Taxes Thailand sending money to Thai Bank

[GibsonYamaha]

Hi,

Has anybody heard that starting next year (2019) you have to pay taxes in Thailand when you send a big amount of money to your (Thai) bank from your bank (Holland)? Wil

 

[simoh1490]

Stop reading blogs, it's a bunch of nonsense, there's no such tax!

[GibsonYamaha]

Thx,  Simon!

[Pib]

Nope.

[IAMHERE]

I truly suspect there may be now. ????

[kuzie57]

You get taxed on your accounts here, its not much, but you do get taxed. I have herd nothing about taxing incomming money.

 

[Jimbo2014]

Stop giving them ideas!! ????

[nickmondo]

ridiculous.

of course they cant do that.

if they did, mass exodus!

 

[Speedhump]

1 hour ago, kuzie57 said:

You get taxed on your accounts here, its not much, but you do get taxed. I have herd nothing about taxing incomming money.

 

Can you clarify Kuzie? If a pensioner keeps THB 800k in his bank account  all year round for visa purposes, do you mean tax will be applied to it, even if it wasn't earned in Thailand? I never heard this, but it would affect a lot more people by around April 2019 if true! I guess this isn't what you meant. 

[simoh1490]

3 minutes ago, Speedhump said:

Can you clarify Kuzie? If a pensioner keeps THB 800k in his bank account  all year round for visa purposes, do you mean tax will be applied to it, even if it wasn't earned in Thailand? I never heard this, but it would affect a lot more people by around April 2019 if true! I guess this isn't what you meant. 

Savings accounts in Thailand typically have 15% tax withheld at source, most people can reclaim this from the Thai Revenue by filing a tax return each year. Note: the Thai tax year is the calendar year, the tax tables are here: http://www.rd.go.th/publish/6045.0.html

 

Obtaining a tax ID is very straightforward, as long as you spend at least 186 days in the country each year.

[arithai12]

11 minutes ago, Speedhump said:

Can you clarify Kuzie? If a pensioner keeps THB 800k in his bank account  all year round for visa purposes, do you mean tax will be applied to it, even if it wasn't earned in Thailand? I never heard this, but it would affect a lot more people by around April 2019 if true! I guess this isn't what you meant. 

 

4 minutes ago, simoh1490 said:

Savings accounts in Thailand typically have 15% tax withheld at source, most people can reclaim this from the Thai Revenue by filing a tax return each year. Note: the Thai tax year is the calendar year, the tax tables are here: http://www.rd.go.th/publish/6045.0.html

 

Obtaining a tax ID is very straightforward, as long as you spend at least 186 days in the country each year.

Just to clarify: it's the earning that gets taxed, not the capital.

And as already stated, it's a minimal tax.

[simoh1490]

20 minutes ago, arithai12 said:

 

Just to clarify: it's the earning that gets taxed, not the capital.

And as already stated, it's a minimal tax.

Correct, the interest earned is taxable, the principle is not.

 

EDIT TO ADD: Technically, income that is remitted to Thailand during the year it was earned, by residents, is taxable. In practice the Thai Revenue does not attempt to tax that money because it is nigh on impossible for them to distinguish between earned income and savings from overseas sources. It is possible that there is a link between this issue and the self dec certification issue for visa's that is so much in focus currently, dunno, pure speculation on my part.

Edited November 13, 2018 by simoh1490

[Caine]

Mark my words if there’s a Satang to be had this mob will sniff it out, very likely scenario 

[steve73]

I read somewhere that tax was applied to the interest, on savings of more than 2MM bt, irrespective of interest rate.

For a while I did have more than this and I was indeed taxed - but since dropping below 2MM for a few years (now I keep between 8-900k) there has been no tax deducted.

[simoh1490]

3 minutes ago, steve73 said:

I read somewhere that tax was applied to the interest, on savings of more than 2MM bt, irrespective of interest rate.

For a while I did have more than this and I was indeed taxed - but since dropping below 2MM for a few years (now I keep between 8-900k) there has been no tax deducted.

