	Documents to Check	Practical Measures
Declaration date crosses a week boundary	The applicable Published Exchange Rate of the Director-General of Customs may change	Scheduled declaration date, actual declaration date, Published Exchange Rate of the Director-General of Customs	Reconfirm currency conversion when the declaration date changes
Multiple currencies mixed	Freight, insurance, and cargo value may be converted into a single currency arbitrarily	Invoice, freight details, insurance details	Apply the Published Exchange Rate of the Director-General of Customs for each currency separately
Currency not listed in the published rates	Basis for currency conversion tends to be unclear	Contracts, currency documents, customs broker’s calculation details	Confirm with the customs broker and customs to retain the rationale behind calculation
Foreign currency charges included in a yen-denominated invoice	Although the cargo value is in yen, freight or insurance conversion may be missed	Freight details, insurance details, contract documents	Convert only the foreign currency portions separately
Overlooking insurance fee conversion	Failure to add buyer-arranged insurance fees in FOB or CFR terms	Insurance policy, insurance details, insurance contract	Confirm insurance fees covering the shipment to the import port
Crossing the low-value threshold	Converted amount exceeds the thresholds of ¥10,000 or ¥200,000	Invoice, freight, insurance, conversion details	Make determinations based on the taxable value after yen conversion
Rounding differences occurring	Amounts differ between internal calculation sheets and customs broker’s details	Calculation details, NACCS input data, internal calculation sheets	Check the sequence of conversion and when rounding is applied
Using internal exchange rates for declaration	Mixing internal accounting cost rates with customs declaration values	Internal exchange rate list, Published Exchange Rate of the Director-General of Customs, customs broker details	Separate accounting exchange rates from those used for customs declaration

Comparison Table of Freight Forwarder Involvement Scope

Category	Supportable Actions	What Should Not Be Definitively Asserted	Practical Approach
Declaration Date Confirmation	Confirm the planned declaration date and the actual declaration date	Definitively assert that declaration can always be made using the planned date exchange rate	Reconfirm the applicable exchange rate if the declaration date changes
Currency Confirmation	Organize the currencies of invoices, freight charges, and insurance premiums	Decide that all amounts can be converted using a single internal exchange rate	Check official published exchange rates for each currency
Yen-Denominated Confirmation	Confirm whether invoices are yen-denominated or include foreign currency amounts	Decide that no verification is necessary if invoices are yen-denominated	Verify the presence of separately stated foreign currency costs or reference foreign currency amounts
Minor Currency Handling	Check if the subject currency is listed in the official published exchange rate table	Definitively assert processing by an arbitrary bank exchange rate or internal rate	Confirm conversion methods, grounds for rate choice, and record-keeping with the customs broker
Small Amount Determination	Check impact on tax exemption under 10,000 yen and simplified tax rates under 200,000 yen	Decide small amount eligibility based solely on foreign currency values	Confirm based on the taxable value after conversion into yen
Fractional Handling	Cross-check the customs broker’s detailed calculations with internal calculation sheets	Decide correctness solely based on rounding in internal Excel sheets	Ensure consistency with NACCS input and declaration details

Example 1: Converting a CIF Price Quoted in USD to Japanese Yen

Assume the official exchange rate published for the week containing the import declaration date is 1 USD = 150 JPY.

If the invoice price is 10,000 USD, freight to the import port is 1,000 USD, and insurance premium is 100 USD, the CIF value in foreign currency amounts to 11,100 USD.

In this case, multiplying 11,100 USD by 150 JPY results in a converted yen value of 1,665,000 JPY.

For the actual declaration, it is necessary to verify that the currency, addition of cost components, rounding method, Incoterms, and the currency input in the customs system are all consistent.

Example 2: Case with Multiple Currencies Mixed

There may be cases where the invoice price is USD 10,000, the ocean freight is EUR 800, and the insurance premium is billed at JPY 12,000.

In this case, the invoice price should be converted using the Published Exchange Rate of the Director-General of Customs for USD, and the ocean freight should be converted using the Published Exchange Rate of the Director-General of Customs for EUR.

