According to Nihon Keizai, Apple was charged about $98,247,268.00 in arrears by Japanese tax authorities after it was found that Apple gave duty-free benefits to resellers (resale experts) in Japan and sold iPhones in large quantities
Nikkei said Japanese tax authorities found that foreign travelers bought a large number of iPhones at the Apple Store, including at least one case in which an individual purchased hundreds of mobile phones at once. Even though the duty-free requirements were not met, they gave tax benefits to resellers and sold iPhones worth about 130 billion yen.Japan exempts foreign visitors who stay for less than six months from the consumption tax of 10% when purchasing products. However, duty-free benefits are not given when purchasing products for resale purposes. Japanese tax authorities believe that one should not provide tax-free benefits for purchasing hundreds of mobile phones at a time, suspecting the possibility of resellers.Nikkei pointed out, “Foreign travelers were improperly exempted from consumption taxes by purchasing iPhones and other Apple devices,” adding, “Apple did not properly grasp the suspicious mass purchase of iPhones by foreign visitors.”
Apple said, “We are not providing duty-free benefits at the Apple Store,” adding, “We apologize for the inconvenience.” As of fiscal 2022, Apple’s sales in Japan amounted to $26 billion.
Apple reportedly ended its tax exemption at the Apple Store in Japan from June and submitted a tax amendment report to the Japanese tax authorities. Earlier this month, Apple CEO Tim Cook visited Japan and announced that he had invested more than $100 billion in Japan’s supply chain over the past five years.Apple’s imposition of arrears tax also revealed loopholes in Japan’s tax exemption regulations. In Japan, the duty-free purchase limit for consumer goods such as cosmetics and medicines is limited to 500,000 yen, but there is no upper limit for home appliances.
In particular, since 2012, duty-free shops have been expanded using tourism and consumption as growth strategies. According to a survey by the tax authorities, there were 24,000 unpaid consumption tax transactions by companies until June this year. The amount of tax in arrears was 86.9 billion yen, up 11% from five years ago.
(Apple) is responsible for covering unpaid taxes that have been leaked in violation of duty-free regulations, Nikkei said. “In the case of foreign duty-free benefits, it is unlikely that tax revenue will be lost by reporting purchases when leaving the country like other countries.”
SOPHIA KIM
ASIA JOURNAL
