Apple has been forced to file an amended tax return in Japan to the tune of 13 billion yen ($98 million) after authorities discovered bulk sales of iPhones and other products that were incorrectly exempted from Japan's consumption tax.
Japan allows tax-free shopping for visitors who spend less than six months in the country on items including electronic goods. However, the 10% consumption tax still applies to devices bought for resale purposes.
Apologies for the inconvenience
In a statement, the company confirmed it no longer offers tax-free shopping in its stores and apologized for the inconvenience. The Nikkei Asia report highlights the "unusually large" back tax charge "underscores a glaring loophole in Japan's unique tax-free shopping rules."
"Tax-exempt purchases of consumables such as cosmetics or pharmaceuticals are limited to 500,000 yen, but no cap exists for general goods like home electronics," the report explains. "Stores are responsible for covering unpaid taxes on any purchases failing to meet the requirements that slip through the cracks."
Nikkei reports that tax authorities have pulled in 86.9 billion yen in back tax consumption payments in the year through June. The total levied from Apple represents a huge portion of that (more than 15%).
As the report notes, Japan's tax exemption system is unique in that it offers tax reductions to customers at the point of purchase. Elsewhere in the world, customers are usually required to reclaim their taxes when they leave the country by filling in paperwork.
Apple operates 10 retail stores in Japan, including five in the capital, Tokyo. Earlier this year Apple announced it was demolishing and relocating its historic Apple Store Ginza in Tokyo. The Ginza store was Apple's first retail location outside of the U.S.
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Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design.
Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple. Follow him on Twitter @stephenwarwick9
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