Tax is calculated on interest earned by all banks in Thailand, some banks however monitor the accrued interest earned and do not deduct tax until the threshold has been breached, the more money on deposit, the higher the chance of having to pay tax - clearly this is an interest rate related issue, when interest rates are low there is a reduced chance of account holders needing to pay tax, as interest rates rise the scenario changes.

[steve73]

5 minutes ago, simoh1490 said:

Tax is calculated on interest earned by all banks in Thailand, some banks however monitor the accrued interest earned and do not deduct tax until the threshold has been breached, the more money on deposit, the higher the chance of having to pay tax - clearly this is an interest rate related issue, when interest rates are low there is a reduced chance of account holders needing to pay tax, as interest rates rise the scenario changes.

Not so sure about that... I get a pretty shitty rate so my interest on >2MM is less than many get on just 800k - and they don't get taxed.... I could have claimed back the tax, but couldn't be bothered. 

[Pdavies99]

1 hour ago, simoh1490 said:

Savings accounts in Thailand typically have 15% tax withheld at source, most people can reclaim this from the Thai Revenue by filing a tax return each year. Note: the Thai tax year is the calendar year, the tax tables are here: http://www.rd.go.th/publish/6045.0.html

 

Obtaining a tax ID is very straightforward, as long as you spend at least 186 days in the country each year.

You should make your statement a little clearer, 15% witholding tax is only on any interest earnt, your 800K or whatever amount is not affected! Thanks!

[simoh1490]

4 minutes ago, steve73 said:

Not so sure about that... I get a pretty shitty rate so my interest on >2MM is less than many get on just 800k - and they don't get taxed.... I could have claimed back the tax, but couldn't be bothered. 

Standard savings rates are currently around 0.25%, fixed deposit rates are currently around 1.70% for one year. It sounds as though you had your 2 mill. in a standard savings account rather than a fixed rate account, oh well!

[simoh1490]

1 minute ago, Pdavies99 said:

You should make your statement a little clearer, 15% witholding tax is only on any interest earnt, your 800K or whatever amount is not affected! Thanks!

If you can't follow the conversation or have never had a bank account, don't interrupt, if you want more precise explanations, go google the answer.

[steve73]

34 minutes ago, simoh1490 said:

Standard savings rates are currently around 0.25%, fixed deposit rates are currently around 1.70% for one year. It sounds as though you had your 2 mill. in a standard savings account rather than a fixed rate account, oh well!

So where can I get 1.7% now... on my 800k & suitable for the extension? Definitely worth it now for the extra 10k per year. 

Edited November 13, 2018 by steve73

[simoh1490]

3 minutes ago, steve73 said:

So where can I get 1.7% now... on my 800k & suitable for the extension? Definitely worth it now for the extra 10k per year. 

UOB, 1.7%, 14 months - you can cash out at any time with only a loss of interest earned (which is replaced with the standard rate of savings interest).

[Pib]

On "fixed" savings account the 15% withholding applies to any amount of interest earned.  By fixed savings account I mean where it for a certain term....like say 6 months, 12 months, 15 months, etc., and you do not earn/receive the interest until the term matures after 6, 12, 15, etc., months.   However, on a regular savings account like most use for day-to-day living the 15% withholding only kicks-in when exceeding Bt20K interest earned per year.   A person can file an income tax return or refund request and get the entire withholding back assuming they are not working/earning other income in Thailand...easy process.  

 

[simoh1490]

5 minutes ago, Pib said:

On "fixed" savings account the 15% withholding applies to any amount of interest earned.  By fixed savings account I mean where it for a certain term....like say 6 months, 12 months, 15 months, etc., and you do not earn/receive the interest until the term matures after 6, 12, 15, etc., months.   However, on a regular savings account like most use for day-to-day living the 15% withholding only kicks-in when exceeding Bt20K interest earned per year.   A person can file an income tax return or refund request and get the entire withholding back assuming they are not working/earning other income in Thailand...easy process.  

 

In respect of fixed-term savings.....the 15% withholding applies regardless of whether the interest is paid monthly or at maturity.

[PFV]

With the change likely taking place next year regarding income-based retirement extensions, if it becomes necessary to deposit one's pension or SS payments directly into a Thai bank account, wouldn't this amount be subject to Thai income tax since it is income imported during the year it was earned?

