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Toyota is being investigated in Thailand for allegations that consultants hired by the world’s largest vehicle manufacturer tried to bribe local officials over a tax dispute, according to Thai authorities, court documents and a person with knowledge of the matter.
Follow the probe a presentation last month, in which Toyota revealed it had reported “possible bribery violations” related to its Thai subsidiary to the U.S. Department of Justice and the Stock Exchange Commission.
Toyota is one of the largest 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 Toyota’s largest manufacturing hub in Southeast Asia. Prior to the Covid-19 pandemic, car sales had been strong in a market where it had a 31% share.
Earlier this month, the Thai Court of Justice said in a statement that it would take action against any of its judges who were deemed to have bribed. The statement, which the court described as a step to “clarify facts” in a news report on a foreign website, referred directly to a tax dispute involving Toyota.
“If the Court of Justice has received information or has explicitly found that any judge has committed an act of corruption in his charge, whether it is bribery or not, the Court of Justice shall investigate and punish decisively any action that dishonors judges. , which undermines the neutrality of the court, or provokes society [to] it loses faith in the Thai justice system, ”he said.
According to the court, the case involves a Bt10bn ($ 319 million) tax dispute between Toyota Motor Thailand and tax authorities over imports of parts for its Prius hybrid model.
The affair 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 demolished kits (CKD) or imported parts that they were later assembled in Thailand.
CKDs would have been subject to a discounted tax rate under a Japanese-Thai free trade agreement, but if the cars were fully assembled before they were imported they would have attracted a much higher rate.
Toyota appealed against the decision of the customs authorities to impose a higher duty in 2015, but lost.
The Thai Court of Justice has said it had accepted a request to review the case, but had not yet begun to hear it.
In its regulatory filing last month, Toyota warned that U.S. investigations into its Thai subsidiary could lead to civil or criminal sanctions, but the company has not revealed any details about the allegations.
In a statement, Toyota said it is cooperating with the investigations and declined to comment on the tax dispute in Thailand. “We take all 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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