New Rules - Withholding Tax on Interest - Tax ID

[TerraplaneGuy]

This year the government started ordering banks to withhold 15% tax on interest paid to individual account holders (including expats).  But we can stop that if we give our bank a copy of our Tax ID card (assuming we've got one - I do.)  My understanding is that the tax exemption for our first B20,000 of interest remains in effect.   In past years, I have not filed a Thai tax return because my only local income is bank interest and it is below that B20,000 threshhold. 

 

Question: Does anyone know whether, if I give my bank my Tax ID so they stop withholding tax on my interest, I will be required to file a tax return even if my total income remains below the taxable threshhold?  I would assume not but I'm wary of this new requirement.

[jacko45k]

Not answering your questions but jumping aboard.

Banglamung would not give ma a tax ID card , saying they did not issue them any more, simply giving me the number.

Some years ago (not this year), my bank started taking 15% off all my interest, I only decided in Jan 2019 to try and recover it, prior to that thinking 'don't prod a sleeping dog'.

 

As to your question, I believe different banks have different approaches to this, they may still take off the tax. The only way to recover it would be to submit a tax return.

 

I wonder if registering my tax ID at Bangkok Bank would serve any purpose, I would like to avoid the tiresome situations I was put through last year. I would have got nowhere except for the assistance of one very helpful lady at the revenue dept. I still clocked up a few hundred Km though.

 

 

 

[saengd]

Giving the bank your tax ID number serves no purpose, the bank doesn't care whether you have a tax ID or not and file a tax return or not, they are in a different business entirely. Banks act as agents of the BOT and the Revenue Service, they take the steps they are asked to take and nothing more. The Revenue rules state that if you pay tax below the personal allowance threshold that money can be returned to you, when you file a tax return, a simple enough process in Thailand.

[TerraplaneGuy]

58 minutes ago, saengd said:

Giving the bank your tax ID number serves no purpose, the bank doesn't care whether you have a tax ID or not and file a tax return or not, they are in a different business entirely. Banks act as agents of the BOT and the Revenue Service, they take the steps they are asked to take and nothing more. The Revenue rules state that if you pay tax below the personal allowance threshold that money can be returned to you, when you file a tax return, a simple enough process in Thailand.

The Tax Notification 346 of May 3, 2019 states that banks are now required to withhold 15% tax on interest unless the account holder submits his Tax ID to the bank.  This is a new development and I am not making it  up.  My bank (Krungsri) told me this.  I was surprised to see they had started withholding tax on my interest and after inquiring they said it was because of the new law but if I give them my Tax ID they will stop withholding tax.  This new rule is explained on this site: https://sherrings.com/interest-income-personal-tax-thailand.html

 

As OP I would appreciate it if posters would please stick to the original question and make sure they are aware of this year's changes to the law before answering.  

[saengd]

17 minutes ago, TerraplaneGuy said:

The Tax Notification 346 of May 3, 2019 states that banks are now required to withhold 15% tax on interest unless the account holder submits his Tax ID to the bank.  This is a new development and I am not making it  up.  My bank (Krungsri) told me this.  I was surprised to see they had started withholding tax on my interest and after inquiring they said it was because of the new law but if I give them my Tax ID they will stop withholding tax.  This new rule is explained on this site: https://sherrings.com/interest-income-personal-tax-thailand.html

 

As OP I would appreciate it if posters would please stick to the original question and make sure they are aware of this year's changes to the law before answering.  

Splitting accounts was always known to be a low level tax fraud loop hole that would be closed one day, it was rarely used by anyone who filed a tax return because there was little point... it is just as easy to file a return and get the tax back legally as it is to split accounts and break the law! 

 

The purpose of supplying the bank with your tax ID is so Revenue can ensure split accounts don't aggregate above the tax free threshold. If you don't pay tax on your interest AND you have no other income that is taxable, you are not required to file a tax return.  Those things said my previous answer stands, the banks are not in the tax business, your declaration to the bank that includes your tax ID number is a matter of trust between you and the Revenue, the bank is merely the messenger in that conversation.

[JimGant]

9 hours ago, TerraplaneGuy said:

Does anyone know whether, if I give my bank my Tax ID so they stop withholding tax on my interest, I will be required to file a tax return even if my total income remains below the taxable threshhold? 

