Another (tricky) income tax question

[Mike Lister]

A few points:

 

The article from Tillecke and Gibbons is dated 2011, it says that non-resident accounts are managed in a SIMILAR fashion to offshore accounts, it does not say they are offshore accounts.

 

I cannot think of any instance where an onshore bank in any country has ever  offered true offshore accounts, all have branches in offshore locations for that purpose. Why? Because FOREX rules and RD rules do not map neatly on to each other. The BOT sets currency exchange and banking rules whilst the RD sets taxation rules and an offshore account is primarily a tax avoidance vehicle.

 

I suggest that when you opened your Kasikorn foreign currency deposit account, it was probably established as a resident account, which would account for why they now insist on converting your foreign currency into Baht and then converting it back again, before it can be exported. The marketing blurb now says it is for non-residents, as it always has done, but I did not see anywhere on the Kasi. site where it says they will make the conversions you describe, only that they charge a fee in lieu of exchange and a percentage of the amount withdrawn. But in all the history of all the banks in all the world, has anyone ever heard of any offshore account at any bank in any country ever requiring such a conversion, for a genuine offshore account!

 

Eight years ago, the issue of taxation of foreigners was not on the banks radar or even being discussed, so this was never an issue. Indeed, when I opened my Foreign Currency Deposit account with HSBC in Bangkok twenty years ago, I was asked if I wanted a resident or non-resident account, even though I had a long stay visa! The T&G article confirms that was still the case in 2011. Now, the issue of taxation of foreigners has arisen and the banks are having to make new rules, which is why your call to the bank call center got the response of, “we haven’t decided yet”.

 

In summary, the Kasi account is a hybrid rather than a genuine offshore account and since Kasi is governed by BOT rules and your account is with Kasi Thailand, your account is almost certainly an onshore account, ergo, the RD will accept that the funds in that account are in Thailand. As others have pointed out, the account contains capital and not income hence it falls under the old RD rules, until new interest is added, thereafter you will have to see how the banks want to play things.

 

[metisdead]

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[BenStark]

46 minutes ago, Mike Lister said:

I suggest that when you opened your Kasikorn foreign currency deposit account, it was probably established as a resident account, which would account for why they now insist on converting your foreign currency into Baht and then converting it back again, before it can be exported.

 

The account was always non-resident, and the reason they have to convert to Thai baht first is because officially the money is not in Thailand yet.

 

So they can't send something back they haven't received yet.

 

An acquaintance who has probably hundreds of millions in Thai banks called 3 different banks in 2014, that is 1 year before I even deposited the money, about with the question about the procedure of sending money in an FCD back overseas,   and they all told the same/

 

I thought I was on ignore?

 

Edited December 26, 2023 by BenStark

[Mike Lister]

13 minutes ago, BenStark said:

 

The account was always non-resident, and the reason they have to convert to Thai baht first is because officially the money is not in Thailand yet.

 

So they can't send something back they haven't received yet.

 

An acquaintance who has probably hundreds of millions in Thai banks called 3 different banks in 2014, that is 1 year before I even deposited the money, about with the question about the procedure of sending money in an FCD back overseas,   and they all told the same/

 

I thought I was on ignore?

 

Well, if you insist it is all those things, both an offshore account and subject to exchange by Kasi in Thailand, before it can be exported once again, that means the funds will have been imported to Thailand, in order for the exchange to be made, ergo they will be remitted funds and taxable, by virtue of the currency exchange.

 

I felt sorry for you, you opened an account that both offshore but onshore but you don't know which, and you don't understand how it functions, plus you put a bunch of money into in, in Thailand no less.  :))

[BenStark]

3 minutes ago, Mike Lister said:

I felt sorry for you, you opened an account that both offshore but onshore but you don't know which, and you don't understand how it functions, plus you put a bunch of money into in, in Thailand no less.  :))

 

I know very well what account I opened, as I informed me beforehand.

 

The rule for Thai banks is pretty straight forward.

 

Resident account for Thai nationals or residence permit holders, and non-resident for others.

 

I didn't send it here with the intention to send it back, it were certain circumstances that made me decide to send back.

 

You are very good at one thing, which is post one thing, then contradict yourself and try to talk around it, but I wouldn't expect anything else from someone who was a janitor at a bank and now want to project himself as a financial expert.

 

Can you please keep your promise and add me to your ignore list, and never look at my posts again?

[Mike Lister]

17 minutes ago, BenStark said:

 

I know very well what account I opened, as I informed me beforehand.

