Toyota sticks to Prius tax story

The chairman of Toyota Motor Thailand (TMT) has reiterated that the carmaker has not evaded import duties on Prius components, saying they were imported under the free-trade agreement between Thailand and Japan.

The case, which involves differing legal interpretations of customs rules, is currently being appealed at the Customs Department, said Pramon Sutivong.

His comments came after the National Anti-Corruption Network asked the Finance Ministry to investigate whether TMT had understated its taxes by claiming the hybrid car was imported as a completely knocked-down (CKD) vehicle.

Pramon: Differing legal viewpoints

The import duty on CKD vehicles that are assembled in Thailand is far lower than on imported vehicles that have been assembled abroad. The NACN believes the car is almost fully assembled outside Thailand and thus should be categorised as an import.

If the Prius is judged to be an imported car, Toyota would be liable for taxes of about 30 billion baht based on domestic Prius sales, not 11 billion as recently demanded by the Customs Department.

The department says Toyota must pay 11 billion baht in retroactive taxes for 245 shipments of components used to produce 20,000 Prius cars from 2010-12 because the shipments were made without its approval.

Under the free-trade pact, formally known as the the Japan-Thailand Economic Partnership Agreement (JTEPA), carmakers receiving Customs approval before importing CKD components are subject to a 30% tax rate.

The department believes Toyota is subject to an 80% tariff since it did not seek approval.

Mr Pramon, who is also the chairman of the Anti-Corruption Organisation of Thailand, said his company could prove it had a local assembly line for the Prius model.

Earlier, TMT affirmed that all Prius cars sold in Thailand were made at its Chachoengsao factory.