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Toyota is facing a bribery probe in Thailand over the tax dispute

Toyota is facing a bribery probe in Thailand over the tax dispute

Toyota is investigating in Thailand for allegedly attempting to bribe local officials as a result of a tax dispute over allegations hired by the world’s largest automakers, Thai authorities, court documents and a person familiar with the matter have reported.

The probe continues an archiving last month, Toyota revealed that it had reported “violations against purchase” related to the Thai subsidiary to the U.S. Department of Justice and the Securities and Exchange Commission.

Toyota is one of Thailand’s largest foreign investors. It offers a wide range of cars, vans and pick-up trucks for the local market and export. The country is home to Toyota’s largest manufacturing hub in Southeast Asia. Prior to the Covid-19 pandemic, car sales were strong in a market with a 31 percent share.

Earlier this month, the Thai Court of Justice said in a statement that it would take action against any judge who took the bribe. In a news release on a foreign website, the statement described the move as “clarifying the facts” that the court was directly referring to the Toyota tax dispute.

“If the Court of Justice has received information or has explicitly seen that any judge has committed an act of corruption with its duty, whether bribery or not, the Court of Justice shall investigate and punish any act that dishonors the judge and impairs neutrality. Affects the court or society [to] lost faith in the Thai justice system, ”he said.

According to the court, the case involves a tax dispute worth Bt10bn ($ 319 million) over the importation of parts of the Prius hybrid model by Toyota Motor Thailand and the tax authorities.

The affair dates back to 2015 when Toyota’s Thai subsidiary was accused by local customs authorities of underestimating taxes, saying the imported Prius vehicles were assembled from fully impacted kits (CKDs) or later parts assembled in Thailand.

CKDs would be discounted tax rate under the Japanese-Thai free trade agreement, but if they were fully assembled before the cars were imported, they would get a much higher rate.

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

The Thai Court of Justice has said it has accepted a request to review the case, but has not yet begun hearing.

In its regulatory filing last month, Toyota warned that investigations into its U.S. subsidiary could lead to civil or criminal penalties, but the company did not provide details about the allegations.

In a statement, Toyota said it was cooperating with the investigation and declined to comment on the Thai tax dispute. “We take allegations 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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