Another nice little earner for Thailand in relation to the "money in the bank" extension requirements...

[rawhod]

Not exactly on the Visa/Extension topic, but surely of great interest...

...is the latest development regarding Withholding Tax payments on Bank interest.

 

For the first time in 9+ years in Thailand, at the end of June this year I was charged 15% Withholding Tax on my Bangkok Bank interest payment.

Checked with my branch and they had to check with head office .

 

It appears that the 20,000 Baht tax free interest limit applies to Thai customer accounts but not to Foreign customer accounts.

 

For a person using the 800/400 K Baht in the bank method, this could be in the region of 1,200 Baht in tax per year.

 

Checking in the Banking Forum, it does appear that this tax can be reclaimed/circumvented by having a Thai Tax id. But, like everything here, could be an easy or difficult process depending on the Tax Office and the individual personnel. 

[ubonjoe]

I got charged a few baht of tax on the interest earned for my account I only use for my income and living expenses.

I think it is the same for Thais but they can opt out of the tax reporting.

[Thailand]

Hence 800K for 6 months & 400K forever.

[jacko45k]

22 minutes ago, rawhod said:

Checking in the Banking Forum, it does appear that this tax can be reclaimed/circumvented by having a Thai Tax id. But, like everything here, could be an easy or difficult process depending on the Tax Office and the individual personnel. 

I claimed the tax back for the first time this year. Bit of a palaver.

 

[Brer]

I updated my bank book last week, I have an entry in my book for interest paid however there is no adjustment for 15% withholding tax. Just wondered if it’s already deducted, anybody have any comments on how you notice.

Banking with Kbank.

[wgdanson]

39 minutes ago, rawhod said:

this could be in the region of 1,200 Baht in tax per year

Bht 100 a month! 

[ubonjoe]

27 minutes ago, Brer said:

Just wondered if it’s already deducted, anybody have any comments on how you notice.

Banking with Kbank.

Not Kbank but my Bangkok Bank book shows this for the coding of it.

[rawhod]

24 minutes ago, wgdanson said:

Bht 100 a month! 

...plus 158 baht per month extension fee.

[The Stranger]

Yes, both my kasikorn and multiple SCB accounts have been taxed as in your case. My wife's no.
I asked other several friends and all confirmed this withholding tax for the first time since they opened the account.

Sent from my oppo f9 using Tapatalk

[jacko45k]

2 minutes ago, The Stranger said:

Yes, both my kasikorn and multiple SCB accounts have been taxed as in your case. My wife's no.
I asked other several friends and all confirmed this withholding tax for the first time since they opened the account.

Sent from my oppo f9 using Tapatalk
 

There have been some rule changes recently. No allowance applied to my Bangkok Bank interest anymore, tax lopped straight off. Few years now.

Edited July 25, 2019 by jacko45k

[BertM]

Not new for me. My bank (Citibank Thailand) has been withholding 15% on interest earned since 2016. I opened an account at KBank in Jan 2019 and 15% was withheld when the interest posted in June, so it could be a new rule for just the Thai banks. It really doesn't affect me because I am required to report and pay taxes on any foreign interest to the US gov't thru my US tax return anyway. I do get to claim a credit refund on my US tax return for the 15% tax withholding in Thailand.

Edited July 25, 2019 by BertM

[Brer]

38 minutes ago, ubonjoe said:

Not Kbank but my Bangkok Bank book shows this for the coding of it.

Got the interest definitely no deduction, no idea really on how much interest I should have and not game to go to the bank and ask just in case they realise they need to deduct tax.

let sleeping  dogs lie I think.

[Sparkles]

I've been getting the tax refund,around 1,800 b,  in Chiang Mai for around 8 years and I have always been with the Bangkok Bank.It was a simple exercise getting the tax card,took all off 15 mins at CM City Hall.

 

In January I get the small tax record receipt from my bank and process it at the Amphur Hang Dong office.Refund now comes to the Krung Thai bank previously it was a cheque.

 

Takes about 2 weeks max.

[Dah fahrang]

Likewise, with Kungsri Mee Tae Dai Savings and Kasikorn Savings!

as Mee Tae Dai pays interest monthly, I noticed this at end of May, and again end of June. Kasikorn regular savings pays interest twice yearly, so tax was taken at end of June.

