Apple Japan is reportedly being charged roughly 14 billion yen, or about 105 million dollars, in additional taxes for sales of iPhones to foreign travelers who were wrongly exempted from paying consumption tax.

Japan permits foreign visitors to buy items, including souvenirs and daily sundries, without paying the consumption tax. But the exemption does not apply to items bought for resale.

Tax officials reportedly said the exemption could not be applied to tax-free sales by Apple Japan amounting to 140 billion yen over two years through September 2021.

Sources say Tokyo tax officials had found the phones were being sold at shops directly operated by the tech giant's Japan branch.

Travelers from China reportedly were purchasing several hundred iPhones at a time without paying consumption tax.

In other cases, resellers reportedly solicited travelers on social media and paid them to buy the products.

The practice is thought to have been fueled by the lower price of iPhones in Japan.

Apple Japan says it halted tax-free sales at Apple Stores in June and did not comment on the additional tax levy.

The amount is said to be one of the highest on record for tax-free sales.