Once again, a Big Tech firm has run afoul of local authorities and has been slapped with a hefty fine. This time, it is the Japan unit of Cupertino-headquartered Apple, which is being charged with a fine of 13 billion yen ($97.82 million). The fine has been levied due to Apple Japan’s practice of bulk sales of iPhones and other Apple devices to foreign tourists that were incorrectly exempted from the consumption tax.
The incident was first reported by Nikkei Asia on Monday, according to which, some Apple stores were involved in the bulk purchases of iPhones by foreign tourists and shoppers. In fact, at least one transaction saw hundreds of handsets being sold to an individual, the report by Nikkei added. It added that this suggests that the store “missed taxing a possible reseller,” which is not covered under Japan’s tax-exempt rules.
This development comes months after Apple voluntarily halted offering tax-free shopping at its stores (back in June). Later, the iPhone manufacturer confirmed the same to Nikkei, apologizing for the inconvenience. It is also believed to have filed an amended tax return.
As per Japan’s stance on shopping without taxes, tourists staying for a period of less than six months in the Asian country are allowed to make purchases without having to pay the consumption tax of 10%.
The amount for the purchases is capped at 500,000 yen for the purchase of consumables (such as pharmaceuticals), but there is no limit for the purchase of general goods (such as home electronics). In case of unpaid taxes on purchases that fail to meet the requirements, the stores are in charge of covering them.
These tax-exempt rules, however, does not apply to items sold or bought for resale purposes, and it is here that Apple’s Japan unit missed the trick. The tax authorities, by means of a survey, discovered that there were nearly 24,000 cases of failure by companies to report consumption tax payments in the year through June, so Apple is not the only tech behemoth under the radar.
Furthermore, the multi-million-dollar fine imposed upon Apple Japan comes alongside the Japan unit clocking a total of $26 billion in sales during the fiscal year 2022.