 

This is a new law brought in by Thai Revenue Department from 15 May this year, in response - primarily to Thai customers - holding savings  accounts with multiple banks, each earning 20k per year, but with the Revenue Department previously having no oversight of the accumulative interest payments liable for tax.

So, for a Thai, their bank (by default and by law) now must provide Revenue Department with details of accounts held, interest paid against the customer's Thai ID Card, unless the Thai customer opts out. Then, tax on interest is taken at source. As foreigners do not have Thai ID card, the 'default' is that tax is taken at source, and may be reclaimed at the end of the tax year, or, for the banks to register foreigner held account(s) with the Revenue Department.

 

Last Friday I went to my local Revenue Department Tax Office and got a Tax Identification Number. (13 digits).

This was easy to get. I took originals and copies of my passport, Thai Driving Licence and my wife's Tabien Baan, a (two year old) copy of a residence letter, copy of TM30,  and 15 minutes later, had a tax ID.

I e-mailed Customer Service at both banks alerting them to the fact I lived in the rice fields, so clerks at my branches would not have encountered dealing with this before. Asked them to instruct branches step by step what to do. They replied affirmatively, and both branches contacted me.

Took my Tax ID to both banks, with passport etc. Bank clerk having been told what to do, tapped a few details into my customer database/profile on their computers, made copies of passport which I signed, and as of that date, no more withholding tax will be taken, provided my total interest for all accounts is no more than 20k Baht.

 

As for the tax taken for the last two months, I'm in two minds about claiming back. I suspect a long, drawn out intrusive Filing Process. But, I will check with my Revenue Office to see if this is the case.

[jacko45k]

9 minutes ago, Sparkles said:

Refund now comes to the Krung Thai bank previously it was a cheque.

You said you were with the Bangkok Bank...... 

I had to open an account with Krung Thai.... had to try 3 branches....

[mahjongguy]

30 minutes ago, BertM said:

... I am required to report and pay taxes on any foreign interest to the US gov't thru my US tax return anyway. I do get to claim a credit refund on my US tax return for the 15% tax withholding in Thailand.

Per IRS guidelines if a refund of the withheld money is available then you must do so instead of taking that amount as Foreign Tax Paid on your 1040.

[Sparkles]

6 minutes ago, jacko45k said:

You said you were with the Bangkok Bank...... 

I had to open an account with Krung Thai.... had to try 3 branches....

KrungThai bank have apparently done a deal with the Government. Tax refund is sent to a Krungthai E-Money card.I didn't have an account with them.

 

Went to a local branch in a shopping centre and apparently I was the first to ever ask.Had to wait a couple of days while they got a supply of cards in

Went back 2 days later and they just handed me cash and told me to hang onto the card for next year

 

[jacko45k]

6 minutes ago, Sparkles said:

KrungThai bank have apparently done a deal with the Government. Tax refund is sent to a Krungthai E-Money card.I didn't have an account with them.

 

Went to a local branch in a shopping centre and apparently I was the first to ever ask.Had to wait a couple of days while they got a supply of cards in

Went back 2 days later and they just handed me cash and told me to hang onto the card for next year

 

Things sure sound easier there.

[Sparkles]

3 minutes ago, jacko45k said:

Things sure sound easier there.

KrungThai apparently didn't tell their staff as the teller was initially non plussed and called out to the Manager.

 

She immediately made a call to Bangkok and it was clear she hadn't been briefed either.

Sums up Thailand's banking system but all done with smiles and apologies

 

[MRToMRT]

Theres going to be more new things like this as Thailand has agreed to work towards conformity with the OECD common reporting system (CRS) for tax. 

Ultimately this could mean any of us with over 180 days in country per year will have to submit a tax report as we will be tagged by holding a bank account. Under normal practice of CRS the bank has to report personal data to the tax office and the tax office also has to share that data with your tax domicile country (does not mean you will pay additional tax but everyone would be better off knowing how they fit into a tax regime for any income). I am hoping that Thailand takes its own sweet time with this whole thing, its more bureaucracy I don't need in my life..

