Thailand Live Saturday 12 October 2024

[arfamo73]

I have money in a Savings Bank account which has been deposited for 11 months. When the account matures some 15% will be deducted from the total amount. I have been told by friends that as I have no income arising within Thailand and consequently do not pay tax that I will be able to obtain a letter from the bank detailing the account and if this is presented to the Revenue Department, I will be able to reclaim the the deducted tax. The bank have already told me that the tax will amount to some 20K Thai Baht.

Can anyone advise me if the information re the refund is correct and has anyone actually done this?

Many thanks

[chiang mai]

It'll be a first if it's true which I believe it isn't, sorry.

[soundman]

I do believe the tax deductible will be calculated on interest earned only, not the principal ( or total ).

Moved to business/banking forum.

[aurelius]

Correct. You need to get a tax id from the revenue dept and you will be able to claim this tax back.

[chiang mai]

Correct. You need to get a tax id from the revenue dept and you will be able to claim this tax back.

Interesting, do you know this to be first hand fact and do you know what the requirements are to get a tax ID, is this for residents/nationals only? I would have thought that perhaps the banks might have been able to administer such things, if the requirement is to have no tax arising in Thailand then retirement visa holders automatically qualify hence why deduct tax in the first place.

EDIT to include the following:

I found this post in an older thread, maybe of some use to the OP if the rules haven't changed:

This happens in Chiang Mai. The service from your local tax office might be better (or worse):

1. Reclaim of total tax already paid on a Thai Bank account (Fixed accounts only) can be applied for during Jan-March for the previous year. Applications which are submitted after 31 March are subject to some sort of financial deduction.

2. A maximum of 3 back years can be applied for.

3. On request, the applicant's local bank will issue a certified form of tax paid anytime after 1 Jan, for the previous year.

4. This form is taken to the Tax Office (very helpful they are there), with passport and a tax card (I think a tax card is still required but not sure - easily obtainable though), and another form has to be filled in (they'll happily do it for you).

5. After processing, you are given a chit, and a cheque for the full amount of reclaimed tax will then be sent to you by post after about a fortnight (used to be after about 2 months but the procedure has speeded up in recent years).

6. After the first year's application, the applicant will be sent annually a form for the purpose of applying for tax reclaim; this form is sent by post and arrives sometime early January.

7. There tends to be a mass of people going to the tax office for this purpose around the middle of January. From my experience over about 15 years, it's best to delay the application until the middle of February or so.

8. All this assumes that the applicant is living in Thailand issued with a non-immigrant O visa, and usually with an annual extension on the basis of retirement, marriage or a work permit.

The entire thread is here and it's well worth reading since the story changes a few times as conditions are imposed:

Edited September 26, 2011 by chiang mai

[aurelius]

I believe that this rule applies more broadly than just retirees - in fact to anyone who doesn't earn income, or who earns just a very small income. If your income is taxed at a rate of 15% or above then it is not in your interest to declare this income (and you are not required to declare this income), as it would result in you paying additional tax (i.e. the interest revenue earned would be subject to tax at your highest marginal tax rate). However if your Thai income is taxed at a rate lower than 15%, or have no income, (and you are a thai tax resident), then it is in your interest to file and claim.

To claim back tax of approx 20,000, the scenario would be as follows:

Deposited amount 3,500,000

Interest earned at 3.75% 131,250

Tax paid 19,688

[chiang mai]

I'll be very interested to hear from any farang who has been able to get a refund of tax on savings, being suspicious by nature I'm guessing this might be one of those deals similar to farangs getting Thai nationality, there's an available route but only one or two people actually make it to the end.

[aurelius]

I would have thought that perhaps the banks might have been able to administer such things, if the requirement is to have no tax arising in Thailand then retirement visa holders automatically qualify hence why deduct tax in the first place.

It's not the bank's role to determine who should be taxed at what rate. The tax law requires to that the income be deducted at source, after that it's up to individuals to make their claims for rebates. This approach also captures tax revenue from people who choose not to give a tax ID to the bank.

Additionally, there is a ceiling on the amount of tax that can be claimed under this category (20k max if I recall correctly). Bank's don't know what other banks have paid to any one customer so it is impossible for them to administer a ceiling; it has to be centralised.

[chiang mai]

Bump - so has anyone actually managed to obtain this type of tax refund?

[JimGant]

When the account matures some 15% will be deducted from the total amount.

As soundman said, 15% withholding will be on the interest, not the principal.

Are you a Yank? If so, the Thai interest is required to be included on your US tax filing. And you'll get all your Thai taxes back, by filing a Form 1116 and claiming a foreign tax credit. So, unless the taxes you owe the US are less than the Thai taxes paid, forget visiting the Thai tax revenuers for a refund.

If a Brit, the link provided above by Chiang Mai has some Brit tax credit advice.

[endure]

I'll be very interested to hear from any farang who has been able to get a refund of tax on savings, being suspicious by nature I'm guessing this might be one of those deals similar to farangs getting Thai nationality, there's an available route but only one or two people actually make it to the end.

If you read my post in the thread mentioned in post 5 of this thread it's a direct quote from an email from a friend of mine describing what's necessary to get your rebate. He lives in Chiang Mai and has been reclaiming tax paid on his savings for 10 years to my knowledge.