Apple Billed by Japan for IDR 1.5 Trillion in Tax because of Tourists Buying iPhones

Apple is taxable in Japan. (photo: dock. unsplash)

JAKARTA - Apple has just been charged an additional tax of around USD 98 million or the equivalent of IDR 1.5 trillion for its business in Japan. As a result, sales of its products are tax-free.

First reported by Nikkei Asia, Tokyo authorities found retailers making purchases of hundreds of iPhones and other devices without paying the appropriate taxes.

The purchases were made by overseas buyers or tourists at several Apple stores. One transaction, at least involving one person buying hundreds of devices at once. This event might indicate the store is skipping taxes for resellers.

Tourists spending less than six months in Japan don't have to pay the 10 percent consumption tax to buy souvenirs or everyday items, but that doesn't mean they can buy multiple gadgets at once without paying the due tax.

The technology giant based in Cupertino, United States (US) is claimed to have filed an amended tax return. In fact, Apple has stopped offering tax-free shopping since June.

At this time, it said Apple does not provide duty-free shopping in their stores, and apologized for the inconvenience.

Nikkei Asia stated in its press release that the unusually large tax-back fee highlights a glaring loophole in Japan's unique tax-free shopping regulations.

Cosmetics or medicines are limited to 500 thousand yen, equivalent to Rp. 58 million, while general items such as household electronics do not have a maximum limit that can be spent by tourists.

A survey by the tax authorities found about 24.000 cases of company failure to report consumption tax payments in the year to June. The record total of 86.9 billion yen was equivalent to IDR 10.2 trillion in back taxes collected, up 11 percent from the previous five years.

The Japan Department Store Association report quoted from BGR, Thursday, December 29 revealed, the country has made prioritizing the tourism and consumption sectors at the core of its growth strategy since 2012.

They added duty free flights and shops. This is because tax-free purchases can entice tourists to shop, setting a third consecutive annual record in 2019 with more than 340 billion yen.