Not required to file a tax return.

[Pib]

Just because you have Thai tax ID does not mean you "must" file a tax return year each.   It just means you may have a need to file a return or did have a need to file for one or more years like to reclaim tax withheld on a bank acct.   

 

I got my tax ID a half dozen or so years ago when I needed to file for refund of tax withheld on some fixed accts I had for a couple of years.  I have not filed since...no need  to as I don't have any taxable income in Thailand..  

 

Below post provides instructions on how to stop the tax withholding for a Krungsri bank acct with info on why interest is being withheld.   And for any other bank it's the same....provide them your tax ID number.  I stopped the tax withholding on my Krungsri and Bangkok Bank accts by providing them my Thai tax ID.

 

 

[Rawairat]

As a side issue some western countries, Australia for one are starting to ask for a foreign tax ID if you are claiming non resident tax status there. So I have asked for a tax ID at the revenue office in Phuket but they stayed the banks have to do something, have not chased it up since. 

[toolpush]

I recently ran into the same problem with Krungsri Bank. They told me that if I gave them a tax ID number, they would stop withholding the tax. Where does a person acquire a Thai tax ID?

[Pib]

25 minutes ago, toolpush said:

I recently ran into the same problem with Krungsri Bank. They told me that if I gave them a tax ID number, they would stop withholding the tax. Where does a person acquire a Thai tax ID?

At their local tax revenue office....the office where you would file a tax return.

[rwill]

On 10/15/2019 at 7:35 PM, TerraplaneGuy said:

My understanding is that the tax exemption for our first B20,000 of interest remains in effect. 

For Thai account holders they do not withhold tax until over the 20K baht exemption.  But for farang account holders they withhold the tax from everything.  It would then be up to the farang to claim it back by filing Thai taxes.  I assume a large percent of farang won't bother with it and that the government thinks that too, which is why they do it.

Edited October 18, 2019 by rwill

[saengd]

1 hour ago, toolpush said:

I recently ran into the same problem with Krungsri Bank. They told me that if I gave them a tax ID number, they would stop withholding the tax. Where does a person acquire a Thai tax ID?

Oddly enough, at the local tax office.

[Beggar]

It is my experience at several banks. Yes now they charge taxes on interest even if you have not reached the 20000 Baht. To avoid this you need to tell the banks your tax ID (show them the paper that you got from the Revenue Department). After I did they stopped to charge taxes. 

 

Edited October 18, 2019 by Beggar

[YT3k72Em]

For Thais, their Tax ID number is their ID card number, so the banks already have it, and report it to the tax department. For farangs the banks normally only have your passport number so are unable to report it to the tax department, thus are required to withhold tax.  So it's up to you to give them your tax ID information now.

[TerraplaneGuy]

15 hours ago, Pib said:

Just because you have Thai tax ID does not mean you "must" file a tax return year each.   It just means you may have a need to file a return or did have a need to file for one or more years like to reclaim tax withheld on a bank acct.   

 

I got my tax ID a half dozen or so years ago when I needed to file for refund of tax withheld on some fixed accts I had for a couple of years.  I have not filed since...no need  to as I don't have any taxable income in Thailand..  

 

Below post provides instructions on how to stop the tax withholding for a Krungsri bank acct with info on why interest is being withheld.   And for any other bank it's the same....provide them your tax ID number.  I stopped the tax withholding on my Krungsri and Bangkok Bank accts by providing them my Thai tax ID.

 

 

I looked at that related thread and saw some people said that to stop the withholding tax you need to give Krungsri not only your Tax ID but also a tax return filing receipt, apparently as confirmation that the ID was valid.  Did they insist on that with you?  I have a Tax ID but never filed a return (nothing to declare or refund) so have no receipts.  But I want them to stop withholding tax on my interest.  

[TigerandDog]

On 10/16/2019 at 4:02 PM, TerraplaneGuy said:

The Tax Notification 346 of May 3, 2019 states that banks are now required to withhold 15% tax on interest unless the account holder submits his Tax ID to the bank.  This is a new development and I am not making it  up.  My bank (Krungsri) told me this.  I was surprised to see they had started withholding tax on my interest and after inquiring they said it was because of the new law but if I give them my Tax ID they will stop withholding tax.  This new rule is explained on this site: https://sherrings.com/interest-income-personal-tax-thailand.html

 

As OP I would appreciate it if posters would please stick to the original question and make sure they are aware of this year's changes to the law before answering.  

