Thailand’s Supreme Court Orders Toyota to Pay $272Million in Taxes

The Thai Supreme Court upheld a lower court ruling on Thursday that Toyota Motor Corp’s local unit owed the government $272.11 million in extra taxes for importing components not subject to a reduced tariff.

The court heard an appeal from a 2019 ruling that the company was required to pay duties on some parts imported from Japan for its Prius gas-electric hybrid model, which was 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, rather than auto parts, which meant they were ineligible for a 30% tariff reduction under a Japan-Thailand Economic Partnership Agreement (JTEPA).

In a written statement, Toyota’s Thailand unit said that while it was paying the lower tax rate for imported Prius parts under JTEPA, it respected the ruling and would comply.

According to previous media reports, the additional tax was owed on more than 20,000 Prius vehicles assembled at Toyota’s Gateway plant between 2010 and 2012.

Toyota also manufactures gasoline-powered and hybrid-powered Camry sedans in Thailand, exempting additional tariffs because most parts are sourced locally.

Meanwhile, Toyota announced it would discontinue production of the Vios model in Thailand; Vios sales totalled 1,829 in the year’s first six months, compared to 10,648 for the Yaris Ativ sedan and 14,715 for the Yaris hatchback.

The hybrid Yaris Ativ is expected to be released next year.

Toyota Vios Cancelled in Thailand

Meanwhile, Toyota has announced it will crease production of the Vios model in Thailand. Toyota sold 142,032 vehicles in Thailand in the first six months of the year, a 21.2 percent increase over the same period last year. In the first six months, it sold 38,894 passenger cars, a 30.9 percent increase.

According to TMT’s president, Noriaki Yamashita, the company aims to sell 290,000 cars this year, representing a 33% share of the Thai market and a 21% increase over last year.

According to Yamashita, Toyota is expected to produce 659,400 vehicles this year, a 28.3% increase over last year.

“The Thai economy is expected to recover in the second half of the year due to the government’s economic stimulus measures,” he said.

The TMT president predicted that all car manufacturers in Thailand would produce 880,000 vehicles this year, a 16% increase over last year.