Japan's Toyota Loses Tariff Dispute with Thailand... Imposed Tax of Over 400 Billion Won

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Japanese automobile company Toyota has been finally defeated in a lawsuit over tax issues with the Thai tax authorities and will be imposed with taxes exceeding 400 billion KRW.

According to local media such as the Bangkok Post and foreign news on the 16th, the Thai Supreme Court confirmed the previous ruling the day before, which imposed taxes of 11.63 billion baht (approximately 437.8 billion KRW) on Toyota for omitted customs duties and import taxes on parts imported from Japan. This ruling concludes a long-standing customs dispute over Japanese parts imported by Toyota Thailand from 2010 to 2012 for assembling the Prius.

Earlier in 2015, Toyota filed a lawsuit claiming that tariffs applied to imported parts should be reduced or exempted under the Japan-Thailand Economic Partnership Agreement (JTEPA). The tax authorities imposed tariffs at the level of finished vehicles, arguing that Toyota imported complete parts from Japan and only assembled them in Thailand, prompting legal action.

At that time, Japanese media analyzed that the Thai government was pressuring Toyota to use locally made Thai parts. The import tariff on automobile parts under JTEPA is 10%, which is much lower than the general 80% tariff on finished vehicle imports.

In the first trial in 2017, the plaintiff Toyota won, but the ruling was overturned in the second trial in 2019. The Supreme Court also judged that the parts imported by Toyota did not qualify for tariff reductions under JTEPA.

After the defeat on this day, Toyota stated in a press release that it "respects the Supreme Court's ruling and will comply with it." Toyota is the world's number one automobile seller and also holds the top position in the Thai market.

This content was produced with the assistance of AI translation services.