If the insurance premium is finalized in Japanese yen, confirm the yen amount as is.

For this scenario, instead of converting all amounts into USD and applying a single exchange rate, it is necessary to verify the appropriate published exchange rate for each currency as used in the customs declaration.

Example 3: Case Where the Applicable Exchange Rate Changes Due to the Declaration Date Spanning a Week

There are cases where cargo initially scheduled for import declaration on Friday has its declaration postponed to the following Monday because the invoice correction was not completed in time.

In such cases, since the week to which the declaration date belongs changes, the Published Exchange Rate of the Director-General of Customs applicable for that week may also change.

During periods of significant foreign exchange fluctuations, the taxable value converted into yen may differ even if the foreign currency amount remains the same.

In this situation, the customs broker should reconfirm the published exchange rate for the week corresponding to the actual declaration date, not the originally planned declaration date.

Example 4: Overlooking Currency Conversion for Insurance Premiums

In cases where cargo is imported under FOB terms and the buyer arranges marine cargo insurance denominated in foreign currency,

if only the invoice price and ocean freight are converted, and the insurance premium up to the port of import is omitted, there may be gaps in calculating the customs valuation.

In such cases, it is necessary to review the insurance policy and premium details, convert the foreign currency insurance premium into Japanese yen using the Published Exchange Rate of the Director-General of Customs, and then clarify the treatment under customs valuation.

Example 5: Confusing Internal Company Rates with Customs Declaration Rates

While monthly internal company rates are used for the company's accounting processes, the customs declaration requires the use of the Published Exchange Rate of the Director-General of Customs.

If cost data created using the internal company rate is directly used for the customs declaration value, the yen conversion amount declared to customs may differ.

In this case, it is necessary to separate the accounting rate from the customs declaration rate and verify that the amounts on the customs documents are calculated using the Published Exchange Rate of the Director-General of Customs.

Example 6: Transactions Conducted in Currencies Not Listed in the Official Exchange Rate Table

There are cases where an invoice is issued in an emerging market currency that is not included in the official exchange rate table published by the Director-General of Customs.

In such situations, rather than directly using the internal company rate or the reference rate shown on the invoice, it is necessary to consult with the customs broker or customs authorities to clarify the method for arbitrage conversion via a major currency and to organize the handling process for customs declaration in practice.

For this case, it is important to keep documentation of the currency used for conversion, the reference exchange rates, the calculation formula, and the confirmation results from the customs broker as supporting materials.

Example 7: Cases Where the Small-Value Threshold is Crossed Due to Currency Conversion

Even if the price denominated in foreign currency appears to qualify as low-value cargo, when converted to Japanese yen using the Published Exchange Rate of the Director-General of Customs, the taxable value may exceed thresholds of 10,000 yen or 200,000 yen.

If the declaration date shifts to the following week, causing the applicable exchange rate to change, the taxable value in yen may fluctuate despite the foreign currency amount remaining the same.

In such cases, it is necessary not to judge low value based solely on the foreign currency amount, but rather to determine the taxable value based on the conversion into yen using the Published Exchange Rate of the Director-General of Customs applicable on the actual customs declaration date.

Common Misunderstandings

Common Misunderstanding	Correct Perspective	Practical Notes
Using the exchange rate on the invoice issue date is sufficient	For customs declaration, verify the Published Exchange Rate of the Director-General of Customs applicable to the week of the declaration date	Do not confuse the invoice date with the declaration date
Using the actual remittance exchange rate is appropriate	The bank remittance rate and the customs declaration rate serve different purposes	Manage remittance documents and customs calculation separately
Conversion using an internal company exchange rate is acceptable	Internal accounting rates are not intended for customs declaration conversion	Distinguish between accounting data and customs documentation
No verification is needed if the invoice is denominated in JPY	Even when cargo prices are stated in JPY, freight, insurance, or additional charges may be in foreign currency	Review the entire price composition
Combining multiple currencies into one currency for conversion is allowed	Each currency requires verification against the Published Exchange Rate of the Director-General of Customs	Organize invoices, freight, and insurance by currency
For currencies not listed in the published rates, internal company rates are acceptable	For currencies not included in the published rates, confirm the conversion method with the customs broker or customs authorities	Document the basis for any discretionary conversion
Insurance amounts can be added as insurance premiums	Customs valuation considers insurance premiums up to the import port, not the insured amount	Check the insurance policy and premium breakdown
Small-value determinations can be made based solely on foreign currency prices	Small-value assessments should be based on the taxable value after conversion to JPY	Verify impacts on the exemption threshold of JPY 10,000 and simplified tax rate up to JPY 200,000

