Isuzu and Toyota Slapped with Back Tax Bills

[Jacob Maslow]

Isuzu Motors Co and Toyota Motor Thailand Co have been slapped with back tax bills. The Customs Department is seeking 13.46 billion baht in taxes and tariffs on part imports for assembly lines.

The department sent Toyota a bill for 11.67 billion baht for parts it imported from Japan from 2010-2012. The parts were used to produce Prius hybrid vehicles in Thailand. Department director-general Somchai Sujjapongse stated that the bill was based off of 224 invoices. Of the 11.67 billion baht total, 7.6 billion was for import duty, 1.82 billion for VAT, 2.02 billion for excise taxes and 216 million for local tax.

The department sent a notice to Toyota in 2012 about the additional payments. The company appealed the decision, but a final ruling has been made, and the company will be required to pay the extra taxes.

Isuzu will also have to pay 1.795 billion baht more for the import of transmission sets from the Philippines. Although the imports were entitled to a tariff cut, the import value of the parts exceeded the allowed maximum value. Isuzu will have to pay 624 million for the loss, 43 million in VAT, an additional duty of 1.04 billion baht, an additional 43 million baht for a VAT fine, and yet another 43 million baht in additional VAT.

Thus far, the department has collected 58.99 billion of import duty in fiscal year 2015.

-- 2015-04-25

[NeverSure]

There are other places to manufacture other than Thailand. Those places are much more business friendly and don't have a 300 baht per day minimum wage. The Philippines is aggressively seeking manufacturers and even offering incentives. The Philippines has a much higher birth rate (Catholic) and many more people in the age group to work in factories.

Thainess.

[zaphod reborn]

The thoroughly corrupt customs department will be the death-knell of Thailand's automotive manufacturing industry. Their paranoia about auto parts importing will kill the industry.

[Thaddeus]

Yay, bite that hand, shoot that foot.

[Just1Voice]

That's right. Tax the hell out of some of your biggest investors, and before long there won't be any investors, because they've all moved to Vietnam, Malaysia and the Philippines.

[butch333]

well , it seems that they ll never understand . no vue to the future . small people with small brain , normal when you think that you're the best country in the world ,the best culture in the world , the best education , the most clever population of the world . how much time have them to loose the face to understand ? the governement ask farangs compagnies to invest in thailand and in the same time they killed the farangs compagnies with the incomes taxes . i hope that toyota isuzu and many others mega compagnies close here and go to others countries like philipine vietnam . when i see the professionalism of the workers here , the lazyness of the staff , the ridicoulus business performance ( 10 time more staff then in europe for the same work ) , i don't understand why the farangs compagnies want to make business here .

[bdenner]

Remember the fire appliances that remained on the docks of Laem Chabang for years. The fools can't even get it right between themselves!

[konying]

Toyota and Isuzu do make a comfortable living in Thailand also enjoying some other perks but this is not a small bill, it is big enough to piss off any company.

Even if Toyota decides to shift 1 model manufacturing it would cost Thailand much more than they would collect.

Do not know why but it seems Thai government has made a number of decisions leading up to ASEAN to upset a number of businesses.

Arrogance or total lack of understanding ? Will have to wait and see

[Shurup]

Toyota will loose a lot more in lost sales if they move the manufacture to other countries, they'd still want to sell their vehicles here but it means importing them so either the vehicles prices would jump (more likely) or profit margin would shrink.

It's a cost of doing business in Thailand.

[harrry]

Not so sure they will be able to sell some of those vehicle models made here in Thailand. Exclusively export. Vigos probably other than that the small car market is saturated and there is little larger car market for their wares. May be in their interest to move that production overseas if floods and taxes and tea money continues.

Edited April 26, 2015 by harrry

[ToddinChonburi]

Maybe they just really owe the money !!!!! I am sure the Japanese are honest and would never cheat the Thai's.

[konying]

Maybe they just really owe the money !!!!! I am sure the Japanese are honest and would never cheat the Thai's.

Nothing to do with Japanese, read the OP again. Everything to do with customs department

[harrry]

Maybe they just really owe the money !!!!! I am sure the Japanese are honest and would never cheat the Thai's.

