According to Kyodo News, the Tokyo division of US technology giant Apple has been fined $105 million (approximately Rs. 870 crore) in extra taxes for selling large quantities of iPhone cellphones and other Apple products to foreign tourists duty-free.
According to Kyodo News, which cited an unnamed source with knowledge of the situation, the Tokyo Regional Taxation Bureau determined that Apple Japan's approximately $1,04,16,84,000 (roughly Rs. 8,634 crore) in tax-exempt sales for the two years leading up to September 2021 were made through fraudulent duty-free purchases that were later resold for profit.
The taxes department discovered several strange transactions during its inquiry, which it started last year. One of these transactions involved a visitor buying several hundred gadgets at an Apple store, according to a Japanese news outlet.
According to the news article, the additional tax of $105 million imposed on underreported sales is thought to be the greatest additional consumption tax ever levied for tax-free transactions.
Only foreign tourists who buy mementos or everyday items to take back home within six months after landing in Japan are eligible for tax-free shopping. According to the Kyodo News report, the items are taxed if they are purchased with the intention of reselling them. However, retailers must evaluate the types of purchases.
It is rumoured that Japan has lower prices for several products than other countries, including iPhones. According to the news source, the tax office believes that merchants want to take advantage of Japan's duty-free system by encouraging foreign tourists to purchase the goods in Japan and then resell them overseas for a profit.
Following examples of mass purchases of cosmetics and other items at department shops for resale, the Taxation Bureau issued administrative guidelines to department retailers in June to insist that products be sold correctly.
One of the cases involved a group of seven Chinese nationals who travelled to Japan in 2020 on tourist and other visas. According to the Kyodo News, the Osaka Regional Taxation Bureau assessed them a tax of $56,58,162 (roughly Rs. 46 crore) on their purchases of $5,73,26,115 (roughly Rs. 475 crore) in high-end goods. The merchandise, which included watches and handbags, were discovered to have been purchased for resale.
