Apple Japan hit with $98 million in additional taxes

AppleInsider

Tokyo authorities are charging Apple Japan $98 million in additional taxes for incorrectly exempting tourists and resellers from a consumption tax.

Apple Japan hit with additional taxes

Authorities had discovered bulk purchases of iPhone and other devices and certain Apple stores in the country, Nikkei reports. At least one transaction involved an individual buying hundreds of iPhones at once, strongly suggesting that Apple didn't tax a possible reseller.

Japan offers tax-free shopping for visitors staying less than six months to buy certain goods without paying the country's 10% consumption tax. However, the exemption doesn't apply to purchases for resell purposes.

Apple voluntarily stopped offering tax-free shopping in June. Apple Japan has reportedly already filed an amended tax return.

Apple is one of many companies needing to pay back taxes. Tax authorities in Japan found about 24,000 transactions that should have fallen under the consumption tax in the year through June. The country levied 86.9 billion yen in taxes and penalties, up 11% from five years prior.

Apple CEO Tim Cook SVP of marketing Greg Joswiak traveled to parts of Japan in December, visiting various developers such as Konami as well as Sony, one of the company's suppliers. Cook also met with Fumio Kishida, the Prime Minister of Japan.

"It's incredible to be back in a country that's so near and dear to our hearts at Apple," he tweeted. "Thank you, @kishida230, for the warm reception. We're looking forward to continuing to grow and invest across Japan."

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9secondkox2

Japan needs to PROVE that Apple was incorrect. These items may not have been for resale. 

For example, a company my girlfriend works for buys massive amounts of iPads and iPhones and Apple Watches every year to give away as employee rewards, raffle ticket awards, and employee morale party prizes. 

Someone coming and snd buying a bunch of stuff doesn’t equal resale. 

mattinoz

9secondkox2 said:

Japan needs to PROVE that Apple was incorrect. These items may not have been for resale. 

For example, a company my girlfriend works for buys massive amounts of iPads and iPhones and Apple Watches every year to give away as employee rewards, raffle ticket awards, and employee morale party prizes. 

Someone coming and snd buying a bunch of stuff doesn’t equal resale. 

Under many tax codes that is no different to resale those companies would've needed to pay all the correct tax on those items and many a fringe benefits tax depending on the country. 

Bonus is still effectively a reward for the work done just like the basic salary is.

entropys

Why doesn’t Japan simply reimburse the GST at the departure points for all travelers? Just show the product and the invoice with the GST on it and the government pays the GST back to the traveler.  That way the retailers don’t need to set up special arrangements, and there is no room for “mistakes”.

Just like many countries with a GST do right now. Even citizens can then get the exemption as it is an incentive to buy domestically rather than buy OS.

edited December 2022

lukei

9secondkox2 said:

Japan needs to PROVE that Apple was incorrect. These items may not have been for resale. 

For example, a company my girlfriend works for buys massive amounts of iPads and iPhones and Apple Watches every year to give away as employee rewards, raffle ticket awards, and employee morale party prizes. 

Someone coming and snd buying a bunch of stuff doesn’t equal resale. 

Because this is a company purchase and not relevant to the tax free tourist consumer sales process 

lukei

entropys said:

Why doesn’t Japan simply reimburse the GST at the departure points for all travelers? Just show the product and the invoice with the GST on it and the government pays the GST back to the traveler.  That way the retailers don’t need to set up special arrangements, and there is no room for “mistakes”.

Just like many countries with a GST do right now. Even citizens can then get the exemption as it is an incentive to buy domestically rather than buy OS.

Because this adds friction to the process and reduces sales at retailers. 

caiparsons

The 2.2% rate for income tax on source is specific to the Micro Entrepreneur entity, and it's on top of the 22% social contributions.