They apparently did not pay duty etc on parts for electric vehicles which the act said were free of duty. They got a slapped a bill for duty on the parts which were put into exported vehicles as the govt redefined things to mean only duty free on parts for electric vehicles sold here and retrospectively taxed them

Not surprising as they all the time give a price for say addmission and then multiple charge farangs.

[Pib]

The department sent a notice to Toyota in 2012 about the additional payments. The company appealed the decision, but a final ruling has been made, and the company will be required to pay the extra taxes.

If the disapproved appeal was to the customs dept I expect Toyota and Isuzu will now take it to court.

[quandow]

If I understand what I've read here correctly, Thailand changed the rules after the fact and want to stick it to Toyota and Isuzu.

Short-sighted nonsense = Thainess

[Jonmarleesco]

Perhaps they should consider moving to the UK.

[fred Kubasa]

Considering that Toyota contributes about 28 % of ALL Thai income in various ways as well as large charitable donations, this move could be " The straw that breaks the camel's back ". Several other nations are hungrily seeking Toyota business, offering incentives unheard of in Thailand and you can be sure Toyota is listening. They have stayed with Thailand thru thick and thin and, now, hit with a RETOACTIVE tax bill while their autos prices can't be boosted to absorb. Thailand may be right and legal but having the right to do something does not mean you HAVE to do it !

[Cardiff1963]

There are other places to manufacture other than Thailand. Those places are much more business friendly and don't have a 300 baht per day minimum wage. The Philippines is aggressively seeking manufacturers and even offering incentives. The Philippines has a much higher birth rate (Catholic) and many more people in the age group to work in factories.

Thainess.

Do you really think 300THB a dayis too much? Youcan't expect the rest of the world to keep Yanks in fat <deleted>

[FangFerang]

Toyota will loose a lot more in lost sales if they move the manufacture to other countries, they'd still want to sell their vehicles here but it means importing them so either the vehicles prices would jump (more likely) or profit margin would shrink.

It's a cost of doing business in Thailand.

Car sales are dead here--it's a matter of the Thais trying to cash in before the companies cash out. The first time buyer incentive backfired, except to banks, and now it's all over but the crying.

[konying]

There are other places to manufacture other than Thailand. Those places are much more business friendly and don't have a 300 baht per day minimum wage. The Philippines is aggressively seeking manufacturers and even offering incentives. The Philippines has a much higher birth rate (Catholic) and many more people in the age group to work in factories.

Thainess.

Do you really think 300THB a dayis too much? Youcan't expect the rest of the world to keep Yanks in fat <deleted>

Have you been to Thailand yet? Do you know the prices?

Have you worked in Thailand? Have you worked with Thai?

I am guessing the answer is a NO, and hence its a NO, do not spout utter nonsense just to appear intelligent

[NeverSure]

There are other places to manufacture other than Thailand. Those places are much more business friendly and don't have a 300 baht per day minimum wage. The Philippines is aggressively seeking manufacturers and even offering incentives. The Philippines has a much higher birth rate (Catholic) and many more people in the age group to work in factories.

Thainess.

Do you really think 300THB a dayis too much? Youcan't expect the rest of the world to keep Yanks in fat <deleted>

What do the Yanks have to do with Japanese auto manufacturers getting taxed? <deleted>

[shaurene]

Isuzu and Toyota will be planning their next moves, ie: break down their factories and move to the Phillapines

And then when the Thai authorities come running to them the Japanese will remember how they where treated.

[yellowboat]

Toyota will loose a lot more in lost sales if they move the manufacture to other countries, they'd still want to sell their vehicles here but it means importing them so either the vehicles prices would jump (more likely) or profit margin would shrink.

It's a cost of doing business in Thailand.

Maybe, They can still manufacture in Thailand for the local market and start new factories elsewhere. Thailand loses some cream, but they do not really care. They live for the moment and not for the future. If these taxes are unjust, these companies will act in the accordance to their financial interest. Cambodia and Indonesia are far more interested in making long term deals than the Thais.

[Thaddeus]

There are other places to manufacture other than Thailand. Those places are much more business friendly and don't have a 300 baht per day minimum wage. The Philippines is aggressively seeking manufacturers and even offering incentives. The Philippines has a much higher birth rate (Catholic) and many more people in the age group to work in factories.

Thainess.

