Trade compliance & HS Classification is key

Many companies don’t realize how important it is to have a good system for trade and customs compliance. The correct HS code when doing import and export really matters. Not only can the correct code and a transparent compliance model save money from day one, it can also reduce risk and manage liability. When Governments all around the wirld are getting increasibgly autonated and when recenue collection comes into focus in a post-pandemic world, it can become a challenge to meet the requirments for many colpanies. In addition, classification and documentation sometimes is challenged, often long time after the events took place.

In a case this week as reported by Reuters Thailand Supreme Court on Thursday upheld a lower court ruling that the local unit of Toyota Motor Corp (7203.T) owed the government 10 billion baht ($272.11 million) in extra taxes for importing components not subject to a reduced tariff.

The court was handling an appeal against a 2019 ruling that the company must pay duties on some parts imported from Japan, which were for its Prius gas-electric hybrid model assembled in Thailand between 2010 and 2012.

The court agreed with the previous decision that the imported items should be treated as complete knock-down kits, with an 80% tariff rate, instead of as auto parts, meaning they were not eligible for a reduced rate of 30% under a Japan-Thailand Economic Partnership Agreement (JTEPA).

Toyota’s Thailand unit in a written statement said it was paying the lower tax rate for imported Prius parts based on JTEPA, but it respected the ruling and would comply.

To avoid this, ask the experts and use the digital tools avsikble today to do your HS Classificstion on goods and to manage your trade compliance.

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Source: Reuters