Thailand's top court rules Toyota unit must pay US$272m in import duties

BANGKOK: Thailand Supreme Court today upheld a lower court ruling that the local unit of Toyota Motor Corp owed the government 10 billion baht (RM1.23bil or US$272mil) in extra taxes for importing components not subject to a reduced tariff.

The court was handling an appeal against a 2019 ruling that the company must pay duties on some parts imported from Japan, which were for its Prius petrol-electric hybrid model assembled in Thailand between 2010 and 2012.

The court agreed with the previous decision that the imported items should be treated as complete knock-down kits, with an 80% tariff rate, instead of as auto parts, meaning they were not eligible for a reduced rate of 30% under a Japan-Thailand Economic Partnership Agreement (JTEPA).

Toyota's Thailand unit in a written statement said it was paying the lower tax rate for imported Prius parts based on JTEPA, but it respected the ruling and would comply.

The additional tax was owed on more than 20,000 Prius vehicles assembled at Toyota's Gateway factory between 2010 - 2012, according to earlier media reports.

Toyota also produces petrol-engine and hybrid-engine Camry sedans in Thailand, which were not subject to additional tariffs because the majority of parts are procured locally.