Do you really think 300THB a dayis too much? Youcan't expect the rest of the world to keep Yanks in fat <deleted>

Have you been to Thailand yet? Do you know the prices?

Have you worked in Thailand? Have you worked with Thai?

I am guessing the answer is a NO, and hence its a NO, do not spout utter nonsense just to appear intelligent

I don't think that intelligence is a requirement to join bigot club, it would probably be positively feared.

[NeverSure]

Toyota will loose a lot more in lost sales if they move the manufacture to other countries, they'd still want to sell their vehicles here but it means importing them so either the vehicles prices would jump (more likely) or profit margin would shrink.

It's a cost of doing business in Thailand.

Notice that Thailand is forever talking about its exports which is one of the driving forces of the economy. Thai exports bring new money into the country after creating new wealth in the form of new cars and other things.

If the auto manufacturers pulled out of Thailand all but enough to manufacture for Thailand alone, this income would be lost and there would be even fewer cars sold inside Thailand because fewer jobs would exist. It would be a downward spiral.

[Shurup]

You're right NS, I forgot that Thailand is a huge exporter for the Asia and other countries all over the world. Good point.

[Cake Monster]

Thailand decides to send Toyota a huge unpaid " back tax " demand, and what do you know ?. Earlier in the week Toyota made an announcement that they were breaking from their self imposed capital investment spending hibernation to build new plants in - Yes, you guessed it - Mexico. Repeat Mexico, and not Thailand.

How to win friends and influence business from the Thais

[selftaopath]

That's right. Tax the hell out of some of your biggest investors, and before long there won't be any investors, because they've all moved to Vietnam, Malaysia and the Philippines.

Ah yessssss but "farangs" do not understand Thainess and how very very very SPECIAL Thailand is... LOL or so some might think.

Honestly Thailand is deserving of some very very ?????? different Kharma..... and I think as the world becomes more and more familiar with how Thailand's actions and thinking is Thailand will be in for a very "rude awakening." Pity the "little people" will suffer b/c they didn't have the chance to rob the Kingdom like the "special people" have.

[dinga]

The ill-informed, zenophobic and downright stupid posts in this thread are enough to drive a teetotaler to drink.

For God's sake, the issue presumably is a technical one about whether or not the correct amount of tax has been paid. That is a matter best left to the appropriate authorities/courts.

Thailand IS NOT unique = tax disputes are common in every country - especially when economic times ain't great.

I note that today's news reports that the Australian Tax Office reckons BHP owes an addition US$550 million in unpaid income taxes. Do you cretins think BHP will walk away from its Pilbara iron ore mines?

The final determination of tax properly due is properly left to the appropriate authorities in each country matter (of course, this may practically pose challenges,but the principle is crystal clear), It has SFA to do with (a) nationality of the taxpayer; ( country of dispute; © amount of investment; (d) feigned consequences.

In addition, Non-brain-dead folks know there is tremendous international attention now on resolving BEPS (Base Erosiion of Profit Split) - ie, ensuring in the future that major MNCs pay tax not just according to 'law', but perhaps where the profits are actually made.

&lt;deleted&gt; grow up and get informed.

[Berkshire]

The ill-informed, zenophobic and downright stupid posts in this thread are enough to drive a teetotaler to drink.

For God's sake, the issue presumably is a technical one about whether or not the correct amount of tax has been paid. That is a matter best left to the appropriate authorities/courts.

Thailand IS NOT unique = tax disputes are common in every country - especially when economic times ain't great.

I note that today's news reports that the Australian Tax Office reckons BHP owes an addition US$550 million in unpaid income taxes. Do you cretins think BHP will walk away from its Pilbara iron ore mines?

The final determination of tax properly due is properly left to the appropriate authorities in each country matter (of course, this may practically pose challenges,but the principle is crystal clear), It has SFA to do with (a) nationality of the taxpayer; ( country of dispute; © amount of investment; (d) feigned consequences.

In addition, Non-brain-dead folks know there is tremendous international attention now on resolving BEPS (Base Erosiion of Profit Split) - ie, ensuring in the future that major MNCs pay tax not just according to 'law', but perhaps where the profits are actually made.

<deleted> grow up and get informed.

My God, an intelligent post. Didn't think it was possible in a thread such as this. Well done Dinga.