Thailand’s highest court rules Toyota unit must pay $272 million in import duties

BANGKOK (Reuters) – Thailand’s Supreme Court on Thursday upheld a lower court ruling that the local unit of Toyota Motor Corp owed the government 10 billion baht ($272.11 million) in additional taxes for the import of components not subject to a reduced tariff.

The court was dealing with an appeal against a 2019 ruling that the company had to pay duty on certain parts imported from Japan, which were destined for its hybrid gas-electric Prius model assembled in Thailand between 2010 and 2012.

The court accepted the earlier ruling that the imported items should be treated as complete knock-down kits, with a duty rate of 80%, rather than auto parts, meaning they were not eligible for a reduced rate of 30% under a Japan-Thailand Economic Partnership Agreement (JTEPA).

Toyota’s Thai unit said in a written statement that it pays the lower tax rate for imported Prius parts based on JTEPA, but respects the ruling and will comply with it.

The additional tax was due on more than 20,000 Prius vehicles assembled at Toyota’s Gateway plant between 2010 and 2012, according to earlier news reports.

Toyota also produces gasoline-powered and hybrid-powered Camry sedans in Thailand, which were not subject to additional customs duties as the majority of parts are sourced locally.

($1 = 36.7500 baht)