Tax on 20,000 interest

[matchar]

My bank (SCB) told me if you earn over 20,000 baht in interest you have to pay 15% tax on the whole amount, not just the amount that's over 20,000.

 

Does anyone know if this is correct?

 

So someone who earns 20,000 exactly pays no tax and someone who earns 20,001 pays 3,000 in tax....seems unfair 🤔.

[topt]

6 minutes ago, matchar said:

My bank (SCB) told me if you earn over 20,000 baht in interest you have to pay 15% tax on the whole amount, not just the amount that's over 20,000.

 

Does anyone know if this is correct?

 

So someone who earns 20,000 exactly pays no tax and someone who earns 20,001 pays 3,000 in tax....seems unfair 🤔.

Unless you have given them a TIN I am surprised they are not taking it already.

Remember it is a withholding tax so depending on your tax position you can try to reclaim........ 

[matchar]

6 minutes ago, topt said:

Unless you have given them a TIN I am surprised they are not taking it already.

Remember it is a withholding tax so depending on your tax position you can try to reclaim........ 

I work in Thailand and pay income tax. I have given them my TIN and previously they haven't deducted any tax until this month.

For November they deducted 100% of my interest as tax and when I called them, they said it's because I have to pay tax on all of the interest I have already received this year.

[Jenkins9039]

22 minutes ago, matchar said:

My bank (SCB) told me if you earn over 20,000 baht in interest you have to pay 15% tax on the whole amount, not just the amount that's over 20,000.

 

Does anyone know if this is correct?

 

So someone who earns 20,000 exactly pays no tax and someone who earns 20,001 pays 3,000 in tax....seems unfair 🤔.

I earn more than that in vouchers from my SCB credit card annually - never been taxed.

[topt]

2 minutes ago, matchar said:

I work in Thailand and pay income tax. I have given them my TIN and previously they haven't deducted any tax until this month.

For November they deducted 100% of my interest as tax and when I called them, they said it's because I have to pay tax on all of the interest I have already received this year.

Presumably because you have gone over the 20k interest level?

Depending on the end of year figure just put it in your tax return - except it may then cost you more than 15%.........

[matchar]

27 minutes ago, topt said:

Presumably because you have gone over the 20k interest level?

Depending on the end of year figure just put it in your tax return - except it may then cost you more than 15%.........

Yes I have gone over it. I just assumed I would only need to pay tax on the excess but apparently not.

[gamb00ler]

@matchar, don't listen to tax advice from a bank teller or even a bank manager.

 

The 20K ฿ figure is actually the amount of interest that is exempt from taxation.  There are several other exemptions/deductions that you may be able to subtract from your income to calculate your taxable income.  I don't have the numbers at hand, but I think that the first 150,000฿ of taxable income is not taxed.  For example if you have only deposit interest as income, the first 170,000฿ would be tax free.

 

Go to the website of a big accounting firm for reliable information on taxation in Thailand.

 

Try Price Waterhouse Coopers here:

https://taxsummaries.pwc.com/thailand/individual/taxes-on-personal-income

 

[gamb00ler]

1 hour ago, matchar said:

For November they deducted 100% of my interest as tax and when I called them, they said it's because I have to pay tax on all of the interest I have already received this year.

That could be their policy, but I don't think that is the correct interpretation of the tax law.

[Seeall]

15 hours ago, matchar said:

I work in Thailand and pay income tax. I have given them my TIN and previously they haven't deducted any tax until this month.

For November they deducted 100% of my interest as tax and when I called them, they said it's because I have to pay tax on all of the interest I have already received this year.

BG answer that is..

[Mike Lister]

14 hours ago, matchar said:

Yes I have gone over it. I just assumed I would only need to pay tax on the excess but apparently not.

Effectively you are paying interest on just the excess, the first 20k was tax free which equals the first 150,000 of income in the tax tables, being zero rated or tax free.

[CMBob]

A bit puzzled by the OP's comments.  I have accounts at both SCB and Bangkok Bank, annually earn less than 20k baht on each account, and they withhold the 15% of interest paid every time interest is paid.  That's the way it's been for years.

(yes, I know I can get the withheld tax back by filing a tax return and have done that before.....but it's not the topic of his post)

[1FinickyOne]

2 minutes ago, CMBob said:

A bit puzzled by the OP's comments.  I have accounts at both SCB and Bangkok Bank, annually earn less than 20k baht on each account, and they withhold the 15% of interest paid every time interest is paid.  That's the way it's been for years.

(yes, I know I can get the withheld tax back by filing a tax return and have done that before.....but it's not the topic of his post)

me too.

[Geir Rasch]

15 hours ago, matchar said:

My bank (SCB) told me if you earn over 20,000 baht in interest you have to pay 15% tax on the whole amount, not just the amount that's over 20,000.

 

Does anyone know if this is correct?

 

So someone who earns 20,000 exactly pays no tax and someone who earns 20,001 pays 3,000 in tax....seems unfair 🤔.