 

The rule for Thai banks is pretty straight forward.

 

Resident account for Thai nationals or residence permit holders, and non-resident for others.

 

I didn't send it here with the intention to send it back, it were certain circumstances that made me decide to send back.

 

You are very good at one thing, which is post one thing, then contradict yourself and try to talk around it, but I wouldn't expect anything else from someone who was a janitor at a bank and now want to project himself as a financial expert.

 

Can you please keep your promise and add me to your ignore list, and never look at my posts again?

I don't really care about your particular situation or you but I am curious to understand the solution and the answers. But you seem only interested in giving out insufficient or late information and then arguing and being offensive, rather than finding the answer. Anyway, I think you have your answer, Kasi is going to import those funds for you whether you like it or not, albeit only briefly, but long enough. G'night

[tandor]

On 12/26/2023 at 9:24 AM, BenStark said:

For years do I have a significant amount in US$ in an FCD with Kbank.

 

Since it is in an FCD, I think technically it isn't remitted to a Thai bank account yet.

 

If I exchange it to Thai baht and deposit it in my bank account after the new year, will I pay income tax on it?

Best call the Thai Revenoue Office, I'm sure they will oblige. 

[thrilled]

In another note if you are a U.S. citizen and have over $10,000 in a Thai bank you need to report it to the IRS or be fined because of FATCA. Supposedly works with the U.as. Government. If not notifying the IRS you can get a huge fine. 

[Phulublub]

On 12/26/2023 at 10:57 AM, BenStark said:

Resident and non-resident bank accounts differ mainly in respect of remitting funds out of Thailand. This is because a resident bank account is considered an account within Thailand, while a non-resident bank account is treated in a manner similar to an offshore account.

So, if we all have non-resident bank accoutns, and if the funda are not "really" in Thailand, we will never have remitted any money TO Thailand and will have zero problems with any income taxes that may or may not be about to be enforced.

 

PH

[Guavaman]

Every time that I transfer from my Bangkok Bank US$ FCD account to my Baht account, it shows the code FTT, which identifies it as a foreign transfer of funds.

 

The good news is that your bank records provide evidence that you owned/received the funds in your FCD account prior to 1 January 2024; thus, even if it is deemed that you remit the funds when you withdraw from the FCD, the funds should be tax-exempt under new Order 162.

 

Baker Mackenzie:

https://insightplus.bakermckenzie.com/bm/tax/thailand-offshore-sourced-income-received-before-1-january-2024-can-be-brought-into-thailand-in-2024-or-later-without-being-subject-to-thai-personal-income-tax/

 

According to the Revenue Departmental Order No. Por. 162/2566 re: Income Taxation under section 41, paragraph two, of the Revenue Code, dated 20 November 2023 ("Order No. 162"), offshore-sourced income received by Thai tax resident individuals before 2024 can be brought into Thailand in any subsequent year without being subject to Thai personal income tax. 

 

Edited December 28, 2023 by Rimmer
Incorrect quote removed

[Mike Lister]

34 minutes ago, Phulublub said:

So, if we all have non-resident bank accoutns, and if the funda are not "really" in Thailand, we will never have remitted any money TO Thailand and will have zero problems with any income taxes that may or may not be about to be enforced.

 

PH

Make no mistake, those funds are in Thailand, they are not offshore.

 

I am told, but I cannot see for my self, where it says that the bank will make two currency exchanges, from foreign currency into Baht and then from Baht back into foreign currency, whenever funds from the account are remitted overseas again.  IF that is the case, the currency exchange takes place in Thailand hence at that point, they have been remitted. There is a big difference between a non-resident account and an offshore account, the account in question is not an offshore account, it has some operating similarities, that is all. From a RD perspective, those funds are inside Thailand, regardless of whether they are in foreign currency or anything else.

[BenStark]

1 hour ago, Phulublub said:

So, if we all have non-resident bank accoutns, and if the funda are not "really" in Thailand, we will never have remitted any money TO Thailand and will have zero problems with any income taxes that may or may not be about to be enforced.

 

PH

 

You know the difference between a foreign currency account, which is the subject of this thread, and a deposit or savings account?

 

Obviously not

[BenStark]

1 hour ago, Guavaman said:

Every time that I transfer from my Bangkok Bank US$ FCD account to my Baht account, it shows the code FTT, which identifies it as a foreign transfer of funds.

 

Thanks for that, which I think it is solid prove that the money in the FCD is not in Thailand, until you transfer it to your deposit account

[CharlieH]

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