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Toyota appeals against $327 mln tax bill in Thailand

Toyota is appealing against a Thai government order to pay very high taxes for importing parts from Japan.

business Updated: Jun 19, 2015 12:40 IST

Toyota Motor Corp said its Thai subsidiary is appealing against a Thai government order to pay additional taxes that the Nikkei business daily said would total more than 11 billion baht ($327 million).

The Thai government has ruled that parts imported from Japan to assemble the Prius gas-electric hybrid vehicle in Thailand should be treated as complete knock-down kits, with an 80% tariff rate, instead of as auto parts, with a 10% rate, a Toyota spokeswoman said.

More than half of the parts used in the locally assembled Prius are imported from Japan, she said. Toyota does not disclose the percentage of parts procured in Thailand. The additional tax was owed on more than 20,000 Prius vehicles assembled at Toyota's Gateway factory between 2010 and 2012, the Nikkei reported.

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

Early this year, Toyota forecast its sales in Thailand in 2015 would rise 0.9% to 330,000 vehicles, following a sharp 27% downturn the previous year due to political turmoil.

It predicted industry-wide growth in Thailand this year of 4.3%, to 920,000 vehicles. Despite Toyota's large presence in the market, Thailand is a relatively modest portion of its global sales, which it expects to total 9 million vehicles in the current fiscal year that started in March.

First Published: Jun 19, 2015 12:33 IST