Need Your Opinion

[Jeffrey346]

I am thinking about having my SSA direct deposited to my SCB account here in Thailand.

I am wondering if anyone is currently doing a DD to SCB and if there is any downside?

I have been using TransferWise, but they keep raising fees and discounting conversion rates.

Looks like SCB will charge a max of B500.

[bkk6060]

I think many do it, but I never would.

 

[tonray]

11 minutes ago, bkk6060 said:

I think many do it, but I never would.

 

Why ?

[Jeffrey346]

30 minutes ago, bkk6060 said:

I think many do it, but I never would.

 

Ditto.. Why??

[soalbundy]

Transferwise has raised their fees only once to my knowledge, I still consider them to be my best alternative, fast transfer and good exchange rates, I've never had a problem with them and all my transfers show FTT now that they have 'reason for transfer' as 'requirement for Thailand expenses'

[Jeffrey346]

9 minutes ago, soalbundy said:

Transferwise has raised their fees only once to my knowledge, I still consider them to be my best alternative, fast transfer and good exchange rates, I've never had a problem with them and all my transfers show FTT now that they have 'reason for transfer' as 'requirement for Thailand expenses'

TW increased their fees 3 times last year. In addition, they have always matched the XE conversion rate. They are now below FX. 

I have no issue with TW. If I can transfer direct to a Thai bank at a lower cost seems to make more sense.

Edited January 4, 2020 by Jeffrey346

[saengd]

Technically speaking, any funds that are remitted to Thailand in the year they are earned are subject to Thai income tax, for that reason alone I wouldn't consider a direct deposit system. Whilst there are no plans currently for Thailand to tax that sort of income, the future may well change.

[Jeffrey346]

3 minutes ago, saengd said:

Technically speaking, any funds that are remitted to Thailand in the year they are earned are subject to Thai income tax, for that reason alone I wouldn't consider a direct deposit system. Whilst there are no plans currently for Thailand to tax that sort of income, the future may well change.

Not true. I pay tax in the US and not subject to tax in Thailand based on the US Thai agreement. 

[saengd]

39 minutes ago, Jeffrey346 said:

Not true. I pay tax in the US and not subject to tax in Thailand based on the US Thai agreement. 

As far as general income is concerned it certainly is true under Thai tax law however it is possible that US SSC is exempt, otherwise it might be covered by a double tax agreement between the two countries, you'd need to check. Also, you'd need to be resident in Thailand for more than 183 days per year to be considered tax resident here.

Edited January 4, 2020 by saengd

[noise]

My opinion is based on personal convenience.   Any U.S. govt funds directly deposited into a Thai bank has to go into a special single person account that allows only over the counter withdrawals.   No on line transfers, no ATM withdrawals.  

 

This requirement was impose on any and all Thai banks that want access to the U.S.  banking system.   The U.S. govt/SSA had, in the past, too many cases where the recipient died and friends and relatives never notified the U.S. and just continued to withdraw the money each month from an ATM.   Now the account holder has to show up personally to withdraw the money (proving he/she still alive).    The wife in one of Thai couple I helped get SS benefits had to get her 90% bedridden husband in the car and drive him to the bank so the bank manager could come out and see he is still alive and accept the withdrawal form from him.

 

There is no way I want that restriction so I recommend to anyone with a U.S. bank acount to use that for direct deposits.   The transfer charges for having my bank send the money over here is well worth it to me.   I can get at my money anywhere there is an ATM.

[Suradit69]

5 hours ago, saengd said:

Technically speaking, any funds that are remitted to Thailand in the year they are earned are subject to Thai income tax, for that reason alone I wouldn't consider a direct deposit system. Whilst there are no plans currently for Thailand to tax that sort of income, the future may well change.

In theory SS payments are from money you "earned" and invested during your working life and you're being paid as you would be from an annuity or saved during your working life.

 

i realize this is a somewhat fanciful description of how SS operates, but you are still doing nothing to earn the money at the time it is being paid to you.

 

Depending on how the definition is applied, "earned income" wouldn't include money being paid out of savings. Most US retirees are including SS payments from SS as part of their monthly transfers for living expenses. Doing that via your US bank or by direct deposit doesn't change the source.

 

From the American IRS side there a number of things that don't qualify as earned income including, for example rent or royalties.

 

 

Edited January 4, 2020 by Suradit69

[saengd]

21 minutes ago, Suradit69 said:

In theory SS payments are from money you "earned" and invested during your working life and you're being paid as you would be from an annuity or saved during your working life.

 

i realize this is a somewhat fanciful description of how SS operates, but you are still doing nothing to earn the money at the time it is being paid to you.

