Its Happening - Law to Tax Overseas Income Now in Progress

[chiang mai]

Just trying to complete a picture here:

1) when does the financial year run from/to for Thai banks for interest calculation purposes, I believed that to be 31 Dec but am now unsure.

2) Thai banks charge 15% tax on deposit accounts where the interest exceeds 20k per year, presumably tax is not deducted from monthly interest payments where the 20k limit has not been exceeded, even though the total amount on deposit is capable of generating annual interest in excess of 20k but has not yet done so?

3) Similar to number 3 above: is tax liability calculated on an account by account basis or on a per customer by bank basis?

4) Re the THB 800K for retirement visa extention: in practice is Immigration OK when that ammount is spread over multiple accounts?

Thanks

[meatboy]

i have just recieved my tax refund for year ending 31st dec.first an account where you draw from weekly for living exs.y dont pay tax.any fixed deposit accounts be it be interest added in steps or fixed for a term you claim, either y claim on the first of jan.for the past year,then any interest y pay after y claim back the next year.regarding the 800k retirement showing why not put it into one fixed yearly acc.you have to go to your bank and get tax paid certificates before y can claim a refund,y will also have to take along a lot of documents and proof of your address and proof of your income,y will get a tax id.no on a card with your name and address,y then send off your claim to bkk.it took just over a week to get the cheque.if y are lucky to get a helpfull tax official like my mrs.had its easy otherwise y will have some pain.

[chiang mai]

i have just recieved my tax refund for year ending 31st dec.first an account where you draw from weekly for living exs.y dont pay tax.any fixed deposit accounts be it be interest added in steps or fixed for a term you claim, either y claim on the first of jan.for the past year,then any interest y pay after y claim back the next year.regarding the 800k retirement showing why not put it into one fixed yearly acc.you have to go to your bank and get tax paid certificates before y can claim a refund,y will also have to take along a lot of documents and proof of your address and proof of your income,y will get a tax id.no on a card with your name and address,y then send off your claim to bkk.it took just over a week to get the cheque.if y are lucky to get a helpfull tax official like my mrs.had its easy otherwise y will have some pain.

Thanks: my visa date is end May so the 800k needs to be banked end Feb - that''s not a big deal for me but I'm in the process of switching bank accounts and in the process, trying to maximise my return on my investments, I also like the idea of spreading my risk and having two or three accounts in Thailand so it's all a bit of a juggling game currently and if I can avoid having to apply for the tax refund that makes life just a little bit easier.

[meatboy]

i have just recieved my tax refund for year ending 31st dec.first an account where you draw from weekly for living exs.y dont pay tax.any fixed deposit accounts be it be interest added in steps or fixed for a term you claim, either y claim on the first of jan.for the past year,then any interest y pay after y claim back the next year.regarding the 800k retirement showing why not put it into one fixed yearly acc.you have to go to your bank and get tax paid certificates before y can claim a refund,y will also have to take along a lot of documents and proof of your address and proof of your income,y will get a tax id.no on a card with your name and address,y then send off your claim to bkk.it took just over a week to get the cheque.if y are lucky to get a helpfull tax official like my mrs.had its easy otherwise y will have some pain.

Thanks: my visa date is end May so the 800k needs to be banked end Feb - that''s not a big deal for me but I'm in the process of switching bank accounts and in the process, trying to maximise my return on my investments, I also like the idea of spreading my risk and having two or three accounts in Thailand so it's all a bit of a juggling game currently and if I can avoid having to apply for the tax refund that makes life just a little bit easier.

if it wasnt for my mrs.i dont think i would bother to claim but she pays tax on savings so she was able to do it for me the same time as her own.

[chiang mai]

bump, anyone?

[chiang mai]

Here's the answers:

1) the tax year is the calendar year.

2) Tax is only deducted from the account once the 20k threshold has been exceeded, regardless of the amount of the initial deposit.

3) and this one IS important: tax is calculated on an an account by acount basis, not on a customer basis by bank. That means that a large sun can be spread across a range of accounts where none exceed the tax threshold of 20K - two banks have openly advised me to do this, I'll bet the tax folk love that one.

[meatboy]

Here's the answers:

1) the tax year is the calendar year.

2) Tax is only deducted from the account once the 20k threshold has been exceeded, regardless of the amount of the initial deposit.

3) and this one IS important: tax is calculated on an an account by acount basis, not on a customer basis by bank. That means that a large sun can be spread across a range of accounts where none exceed the tax threshold of 20K - two banks have openly advised me to do this, I'll bet the tax folk love that one.

800k spread over a no of banks you got to be kidding,thats 40banks oh well that could take you a week,and i dont think immigration would except that.40 bank letters x 100bht per letter not much of a financial wizard are you.

[chiang mai]

Here's the answers:

1) the tax year is the calendar year.

2) Tax is only deducted from the account once the 20k threshold has been exceeded, regardless of the amount of the initial deposit.

3) and this one IS important: tax is calculated on an an account by acount basis, not on a customer basis by bank. That means that a large sun can be spread across a range of accounts where none exceed the tax threshold of 20K - two banks have openly advised me to do this, I'll bet the tax folk love that one.

800k spread over a no of banks you got to be kidding,thats 40banks oh well that could take you a week,and i dont think immigration would except that.40 bank letters x 100bht per letter not much of a financial wizard are you.

You clearly have not understood:

Nobody mentioned spreading 800k across 40 banks, except you, the 20k tax threshold refers to interest paid not principle! My message was:

You can take say five or ten million baht (which is what I meant by a larger sum) and deposit it into a series of accounts at the same bank, as long as each individual account doesn't produce interest of over 20k per year, no tax will be deducted.

