Thailand Bills Toyota, Isuzu Over Taxes, Tariffs

Toyota and Isuzu are told to cough up 13.5 billion baht ($413 million) in tariffs and taxes Thailand’s Customs Dept. says they underpaid on parts imported for their assembly lines.

The department is billing Toyota for TB11.7 billion ($358 million) for parts imported from Japan between 2010 and 2012 for the production of its Prius hybrid car. It alleges the automaker misdeclared 245 shipments of components used to produce 20,000 Prius cars.

Isuzu is being assessed TB1.8 billion ($55 million) for the imports of transmissions from the Philippines between 2000 and 2002.

The department says Toyota owes TB7.6 billion ($232.5 million) in import duties, TB2 billion ($61.8 million) in excise taxes, TB1.8 billion ($55.6 million) in value-added tax and TB216 million ($6.6 million) in local taxes.

The department began trying to collect the money in 2012, but Toyota launched an appeal in which the two sides disagreed on the interpretation of a clause in the free-trade agreement between Thailand and Japan.

Under the pact, automakers who obtain approval before importing components for completely knocked-down vehicles pay a 30% tax rate on the parts. Toyota assembles Prius cars at its factory in Chachoengsao and the department said it had to pay an 80% tariff because it did not seek the required approval.

Somchai says Isuzu owes the extra money because while its imports are entitled to a tariff cut to 5% from 42% under the ASEAN industrial-cooperation scheme, the transmissions’ import value exceeded what was allowed.

The Bangkok Post says the Customs Dept.’s appeal committee ruled Isuzu should pay the usual tax rate of 42%, and the TB1.8 billion assessment includes interest, penalty fees and the shortfall in tax payments.