Freight Forwarder Decision Checklist

Verification Timing	Parties to Confirm With	Items to Confirm	Actions If Issues Arise
During Declaration Preparation	Customs broker, cargo owner, internal staff	Scheduled declaration date, applicable currency, foreign currency amount, Incoterms	Verify the declaration date and price composition
When Declaration Date Changes	Customs broker, internal customs clearance staff	Whether applicable week or the Published Exchange Rate of the Director-General of Customs changes	Recalculate the converted amount
When Confirming Multiple Currencies	Customs broker, cargo owner, accounting	Currency of cargo value, freight, insurance, and additional charges	Separate the conversion basis for each currency
When Checking Yen Invoices	Cargo owner, accounting, customs broker	Whether yen amount is the finalized transaction price and no separate foreign currency charges exist	Confirm any reference foreign currency amounts or separate foreign currency invoices
For Currencies Not Listed in Published Rates	Customs broker, Customs, cargo owner	Conversion method, arbitrage currency, calculation basis	Avoid processing with arbitrary rates and retain supporting documentation
When Confirming Rounding Procedures	Customs broker, internal accounting, declaration staff	Fractions less than one yen, taxable value, tax calculation, NACCS input consistency	Cross-check customs broker details with internal calculation sheets
When Making Small-Value Determinations	Customs broker, cargo owner, importer	Possibility of duty exemption under ¥10,000 or simplified rate under ¥200,000	Confirm based on taxable value after conversion to yen
Post-Declaration Verification	Customs broker, internal staff, cargo owner	Declared price, taxable value, tax amount, discrepancies with internal records	Check for exchange rate differences, rounding treatment, and additional charges

Practical Considerations

The exchange rate used for customs declaration should not be arbitrarily chosen from the invoice issuance date or the bank rate on the payment date.

If the filing date shifts to the following week, the applicable exchange rate may change.

Foreign currency-denominated freight charges and insurance premiums must also be converted into Japanese yen as needed.

Even if the invoice is issued in Japanese yen, if there are freight, insurance, or surcharge elements denominated in foreign currency, their exchange conversions must be verified separately.

When multiple currencies are involved, the applicable exchange rate should be confirmed individually for each currency. For currencies not listed in the published official rates, freight forwarders and customs brokers should consult with customs to confirm the conversion method and retain the basis for any arbitration calculations.

Rounding procedures and data entry methods in the customs system should be aligned with established customs clearance practices.

For small-value assessments, the taxable value is confirmed based on yen conversion using the Published Exchange Rate of the Director-General of Customs, not by the foreign currency price.

Exchange rates and purposes may differ from those used for trade statistics aggregation, internal accounting, insurance applications, or bank transfers.

Summary

The exchange rate used in customs declarations converts foreign currency amounts into Japanese yen to calculate the export/import declaration value and the taxable value of imported goods.

It is standard practice to base import declarations on the CIF value and export declarations on the FOB value.

In practice, it is necessary to verify the declaration date, applicable currency, Published Exchange Rate of the Director-General of Customs, Incoterms, freight and insurance costs, multiple currencies, yen-denominated invoices, rounding methods, small-value determinations, and differences from internal company rates.

Special attention is required when converting insurance premiums, handling transactions involving multiple currencies, currencies not listed in the published rates, declaration dates spanning weekends, and goods near the small-value threshold, as these factors often cause discrepancies in declared or taxable values.

Exchange rate conversion for customs declarations serves a different purpose than accounting or bank remittances. It is crucial to manage currency, declaration date, cost components, and rounding based on the Published Exchange Rate of the Director-General of Customs applicable to customs declarations.