Japan dept. store faces penalty for tax-free sales to foreigners with permanent residency

OSAKA -- Major department store operator Takashimaya Co. has been hit with additional taxes totaling approximately 570 million yen (roughly $3.9 million), including underreported additional taxes, for selling goods without meeting consumption tax exemption requirements, the Mainichi Shimbun has learned.

The company based in Osaka's Chuo Ward refuted that its tax-free sales were appropriate, and said that it would "claim legitimacy through appropriate procedures."

Tax-free sales are allowed only for foreign tourists who take goods out of Japan for their own consumption.

According to Takashimaya, several of its stores have been pointed out as having engaged in tax-free sales to foreign customers with permanent resident status in Japan. As a result of a tax audit, the Osaka Regional Taxation Bureau has apparently determined that a total of approximately 5 billion yen (some $34 million) of sales for the two years through February 2022 do not meet the tax exemption requirements.

Meanwhile, the Takashimaya representative claimed that there is a difference of opinion with the tax authorities. The company claims that there is a system that allows tax-free sales even for permanent residents of Japan if certain conditions are met.

Regarding tax-free sales, a number of major department stores, including Hankyu Hanshin, Isetan Mitsukoshi and Kintetsu, have been cited for failing to declare sales without meeting the requirements.

(Japanese original by Chinatsu Ide, Osaka City News Department)