 

 

Edited July 25, 2019 by MRToMRT

[Vacuum]

Lol. I got 39.41 baht in interest and they had withdrawn 5.91 baht in tax (Bangkok Bank)

[ubonjoe]

11 minutes ago, MRToMRT said:

Ultimately this could mean any of us with over 180 days in country per year will have to submit a tax report as we will be tagged by holding a bank account.

Not unless you earned more than 150k baht of interest. Or more after taking the allowed deductions.

Under 150k baht it is your choice as to whether you want to file for a refund.

[BertM]

1 hour ago, mahjongguy said:

Per IRS guidelines if a refund of the withheld money is available then you must do so instead of taking that amount as Foreign Tax Paid on your 1040.

Thanks... Can you give me the IRS guideline you are referring to? Because, from what I read on schedule 3, under $600 qualifies as exception. I thought I would qualify for the "de minimis" exception since I only have passive income and its under $600 USD. I didn't claim a credit for tax year 2018 because I had the equivalent of $10 USD withholding in Thailand. I estimate my 2019 withholding will be ~ $15 USD so I won't bother with it either. I will be switching to an extension based on marriage so I won't have to keep as much money in Thailand.

Edited July 25, 2019 by BertM

[mahjongguy]

Getting the refund is not my favorite annual chore. I'd advise just writing it off for any total under 2,000 baht. Maybe 3,000.   ????

[BertM]

1 hour ago, mahjongguy said:

Per IRS guidelines if a refund of the withheld money is available then you must do so instead of taking that amount as Foreign Tax Paid on your 1040.

I think you may be misunderstanding the meaning of nonrefundable credits as defined by the IRS. No where in the IRS guidelines do it state (that I can find) that I am required to file for a refund in Thailand before claiming a credit on my US tax return for the 15% tax withholding. If you can refer me to the specific IRS guideline that states that I must do that, then I will agree with you. Otherwise, I use and trust PwC, one of the largest tax firms in the US to do my taxes.

Thank you...

Edited July 25, 2019 by BertM

[mahjongguy]

It was several years ago that I discovered that bit on the IRS website and I did not bookmark the page.

 

Tonight's googling only led me down a rabbit hole of tax advisor sites that failed to make the important distinction between taxes actually paid (and kept) versus amounts withheld by the payee (e.g. a bank) and forwarded to the foreign government pending a potential request for refund.

 

So, proceed as you have been. Certainly, given the amounts involved, there is little peril.

[BertM]

Just now, mahjongguy said:

It was several years ago that I discovered that bit on the IRS website and I did not bookmark the page.

 

Tonight's googling only led me down a rabbit hole of tax advisor sites that failed to make the important distinction between taxes actually paid (and kept) versus amounts withheld by the payee (e.g. a bank) and forwarded to the foreign government pending a potential request for refund.

 

So, proceed as you have been. Certainly, given the amounts involved, there is little peril.

Thanks... appreciate the kind posts & replies... I just looked at my 2017 return which was prepared by PwC and they reported the interest from Thailand $28 USD and also claimed the credit of $4 on 1040, line 48. In 2018, it was a $10 credit but I didn't claim it. Not enough to worry about... Enjoy your evening... 

[balo]

1 hour ago, Vacuum said:

I got 39.41 baht in interest

Are you sure you can afford to live in Thailand ? ????

[mahjongguy]

I just found this on page 6 of IRS Publication 514.

https://www.irs.gov/pub/irs-pdf/p514.pdf

 

Foreign tax refund.You cannot take a foreign tax credit for income taxes paid to a foreign country if it is reasonably certain the amount would be refunded, credited, rebated, abated, or forgiven if you made a claim.

[dave s]

2 hours ago, Vacuum said:

Lol. I got 39.41 baht in interest and they had withdrawn 5.91 baht in tax (Bangkok Bank)

You can't get your money back unless you have an account at one particular bank. Is this required new account totally free, or is it the typical 200 or 300 baht per year? Is an initial deposit required, of how much? Will an annual fee for the E-money card also be applied? And will this start to ring up transaction fees?

 

Back home, every bank was happy to take your money automatically. But here, an account was needed at only one particular bank, to get your paycheck direct deposited ... which didn't give accounts to foreigners, work permit or not.

Edited July 25, 2019 by dave s