 

Depending on how the definition is applied, "earned income" wouldn't include money being paid out of savings. Most US retirees are including SS payments from SS as part of their monthly transfers for living expenses. Doing that via your US bank or by direct deposit doesn't change the source.

 

From the American IRS side there a number of things that don't qualify as earned income including, for example rent or royalties.

 

 

This is not about my definition of what constitutes earned income it's the Thai Revenue definition, their definition of "earned income" translates into the words "received income". 

 

https://msnagroup.com/tax-on-monthly-pension-in-thailand/

[Shouldhaveknownbetter]

I opened up a Bangkok bank account, gave SSA Bangkok bank NY routing and account number, SSA deposits the money in my Bangkok bank account. Been doing it for 5 years, never a problem.

[Pib]

8 hours ago, noise said:

My opinion is based on personal convenience.   Any U.S. govt funds directly deposited into a Thai bank has to go into a special single person account that allows only over the counter withdrawals.   No on line transfers, no ATM withdrawals.  

 

This requirement was impose on any and all Thai banks that want access to the U.S.  banking system.   The U.S. govt/SSA had, in the past, too many cases where the recipient died and friends and relatives never notified the U.S. and just continued to withdraw the money each month from an ATM.   Now the account holder has to show up personally to withdraw the money (proving he/she still alive).    The wife in one of Thai couple I helped get SS benefits had to get her 90% bedridden husband in the car and drive him to the bank so the bank manager could come out and see he is still alive and accept the withdrawal form from him.

 

There is no way I want that restriction so I recommend to anyone with a U.S. bank acount to use that for direct deposits.   The transfer charges for having my bank send the money over here is well worth it to me.   I can get at my money anywhere there is an ATM.

Correct only, repeat, only if your US govt payment/pension like SSA is transferred via the ACH system.  How do you know if its being sent via ACH you may wonder?  Well, the answer to that is if you are using the Bangkok Bank NY branch routing number 026008691 for your US govt payment.   In that case, only one Thai bank can receive such funds and that is Bangkok Bank as they are the only Thai bank with ACH receiving capability.  And Bangkok Bank requires a special direct deposit acct with the restrictions you mentioned for such payments.  Once again, this is if your pension payment is being sent via ACH. 

 

However if the pension is transferred via the International Direct Deposit (IDD) method then a person US govt funds can be deposited into any Thai bank...and into a regular savings acct....zero restrictions....even to Bangkok Bank.   IDD uses the SWIFT system.   

 

Since last year SSA now offers IDD to Thailand also.   I have a family member receiving SSA via IDD to a Bangkok Bank acct--a regular savings acct with debit card, no restrictions.  In fact, the family member was receiving via ACH before, went to Bangkok Bank to have the special direct deposit acct switched to a regular acct vs opening a new acct (Bangkok Bank just needs to remove the "O" restriction to convert a direct deposit acct to a regular acct), submitted the IDD form to Manila, a few months later the SSA payments started arriving via the IDD method.

 

For those thinking of switching to to IDD keep in mind the exchange rate via this method is generally not quite as good as the ACH method.  With the ACH method Bangkok Bank exchanges the incoming dollars to baht using TT Buying Rate along with their associated fees a person actually receives a little more baht into their account for amounts approx $800-1000 and higher after the exchange rate/fee dust settles compared to using the IDD method.  For amounts below $800-1000 the reduced transfer/payment fees ends up in IDD putting a little more baht into your acct than if using ACH.  With the IDD method the US Treasury/their US processor bank exchanges the dollars to baht before sending at a wholesale rate...and pays all fees along the way "except" any receiving bank fee.  Actually that exchange rate appears to be a wholesale rate set by their processor bank which is currently Citibank...and since Citibank can't add in any fees their exchange rate effectively takes that into acct. 

 

With IDD you will not experience the approximate, typical Thai bank 0.25% (Bt200 min, Bt500max) receiving, however, your will experience a Bahtnet receiving fee of Bt100 since the final leg of the IDD SWIFT payment is via Bahtnet.  Bahtnet is primarily a domestic transfer system but does interface with the SWIFT system.  Since the final leg is via Bahtnet you will not receiving International Transfer coding but domestic Bahtnet coding....Thai banks typically use the BTN (or BNT) code to represent a Bahtnet transfer.    Although the final leg is via Bahtnet domestic transfer if you get a Credit Advice for that transfer it "will" show the transfer originated internationally from the US govt paying agency.

