Toyota Tax Case Revealed through Export Manifest
21 April 2014 13:46 WIB
TEMPO.CO, Jakarta – The Tax Directorate General of began examining allegations of transfer pricing by PT Toyota Motor Manufacturing Indonesia since in 2005. The investigation was conducted because Toyota claimed to have excess tax paid in that year and asked for a tax refund. Later, Toyota's annual tax returns in 2007 and 2008 were also investigated.
According to court documents obtained by Tempo, tax authorities' suspicions stemmed from Toyota's declining tax payments after the company's restructuring in 2003. Prior to 2003, Toyota was able to pay up to half a trillion rupiah in taxes every year. But in 2004, the company paid Rp168 billion in taxes.
According to the document, despite the profit decline, in the same year Toyota's production and sales turnover rose by 40 percent. The tax authorities then decided to probe into Toyota's sales price and cost structure Toyota more closely. From there on, they found trails of transfer pricing, and Toyota was alleged to have played up its transaction prices with affiliated parties.
In 2007, Toyota Motor Manufacturing in Indonesia exported 17,181 units of its Fortuner model to Singapore. From Toyota's audit, tax officials found that the company was selling cars lower than the cost of goods sold (COGS). This means that Toyota Indonesia is bearing the losses from the car sales to Singapore.
In late January, Tempo obtained a manifest document for the MV Trans Future 3 ship, which strengthens the suspicion. The manifest stated that Indonesia sent 307 units of Toyota Fortuner cars from Tanjung Priok Port to Batangas Port in Luzon, Philippines. The buyer was Toyota Motor Philippines Corporation, Toyota's business unit in the Philippines.
The ship, however, made a stop in Singapore before heading off to the Philippines. As a result, Toyota Indonesia did not enjoy the transaction's profit, as it went instead to Toyota Motor Asia Pacific Pte Ltd., Toyota's Singapore-based business unit.
Toyota refused to provide a statement regarding the case. Johnny Darmawan, vice president of Toyota Motor Manufacturing, only said that the company is still waiting for Tax Court's decision.
BUDI RIZA | AGOENG WIJAYA | SUKMA N. LOPPIES | RUMBADI DALLE