The problem with this tax notification is that banks are NOT strictly adhering to it. Tax is only supposed to be deducted on interest of 20k baht or more for Thais and foreigners. However, when I received my 1/2 yearly interest of 6k baht tax had been deducted. Went and spoke with my bank manager about it and he entered both my tax # and pink ID card # into their systems. He stated that I should not have had any tax deducted, so I will have to lodge a tax return in January after obtaining a letter from the bank in December itemising how much interest was paid for the year and the amount of tax deducted. It is then a fairly simple process of going to your local Revenue Office and submitting a tax return. In the past I have received 100% of the tax deducted as a refund, so I expect the same to be the case this time.

[TerraplaneGuy]

9 minutes ago, TigerandDog said:

The problem with this tax notification is that banks are NOT strictly adhering to it. Tax is only supposed to be deducted on interest of 20k baht or more for Thais and foreigners. ...

According to what Krungsri told me recently and the explanation by Sherrings in the link I posted above, the new rule is that tax is withheld on ALL interest, not just if it exceeds B20K.  The reason being that some people were splitting their money into multiple accounts to avoid the appearance of exceeding the B20K threshhold.  If in fact your total across all accounts is less than B20K, you can get back the withheld tax by filing a return (for refund).  OR you can stop the withholding in the first place by giving the bank your Tax ID which they report to Revenue.  My question (posted above) is whether you also have to give the bank a tax return receipt, as some report, in which case those of us who have not filed returns have a problem.

[Beggar]

44 minutes ago, TerraplaneGuy said:

I looked at that related thread and saw some people said that to stop the withholding tax you need to give Krungsri not only your Tax ID but also a tax return filing receipt, apparently as confirmation that the ID was valid.  Did they insist on that with you?  I have a Tax ID but never filed a return (nothing to declare or refund) so have no receipts.  But I want them to stop withholding tax on my interest.  

I had to show them the piece of paper with the tax ID that the Revenue Department gave me. Telling them the number alone didn't work. 

[TerraplaneGuy]

1 minute ago, Beggar said:

I had to show them the piece of paper with the tax ID that the Revenue Department gave me. Telling them the number alone didn't work. 

That I have and can show them (I call it a Tax ID card).  But that's different from a tax return receipt.  So Krungsri didn't ask you for the latter?

[Rod the Sod]

For what it is worth, and I have covered this in some detail before, there are some advantages to the hassle of completing a tax return every year - even if you do not have to pay tax.

 

Firstly you do get the 15% back on your investment interest.

 

Secondly, you can get a Letter of Tax Residency that allows you, where there are agreements in place, to get refunds on Withholding Taxes paid on dividends around the world.

 

In my case it is a no-brainer and for an hour of inconvenience it is well worth it.

 

Cheers RtS

[Beggar]

1 hour ago, TerraplaneGuy said:

That I have and can show them (I call it a Tax ID card).  But that's different from a tax return receipt.  So Krungsri didn't ask you for the latter?

The bank only asked for this what you call tax ID card. Before they had real cards. Now they only give you this paper. Just care that you don't leave it at the bank. 

[nahkit]

On 10/16/2019 at 7:00 PM, JimGant said:

On 10/16/2019 at 9:35 AM, TerraplaneGuy said:

Does anyone know whether, if I give my bank my Tax ID so they stop withholding tax on my interest, I will be required to file a tax return even if my total income remains below the taxable threshhold? 

Not required to file a tax return.

When I obtained my tax id earlier this year I was fined 500 baht for not filing a return the previous year The only income I have is from bank interest and share dividends, well below the 20,000 threshold. When I asked if I needed to file in the future or a face a fine, even if I closed my accounts and had zero income, I was told that they would not "chase" me.

[TerraplaneGuy]

19 minutes ago, nahkit said:

When I obtained my tax id earlier this year I was fined 500 baht for not filing a return the previous year The only income I have is from bank interest and share dividends, well below the 20,000 threshold. When I asked if I needed to file in the future or a face a fine, even if I closed my accounts and had zero income, I was told that they would not "chase" me.