 

 

[Shouldhaveknownbetter]

5 minutes ago, Pib said:

Correct only, repeat, only if your US govt payment/pension like SSA is transferred via the ACH system.  How do you know if its being sent via ACH you may wonder?  Well, the answer to that is if you are using the Bangkok Bank NY branch routing number 026008691 for your US govt payment.   In that case, only one Thai bank can receive such funds and that is Bangkok Bank as they are the only Thai bank with ACH receiving capability.  And Bangkok Bank requires a special direct deposit acct with the restrictions you mentioned for such payments.  Once again, this is if your pension payment is being sent via ACH. 

 

However if the pension is transferred via the International Direct Deposit (IDD) method then a person US govt funds can be deposited into any Thai bank...and into a regular savings acct....zero restrictions....even to Bangkok Bank.   IDD uses the SWIFT system.   

 

Since last year SSA now offers IDD to Thailand also.   I have a family member receiving SSA via IDD to a Bangkok Bank acct--a regular savings acct with debit card, no restrictions.  In fact, the family member was receiving via ACH before, went to Bangkok Bank to have the special direct deposit acct switched to a regular acct vs opening a new acct (Bangkok Bank just needs to remove the "O" restriction to convert a direct deposit acct to a regular acct), submitted the IDD form to Manila, a few months later the SSA payments started arriving via the IDD method.

 

For those thinking of switching to to IDD keep in mind the exchange rate via this method is generally not quite as good as the ACH method.  With the ACH method Bangkok Bank exchanges the incoming dollars to baht using TT Buying Rate along with their associated fees a person actually receives a little more baht into their account for amounts approx $800-1000 and higher after the exchange rate/fee dust settles compared to using the IDD method.  For amounts below $800-1000 the reduced transfer/payment fees ends up in IDD putting a little more baht into your acct than if using ACH.  With the IDD method the US Treasury/their US processor bank exchanges the dollars to baht before sending at a wholesale rate...and pays all fees along the way "except" any receiving bank fee.  Actually that exchange rate appears to be a wholesale rate set by their processor bank which is currently Citibank...and since Citibank can't add in any fees their exchange rate effectively takes that into acct. 

 

With IDD you will not experience the approximate, typical Thai bank 0.25% (Bt200 min, Bt500max) receiving, however, your will experience a Bahtnet receiving fee of Bt100 since the final leg of the IDD SWIFT payment is via Bahtnet.  Bahtnet is primarily a domestic transfer system but does interface with the SWIFT system.  Since the final leg is via Bahtnet you will not receiving International Transfer coding but domestic Bahtnet coding....Thai banks typically use the BTN (or BNT) code to represent a Bahtnet transfer.    Although the final leg is via Bahtnet domestic transfer if you get a Credit Advice for that transfer it "will" show the transfer originated internationally from the US govt paying agency.

 

 

 

[Pib]

9 hours ago, saengd said:

As far as general income is concerned it certainly is true under Thai tax law however it is possible that US SSC is exempt, otherwise it might be covered by a double tax agreement between the two countries, you'd need to check. Also, you'd need to be resident in Thailand for more than 183 days per year to be considered tax resident here.

Correct.  Thailand and USA have a Double Tax Agreement (DTA) which prevents double taxation.   See this Thailand Revenue Dept web site and the Thailand-USA DTA for full details

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

http://download.rd.go.th/fileadmin/download/nation/america_e.pdf

 

 

Partial quote from above DTA.   Basically, below is saying only the country "paying" the pension/social security can tax the payment...for SSA, VA, Military Retirement, etc., that would be the U.S.

Quote

 

ARTICLE 20 

Pensions and Social Security Payments 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.

 

 

[Shouldhaveknownbetter]

I have a savings account at Bangkok Bank,  just a regular garden variety one.  SSA transfers the money to that account via ACH, no problems no restrictions.

[Pib]

11 minutes ago, Shouldhaveknownbetter said:

I have a savings account at Bangkok Bank,  just a regular garden variety one.  SSA transfers the money to that account via ACH, no problems no restrictions.

It's "not" a regular savings acct if SSA is using ACH for the payment.  It's a restricted direct deposit acct savings acct.

[Shouldhaveknownbetter]

1 minute ago, Pib said:

It's "not" a regular savings acct if SSA is using ACH for the payment.  It's a restricted direct deposit acct savings acct.

I opened the account long before receiving Social Security payments.  I have a debit card, use ATMs,  transfer money to other accounts, I used it in USA.  No restrictions.

[Shouldhaveknownbetter]

Just want to add, it was a long time ago so I do not know if the rules have changed.  

[Sheryl]

9 hours ago, saengd said:

As far as general income is concerned it certainly is true under Thai tax law however it is possible that US SSC is exempt, otherwise it might be covered by a double tax agreement between the two countries, you'd need to check. Also, you'd need to be resident in Thailand for more than 183 days per year to be considered tax resident here.