All banks must collect 15% tax on all interest, but interest below 20k is tax free. Then you must go to revenue dept and reclaim collected tax. If you pay tax to Thailand you can make that tax part of your total tax.

[scottiejohn]

2 hours ago, Geir Rasch said:

All banks must collect 15% tax on all interest, but interest below 20k is tax free. Then you must go to revenue dept and reclaim collected tax. If you pay tax to Thailand you can make that tax part of your total tax.

Please provide a source for that statement as BKK Bank disagree with you and take withholding tax on ALL fixed deposit accounts no matter what the amount is.  I have to get  my certificates from the bank every year and claim it back, successfully thank goodness!

[Mike Lister]

3 minutes ago, scottiejohn said:

Please provide a source for that statement as BKK Bank disagree with you and take withholding tax on ALL fixed deposit accounts no matter what the amount is.  I have to get  my certificates from the bank every year and claim it back, successfully thank goodness!

Fixed deposits are managed differently, all banks deduct 15 per cent from all of them. But savings interest is handled differently from bank to bank and customer to customer, depending on whether the customer has given the bank their TIN. Uob doesn't deduct 15 per cent on my first 20k but Bangkok Bank does.

 

[gamb00ler]

3 hours ago, CMBob said:

I have accounts at both SCB and Bangkok Bank, annually earn less than 20k baht on each account, and they withhold the 15% of interest paid every time interest is paid.  That's the way it's been for years.

In the 3rd post the thread author said he gave SCB his TIN.  SCB stopped the withholding from my account when I gave them my TIN.  I have heard reports that SCB is sometimes resistant/incompetent when adding the TIN to accounts to stop tax withholding.  OP and I got lucky to be successful at stopping the withholding.

[gamb00ler]

3 hours ago, Geir Rasch said:

All banks must collect 15% tax on all interest

Maybe I'm lucky but both Kasikorn and SCB stopped withholding on my first attempt when I gave them my TIN.

Edited December 1, 2023 by gamb00ler

[khunPer]

21 hours ago, matchar said:

My bank (SCB) told me if you earn over 20,000 baht in interest you have to pay 15% tax on the whole amount, not just the amount that's over 20,000.

 

Does anyone know if this is correct?

 

So someone who earns 20,000 exactly pays no tax and someone who earns 20,001 pays 3,000 in tax....seems unfair 🤔.

You can adjust it or reclaim by the tax return form.

[matchar]

Some good information here if anyone wants to know more:

https://sherrings.com/bank-savings-deposits-interest-income-tax-reporting-thailand.html

[DrJoy]

9 hours ago, CMBob said:

I have accounts at both SCB and Bangkok Bank, annually earn less than 20k baht on each account, and they withhold the 15% of interest paid every time interest is paid.  That's the way it's been for years.

Nope.

If u provide them (Banks) with your Thai TIN , there is no tax deducted for THB 20,000/- each year

Thats the way its been for years.

[BenStark]

7 minutes ago, DrJoy said:

Nope.

If u provide them (Banks) with your Thai TIN , there is no tax deducted for THB 20,000/- each year

Thats the way its been for years.

 

Works for some, not for others.

 

I have tax ID - yellow book - pink card, name it and i have it.

 

I have accounts with 6 banks.

 

It worked the first year with Krungsri, after that tax got deducted. To be clear, they don't deduct every month, but at the 6th month they do it for the previous 6.

 

The other 5 banks deduct tax as well, be it monthly or every 6 months.

 

That said, when I go to the revenue office, i get withholding tax back on way more than 20k interest

[BenStark]

On 11/30/2023 at 9:13 PM, matchar said:

My bank (SCB) told me if you earn over 20,000 baht in interest you have to pay 15% tax on the whole amount, not just the amount that's over 20,000.

 

The first year I gave Krungsri my tax ID, they withheld only the tax on the interest above 20K.

 

The next year they started to deduct the tax on the first 1 bht of interest received, and it has been like this ever since.

But I think you got the correct answer. If they know you will earn more than 20K interest, they will deduct from the first baht

Edited December 1, 2023 by BenStark

[DrJoy]

14 minutes ago, BenStark said:

Works for some, not for others

Your Thai TIN has to be updated in the Banks software instead of your Passport number

 

Look at  @Pib post from 2019. He has explained it in detail.

 

From @Pib 2019 post -

 

What they recode is a specific data field in your account record called "Tax Pointer" which has the following 5 possible settings for various types of accounts.  I was recoded from 005 to 001.

 

001 = 0 or 15% which means 0% tax withholding on Bt20K or less interest earned/year OR 15% when over Bt20K interest earned/year. 

002 = 0%

003 = 1%

004 = 10%

005 = 15%

Edited December 1, 2023 by DrJoy

[DrJoy]

16 minutes ago, BenStark said:

I have accounts with 6 banks.

I have 3 -

 

Kasikorn

Krungsri

SCB

 

No withholding tax from any of the 3.