On what basis did they fine you? What reason did they give for saying you should have filed a return if in fact you had no taxable income?  Also please tell us what tax district you are in.  

[khunPer]

On 10/16/2019 at 4:35 AM, TerraplaneGuy said:

Does anyone know whether, if I give my bank my Tax ID so they stop withholding tax on my interest, I will be required to file a tax return even if my total income remains below the taxable threshhold?  I would assume not but I'm wary of this new requirement.

To my knowledge, you need to file for a return for interest tax at the local revenue department.

 

15 percent Interest withholding tax on high interest accounts is not new, and it's not paid into a specified tax-holder's account. You might need to show proof – bank book – of the withheld tax. I'm not sure if you need to be registered as income tax payer to claim interest withholding tax back, others have before posted about claiming interest tax paid back without mentioning Tax ID-number registration.

 

Earlier we aliens where also withheld 1 percent withholding tax on normal bank account, but that has been void for foreigners since some years ago.

 

The new withholding tax thing is 10 percent on dividends from mutual funds, the so-called "Fund Books", including the earlier tax-exempt LTFs.

 

If you have a Yellow House Book, and thereby a Thai ID number, then that number is your TIN (Tax Identification Number); but you still need to register for income tax.

 

I was trying to register within the last month – however for another reason than Thai interest tax – it's very difficult if one don't have a work income; I'm here on retirement-extension of stay. They wouldn't register me, including talking to "someone important" by telephone call to Bangkok. I went back another day and showed my pink ID-card, and a print of that I has sold a few Thai SET-shares with a profit, and then a local "someone important" office manager herself kindly registered me, and I got a tax-ID sticker, which is the official proof for income tax registration.

 

Within the last month an article in the news section of Thaivisa said that 12 million are registered as income tax payers – out of a population of more than 65 million – and only 4 million pays income tax. No wonder, they won't even register us...????

[VBF]

This thread from earlier in the year might be of interest....pun intended ????

 

 

[nahkit]

2 hours ago, TerraplaneGuy said:

On what basis did they fine you? What reason did they give for saying you should have filed a return if in fact you had no taxable income?  Also please tell us what tax district you are in.  

Said that I was late filing hence the fine. They also said they could have fined me up to 2,000 baht but they were being nice.

Pointed out that if I actually did file they would owe me money on the stock dividend tax withheld and just got a smile back.

Not too hard to work out where I was filing my taxes if you look at my avatar.

[nahkit]

2 hours ago, khunPer said:

was trying to register within the last month – however for another reason than Thai interest tax – it's very difficult if one don't have a work income; I'm here on retirement-extension of stay. They wouldn't register me

Same experience as I had, they relented when I showed them I had a Thai Stock account and was receiving dividend payments with tax withheld.

[saengd]

2 hours ago, nahkit said:

When I obtained my tax id earlier this year I was fined 500 baht for not filing a return the previous year The only income I have is from bank interest and share dividends, well below the 20,000 threshold. When I asked if I needed to file in the future or a face a fine, even if I closed my accounts and had zero income, I was told that they would not "chase" me.

I think you were conned, I can't see that there's any penalty for not filing a tax return although there is a surcharge, if that's what you intended.

https://sherrings.com/tax-penalties-surcharge-thailand.html

 

[TerraplaneGuy]

46 minutes ago, nahkit said:

Said that I was late filing hence the fine. They also said they could have fined me up to 2,000 baht but they were being nice.

Pointed out that if I actually did file they would owe me money on the stock dividend tax withheld and just got a smile back.

Not too hard to work out where I was filing my taxes if you look at my avatar.

Maybe I’m missing something but how could you be late filing if you owed no tax?  Surely filing merely to get a refund is not an obligation and not something the failure to do would make one liable for a fine.  Was this just a shake-down for “tea money”? 

Edited October 18, 2019 by TerraplaneGuy
Addition

[topt]

2 hours ago, TerraplaneGuy said:

Maybe I’m missing something but how could you be late filing if you owed no tax?  Surely filing merely to get a refund is not an obligation and not something the failure to do would make one liable for a fine.  Was this just a shake-down for “tea money”? 

Don't know but when I originally applied some years ago I had to pay 100 baht and it has been mentioned in several threads more recently that others have paid 100/200 when making a new application for a TIN.