 

it is absolutely exempt, specified in the bilateral  tax treaty (exempt from Thai tax that is...depending on overall income level it may well be subject to US tax)

[Pib]

18 minutes ago, Shouldhaveknownbetter said:

I opened the account long before receiving Social Security payments.  I have a debit card, use ATMs,  transfer money to other accounts, I used it in USA.  No restrictions.

You are extremely lucky Bangkok Bank has not caught this yet.  I tried the same thing years ago (approx 10 years ago) with my military retirement...that is, having it sent to my regular Bangkok Bank savings acct.  First payment arrived OK....2nd payment didn't arrive on time...after the payment was about 5 days overdue I was getting ready to contact Bangkok Bank but a letter from them showed up in my mailbox saying US govt payments must be made to a direct deposit acct.  My current payment was on-hold and it would be sent back in two weeks if I did not come in and open a direct deposit acct.  I went it...opened a direct deposit acct....they put the on hold payment into that acct....I provided the new acct number to DFAS/military retirement and the next payment and follow-on payments arrived no problem.  But I later stopped having my payment sent here....but still have the direct deposit acct I use for various other things.

 

Edited January 4, 2020 by Pib

[Pib]

OP,

   See this thread on using IDD.  Mel52 has his VA pension sent to a SCB acct via IDD.  He incurs the Bahtnet Bt100 fee plus what appears to be another transfer fee (see his 4 Jul 2019, post #176)....probably an inter-province transfer fee.

 

ead

[Carltoncw]

Hi... downside is, that I know of, no Thailand Bank has a routing number, except Bangkok Bank... SSA requires a routing number to do a DD. ( believe me, I tried using a SWIFT code in its place, all I got was my DD delayed) There is also no taxation by Thailand of your SSA DD benefit payments.  I have been having my SSA payments DD into Bangkok Bank for 2 years with no problems and not taxation issues.   Bangkok Bank charges 200Baht for the conversion from USD to Baht.   I also use Transferwise to move money from a USA bank account into Bangkok Bank - no problem at all and the fee is always around 1 - 1.5%, which is acceptable to me.

[Max69xl]

11 hours ago, soalbundy said:

Transferwise has raised their fees only once to my knowledge, I still consider them to be my best alternative, fast transfer and good exchange rates, I've never had a problem with them and all my transfers show FTT now that they have 'reason for transfer' as 'requirement for Thailand expenses'

TW offers the so called mid-market rate and have always done it. 

You are supposed to use the reason:

"Funds for long term stay in Thailand". 

[Max69xl]

11 hours ago, Jeffrey346 said:

Ditto.. Why??

SCB will most likely charge you 200 baht as the receiving bank. 500 baht is the maximum amount and that's for a huge sum. 

[Pib]

21 minutes ago, Carltoncw said:

Hi... downside is, that I know of, no Thailand Bank has a routing number, except Bangkok Bank... SSA requires a routing number to do a DD. ( believe me, I tried using a SWIFT code in its place, all I got was my DD delayed)

SSA has been able to do IDD to Thailand which uses SWIFT since mid 2019...I discussed earlier in the this thread and other related threads talking IDD for Thailand.  Review the thread I gave in post #23...just before your post.  

 

If you want to switch to IDD just complete the IDD for Thailand form for "any" Thai bank and get the form to SSA/Manila.  Please note for IDD the payment can only be to a Thai baht acct; it can not be to a foreign currency acct like a USD acct.  Additionally, you must have your foreign/Thailand address onfile with SSA...IDD can not be used if your have your US address onfile.

 

 

 

Edited January 4, 2020 by Pib

[Pib]

As FYI...a report from the SSA website, the number of SSA recipient using IDD for Thailand as of Nov 2019 is 306 folks.  My family member is one of those 306 people. 

 

And I expect the great majority of the 7,150 number under the "DD Payment Through US Banks" represents those folks using the ACH payment method via Bangkok Bank New York branch which is a licensed US bank.  But some of those 7,150 will simply be folks with their Thailand address on file with SSA but having their payment sent to another US bank like USAA, BoA, Chase, Capital One, etc...like me.

 

[Captain 776]

Quote

 

No downside.

Mine has been going to Bangkok Bank for years, never a problem.

 

Social Security and Veterans checks both use the new IAT format on the wire transfers so no problem to accept the deposits.

[Pib]

4 minutes ago, Captain 776 said:

No downside.

Mine has been going to Bangkok Bank for years, never a problem.

 

Social Security and Veterans checks both use the new IAT format on the wire transfers so no problem to accept the deposits.

You have your Thailand address on file with the SSA and VA, right?