Japan charges Apple with $98 mn for overlooking abuses of rules

"We do not offer tax-free shopping at our stores. We apologize for the inconvenience," the company was quoted as saying.

Tokyo: Apple’s Japan unit has been charged $98 million in additional taxes by the authorities in Tokyo for overlooking abuses of rules covering duty-free purchases, the media reported.

Bulk purchases of iPhones by foreign shoppers were discovered at some Apple stores, reports Nikkei Asia, citing sources.

At least one transaction involved a single person purchasing hundreds of handsets all at once, implying that the store failed to tax a potential reseller.

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Tax-free shopping in Japan allows visitors staying for less than six months to purchase items such as souvenirs or everyday goods without having to pay the 10 per cent consumption tax, but this exemption does not apply to purchases for resale, according to the report.

Moreover, the report said that Apple Japan is believed to have filed an amended tax return, and the company also voluntarily stopped offering tax-free shopping in June.

“We do not offer tax-free shopping at our stores. We apologize for the inconvenience,” the company was quoted as saying.

Apple’s sales in Japan totalled $26 billion in fiscal 2022, according to the tech giant’s latest annual report.

Last year, the European Commission issued antitrust charges against Apple as it found that the company broke EU competition rules with its App Store policies.

The Commission believed Apple has a “dominant position in the market for the distribution of music streaming apps through its App Store”.

“Apple’s rules distort competition in the market for music streaming services by raising the costs of competing music streaming app developers,” The Verge quoted the Commission as saying in a statement.

“This, in turn, leads to higher prices for consumers for their in-app music subscriptions on iOS devices,” it added.

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