[simoh1490]

Just now, PFV said:

With the change likely taking place next year regarding income-based retirement extensions, if it becomes necessary to deposit one's pension or SS payments directly into a Thai bank account, wouldn't this amount be subject to Thai income tax since it is income imported during the year it was earned?

Indeed, that's the potentially huge gotcha in all of this.

[Pib]

12 minutes ago, simoh1490 said:

In respect of fixed-term savings.....the 15% withholding applies regardless of whether the interest is paid monthly or at maturity.

Yea....with a fixed account they deduct the withholding tax anytime interest is paid.  With the fixed accounts I had they did not pay monthly but only upon maturity.   I don't do fixed accounts anymore....instead I use a Krungsri Mee Tai Dai account which currently pays 1.3% interest....pretty close to fixed account interest and around 3 times higher than a regular savings account.....and I can withdraw money at any time without any interest penalty like on a fixed account...and it comes with ibanking and a debit card.    I just ensure the balance I keep combined with the interest rate does not result in earning more Bt20K interest per year which would trigger a 15% withholding.  Although it's not a hard process to get the withholding refunded as I did such for around 4 years when still using fixed accounts, I prefer not to have to file for a refund.

 

[Pib]

12 minutes ago, PFV said:

With the change likely taking place next year regarding income-based retirement extensions, if it becomes necessary to deposit one's pension or SS payments directly into a Thai bank account, wouldn't this amount be subject to Thai income tax since it is income imported during the year it was earned?

It depends on if your home country has a tax treaty with Thailand and what the tax treaty says.  But say you were getting a U.S. "government" pension like social security, military retirement, etc., it would not be taxable by Thailand under the US-Thailand tax treaty. 

 

Tax Treaties can  be found at this Thai Revenue Dept webpage

http://www.rd.go.th/publish/766.0.html

Edited November 13, 2018 by Pib

[PFV]

19 minutes ago, Pib said:

It depends on if your home country has a tax treaty with Thailand and what the tax treaty says.  But say you were getting a U.S. "government" pension like social security, military retirement, etc., it would not be taxable by Thailand under the US-Thailand tax treaty. 

 

Tax Treaties can  be found at this Thai Revenue Dept webpage

http://www.rd.go.th/publish/766.0.html

Thank you for the Tax Treaty Table.

The following is for only for US citizens who are residents of Thailand

Pertaining to US Social Security, under Article 20.

Paragraph 1: subject to the provisions of paragraph 2 of Article 21 (Government Service), pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. [I interpret this as meaning taxable only in Thailand]

Paragraph 2: Notwithstanding the provisions of paragraph 1, social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first- mentioned State. [I interpret this as being taxable only in the US, thus invalidating P. 1]

 

However, if we look at dividends - another common source of retirement income - the situation appears different and fairly complicated.

Under Article 10.

Paragraph 1: Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. [Taxable in Thailand]

Paragraph 2: However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed
a)         10 percent of the gross amount of the dividends if the beneficial owner is a company which controls at least 10 percent of the voting power of the company paying the dividends; or
b)         15 percent of the gross amount of the dividends in all other cases.
This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

 

Does this mean that dividends imported in the year they are earned would indeed be taxed in Thailand, but that the US tax should be capped at 15% ?

BTW, it appears that interest is treated the same way (Article 11).

[topt]

54 minutes ago, PFV said:

wouldn't this amount be subject to Thai income tax since it is income imported during the year it was earned?

 

50 minutes ago, simoh1490 said:

Indeed, that's the potentially huge gotcha in all of this.

Agreed however potentially this is also the current case from what I understand from reading posters who talk about direct deposit of their pensions. If not coming directly but just from a bank account the thai revenue service would still not necessarily know it was not from previous accumulated savings.

[Baerboxer]

4 hours ago, kuzie57 said:

You get taxed on your accounts here, its not much, but you do get taxed. I have herd nothing about taxing incomming money.

 

 

You get taxed once the interest reaches a certain amount. It is deducted and paid by the bank from the interest. If you are a non earner and non tax payer you will get the tax refunded when you submit your annual tax return. The tax office will send you a cheque usually withing 4-6 weeks IME. Actually very efficient.