Apple Japan Hit With £81m In Additional Taxes

Apple’s Japan unit faces a charge of 13 billion yen ($98m, £81m) in additional taxes from the Japanese government, the newspaper Nikkei has reported.

The additional charges are apparently for bulk sales of iPhones and other devices to foreign tourists who were incorrectly exempted from the country’s 10 percent consumption tax, Nikkei reported, citing unnamed sources.

Tourists staying in the country for less than six months are exempted from the tax, but the exemption doesn’t apply for items bought for the purpose of resale.

The report said bulk purchases had been discovered at some Apple Stores in Japan, with at least one involving an individual buying hundreds of iPhone handsets at once, suggesting the purchase should have been taxed under resale rules.

Bulk purchases

Apple Japan is believed to have filed an amended return, according to the paper.

Apple halted tax-free shopping in Japan in June and confirmed the service remains unavailable.

The company faces a far more significant tax challenge in the EU, where the European Commission said in 2016 the firm owed some 13.1bn euros (£12bn) in back taxes to Ireland due to a breach of state aid rules.

The General Court of the European Union overturned the decision in 2020 and the Commission’s appeal remains pending before the European Court of Justice, the bloc’s highest court.

The Commission in 2014 began its investigation of Apple’s tax arrangements in Ireland, and two years later concluded Apple had been able to avoid taxation on almost all profits generated in the EU single market.