Chinese man charged sales tax after huge purchases

Tax officials in western Japan have reportedly levied a consumption tax of 14 million yen, or about 128,000 dollars, on a Chinese man who made huge purchases using Japan's tax-free shopping system.

The Osaka Regional Taxation Bureau suspects the man resold the items and is therefore not eligible for the tax exemptions.

The man is believed to have bought goods such as clothes and accessories worth 140 million yen, or about 1.28 million dollars, at three department stores in Osaka from May to July of last year.
The large purchases came to the attention of the tax officials.

The man is said to have explained that he sent the items abroad as gifts, but he did not have the documents showing that he had. Such documents are necessary for the tax exemption.

Japan's law governing the consumption tax offers a tax-free shopping scheme to inbound travelers for purchases of items for everyday use, but this system does not apply if the goods are resold.

In April of last year, an electronic system was introduced in which the passport data and purchase records of shoppers using the tax-free system are sent to the National Tax Agency. From October this year, all stores will be required to install this system.

The tax officials are believed to have used this system in their investigation of this case.

The number of tax-free stores in Japan has increased to about 55,000 in response to the rising number of foreign travelers. Authorities have in turn been faced with a spate of cases in which businesses or individuals used the system for commercial purposes.