- Kyle Chua
Apple Japan Facing $98 Million in Back Taxes After Incorrectly Exempting Tourists, Resellers
A number of foreign shoppers and resellers managed to find a way to abuse Japan's tax exemptions to buy Apple products in bulk, leading to the tech giant's domestic arm to be slapped with billions of yen in back taxes.
According to Nikkei, Apple Japan must now pay 13 billion yen (US$98 million) in taxes after incorrectly exempting numerous transactions, including one that involved an individual buying hundreds of iPhones in one visit.
Japanese tourists staying for less than six months can enjoy duty-free shopping, allowing them to buy certain goods without paying the country's 10% consumption tax. This exemption, however, doesn't apply to purchases for retail purposes.
Apple is among the companies that have been hit with back taxes. The Tokyo Regional Taxation Bureau found over 24,000 transactions that saw companies fail to report consumption tax payments in the year through June. Up to 86.9 billion yen in back taxes were reportedly levied, an increase of 11% from five years ago.
The large back tax amount suggests that there's an easy-to-abuse loophole in Japan's duty-free shopping rules, which are comparatively different from that of other countries.
Nikkei, for instance, notes that consumable goods like cosmetics and pharmaceuticals are exempt from taxes, granted the total spending amount doesn't cost more than 500,000 yen, but no such cap exists for general goods like home electronics.
Stores have to cover the unpaid taxes on purchases that they incorrectly exempt. The report adds that three big department store chains were charged by authorities a total of more than 100 million yen in unpaid taxes since last year.
Apple Japan is said to have filed an amended tax return. The company also halted tax-free shopping in all its stores in June. "We do not offer tax-free shopping at our stores," it told Nikkei. "We apologise for the inconvenience."
A number of foreign shoppers and resellers managed to find a way to abuse Japan's tax exemptions to buy Apple products in bulk, leading to the tech giant's domestic arm to be slapped with billions of yen in back taxes.
Apple Japan must now pay 13 billion yen (US$98 million) in taxes after incorrectly exempting numerous transactions, including one that involved an individual buying hundreds of iPhones in one visit.
The Tokyo Regional Taxation Bureau found over 24,000 transactions that saw companies fail to report consumption tax payments in the year through June.