Toyota faces Thai corruption investigation into tax dispute

Toyota is under investigation in Thailand over allegations that consultants hired by the world’s largest automaker attempted to bribe local officials in a tax dispute, Thai authorities, court documents and an individual say. aware of the file.

The probe followed a deposit Toyota last month disclosed that it had reported “possible anti-corruption violations” related to its Thai subsidiary to the US Department of Justice and the Securities Exchange Commission.

Toyota is one of the biggest foreign investors in Thailand, where it manufactures a wide range of cars, vans and vans for the local market and for export. The country is the largest Toyota manufacturing hub in Southeast Asia. Before the Covid-19 pandemic, Car sales had been strong in a market where it has a 31 percent share.

This month, the Thai Court of Justice said in a statement that it would take action against one of its judges convicted of bribery. The statement, which the court called “truth clarification” in a report broadcast on a foreign website, directly referred to a tax dispute involving Toyota.

“If the Court of Justice has received information or has explicitly found that a judge has committed an act of corruption within the framework of his duty, whether it is bribery or not, the Court of Justice will resolutely investigate and sanction any act that dishonors judges, undermines the neutrality of the tribunal, or provokes society [to] lose faith in the Thai justice system, ”he said.

According to the court, the case concerned a tax dispute worth Bt 10 billion ($ 320 million) between Toyota Motor Thailand and the tax authorities over imports of parts for its hybrid model Prius.

The case dates back to 2015, when Toyota’s Thai subsidiary was accused by local customs authorities of underestimating taxes by claiming that imported Prius vehicles were assembled from completely disassembled kits or imported parts which were then assembled in Thailand.

CKDs would have been subject to a reduced tax rate as part of a free trade agreement between Japan and Thailand, but if the cars had been fully assembled before being imported, they would have attracted a much higher rate. higher.

Toyota appealed against a decision by customs authorities to impose a higher duty in 2015, but lost.

The Thai Court of Justice said it had accepted a request for reconsideration of the case, but had yet to start hearing it.

In its regulatory filing last month, Toyota warned that US investigations into its Thai subsidiary could result in civil or criminal penalties, but the company did not disclose any details of the allegations.

In a statement, Toyota said it was cooperating with the investigations and declined to comment on the tax dispute in Thailand. “We take any allegation of wrongdoing seriously and are committed to ensuring that our business practices comply with all applicable government regulations,” he said.

The SEC and DOJ declined to comment.

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