[BenStark]

3 minutes ago, DrJoy said:

Your Thai TIN has to be updated in the Banks software instead of your Passport number

 

Like I said, it worked the first year I was with the bank.  The amount I had to reclaim that year was only a few hundred baht.

 

I don't want to know your finances, and are actually not interested in this discussion, because even if they withheld the tax I would have to reclaim the excess every year anyway.

 

So i have only 1 question.

 

Do you have a single bank account on which you for 2 consecutive years received more than 20K interest?

[Mike Lister]

6 hours ago, BenStark said:

 

Works for some, not for others.

 

I have tax ID - yellow book - pink card, name it and i have it.

 

I have accounts with 6 banks.

 

It worked the first year with Krungsri, after that tax got deducted. To be clear, they don't deduct every month, but at the 6th month they do it for the previous 6.

 

The other 5 banks deduct tax as well, be it monthly or every 6 months.

 

That said, when I go to the revenue office, i get withholding tax back on way more than 20k interest

For many years I used to reclaim the tax on bank interest, like you I had several bank accounts plus I brought over a fair amount of money. I got used to the same people at the RD office who were very helpful and obliging when it came to completing a tax return and reclaiming the tax. Then, about three years ago, one of them that I knew well asked me if I wanted declare any other income such as pensions that were deposited directly into Thai banks or transfers that I'd made. This was a significant point in time for me because it led to a discussion, for the very first time, about what I should declare on my tax return. I came to realise that by reclaiming the tax paid on bank interest whilst not declaring other income, I was potentially filing a fraudulent tax return, a point the RD had tried to get across in a very subtle indirect way. The following year I decided not to reclaim the tax on savings income and that it was better to let sleeping dogs lie. Then, the following year, I was with my wife in the RD offices, completing her self employed business return when the issue came up of deductions and allowances she could use and I casually asked if there was some way she could deduct the cost of my health insurance. The response from the RD lady was telling, she said yes, but that might mean that we have to take a closer look at your pensions and the source of your bank transfers....this was about four years ago. Since that date I began to file a complete tax return and I declare everything, fortunately it doesn't cost me very much in tax, some years it doesn't cost anything. Today, my relationship with the people at the RD is very strong and easily back on a solid footing. 

 

[Geir Rasch]

On 12/1/2023 at 3:51 PM, scottiejohn said:

Please provide a source for that statement as BKK Bank disagree with you and take withholding tax on ALL fixed deposit accounts no matter what the amount is.  I have to get  my certificates from the bank every year and claim it back, successfully thank goodness!

What you state is exactly what I wrote: The bank withhold tax on interest and you must claim it back, or use as part of your total tax.

[Geir Rasch]

On 12/1/2023 at 4:55 PM, gamb00ler said:

Maybe I'm lucky but both Kasikorn and SCB stopped withholding on my first attempt when I gave them my TIN.

Well, this was new in 2022 that banks was obliged to collect tax on all interest. You say your bank have stopped doing it. Have Revenue dept changed that order? I dont know.

[JimGant]

Thailand woke up a few years back, when they noted that first world countries, like the US, collected taxes from non resident Thai citizens, who had bank accounts in the States, and who maybe visited the States as tourists (but never long enough to become tax residents). Such taxes were 'withholding at the source', and defined as 'final taxation.' By fiat, 30% -- but reducible via DTA, and the filing of a W8BEN with the withholder, to 15%. Of course, this would be the only way to get taxes from these folks, as they weren't required to file a tax return. Thus, a fiat 30%/15%, regardless of what tax bracket you might be in, should you file a return. Thailand took note, realizing a lot of long term tourists had bank accounts, but weren't considered tax residents due to time spent here. So, every bank account with a farang identifier, gets 15% withheld -- even my joint account with Thai wife. Pretty smart, actually, as how many affected tourists have the time or inclination to get back some measily baht withholding tax..... And for full time farangs, probably most, with no other tax obligations, let it slide, to the benefit of Thai coffers.

[Mike Lister]

6 minutes ago, JimGant said:

Thailand woke up a few years back, when they noted that first world countries, like the US, collected taxes from non resident Thai citizens, who had bank accounts in the States, and who maybe visited the States as tourists (but never long enough to become tax residents). Such taxes were 'withholding at the source', and defined as 'final taxation.' By fiat, 30% -- but reducible via DTA, and the filing of a W8BEN with the withholder, to 15%. Of course, this would be the only way to get taxes from these folks, as they weren't required to file a tax return. Thus, a fiat 30%/15%, regardless of what tax bracket you might be in, should you file a return. Thailand took note, realizing a lot of long term tourists had bank accounts, but weren't considered tax residents due to time spent here. So, every bank account with a farang identifier, gets 15% withheld -- even my joint account with Thai wife. Pretty smart, actually, as how many affected tourists have the time or inclination to get back some measily baht withholding tax..... And for full time farangs, probably most, with no other tax obligations, let it slide, to the benefit of Thai coffers.

First world....hahahah, really, I wonder sometimes!