Edited February 3, 2012 by chiang mai

[meatboy]

you seem to have lost me i have always had tax deducted on my fixed accounts,3diff.accs.none of which made over 20k.interest the same with the wife's accs.please let us know what banks do not take tax on the interest as i am shortly due for a large sum in the uk.sorry if i misunderstood you.

[chiang mai]

You cannot avoid having the tax deducted at source from fixed rate/term deposits. With regular savings accounts where the 20k tax threshold applies you can avoid that deduction altogether by keeping the interest on any single deposit under 20k and opening additional accounts as needed.

[meatboy]

You cannot avoid having the tax deducted at source from fixed rate/term deposits. With regular savings accounts where the 20k tax threshold applies you can avoid that deduction altogether by keeping the interest on any single deposit under 20k and opening additional accounts as needed.

thanks for that,others told me this now i know which accounts they are i have always had fixed dep.accs.but i get i get the tax back so thanks for clearing that up.

[chiang mai]

You cannot avoid having the tax deducted at source from fixed rate/term deposits. With regular savings accounts where the 20k tax threshold applies you can avoid that deduction altogether by keeping the interest on any single deposit under 20k and opening additional accounts as needed.

thanks for that,others told me this now i know which accounts they are i have always had fixed dep.accs.but i get i get the tax back so thanks for clearing that up.

I suppose another approach might be to put everything you have into a single savings account and watch as the interest is paid (usually monthly) and then switch the account to another account or bank before you reach the 20K limit. The most effective solution though is to do what you're doing presently, you've got the benefit of the higher rate, it's fixed for a defined period, plus, you get your tax back, that's a win win scenario with only a slight inconvenience of having to deal with the tax folks.

[meatboy]

You cannot avoid having the tax deducted at source from fixed rate/term deposits. With regular savings accounts where the 20k tax threshold applies you can avoid that deduction altogether by keeping the interest on any single deposit under 20k and opening additional accounts as needed.

thanks for that,others told me this now i know which accounts they are i have always had fixed dep.accs.but i get i get the tax back so thanks for clearing that up.

I suppose another approach might be to put everything you have into a single savings account and watch as the interest is paid (usually monthly) and then switch the account to another account or bank before you reach the 20K limit. The most effective solution though is to do what you're doing presently, you've got the benefit of the higher rate, it's fixed for a defined period, plus, you get your tax back, that's a win win scenario with only a slight inconvenience of having to deal with the tax folks.

now we are registered we can do it on line that could be fun.

[aurelius]

I suppose another approach might be to put everything you have into a single savings account and watch as the interest is paid (usually monthly) and then switch the account to another account or bank before you reach the 20K limit. The most effective solution though is to do what you're doing presently, you've got the benefit of the higher rate, it's fixed for a defined period, plus, you get your tax back, that's a win win scenario with only a slight inconvenience of having to deal with the tax folks.

Most savings a/c are paying 6-monthly interest, no?

The underlying concept for the different treatment for fixed and saving is that its assumed that only wealthy people have fixed accounts - therefore tax all, and let the energetic folks go claim the deduction.

There is also a little known catch - all though in reality I'm not sure how many banks actually follow the rules, - that says - if you have a standing order between your accounts, e.g. an automated instruction that regularly passes an amount from your saving a/c to your fixed a/c., then the tax will be charged on the saving acct (the source of funds a/c) from the beginning - the 20k allowance doesn't apply.

So the best thing to do to minimize tax and optimize returns is to open a daily trading money market fund and keep any surplus liquidity in there; and keep the minimum balance in your saving a/c.

[chiang mai]

I suppose another approach might be to put everything you have into a single savings account and watch as the interest is paid (usually monthly) and then switch the account to another account or bank before you reach the 20K limit. The most effective solution though is to do what you're doing presently, you've got the benefit of the higher rate, it's fixed for a defined period, plus, you get your tax back, that's a win win scenario with only a slight inconvenience of having to deal with the tax folks.

Most savings a/c are paying 6-monthly interest, no?

The underlying concept for the different treatment for fixed and saving is that its assumed that only wealthy people have fixed accounts - therefore tax all, and let the energetic folks go claim the deduction.

There is also a little known catch - all though in reality I'm not sure how many banks actually follow the rules, - that says - if you have a standing order between your accounts, e.g. an automated instruction that regularly passes an amount from your saving a/c to your fixed a/c., then the tax will be charged on the saving acct (the source of funds a/c) from the beginning - the 20k allowance doesn't apply.

So the best thing to do to minimize tax and optimize returns is to open a daily trading money market fund and keep any surplus liquidity in there; and keep the minimum balance in your saving a/c.

I've got two savings accounts that pay interest montly, Thanachart Bank and BAY - I've also got a KMoney money market account that posts intrest daily and that works well as you've described, I prefer a combination of the two however..

[TallGuyJohninBKK]

CM, thanks for the useful info about how Thai banks handle their taxing of interest earnings...

Re your ideas above, keep in mind that the Thai govt. deposit protection program for bank deposits will fall later this year to 1 million baht per customer per bank.... even if that is spread among different accounts at the same bank.

Re Immigration and the 800,000 baht deposit requirement, I didn't see anyone above clearly answer your original question. I don't know the answer for certain. But I'd say it's pretty likely that keeping the 800,000 in a single account for immigration purposes, with just one bank letter of documentation, is going to be the easiest, cleanest, least trouble-prone way to go.

There are some Immigration offices that have balked at accepting fixed deposit accounts for some odd reason. And there was a report here of a guy getting into trouble because his bank got him to move his funds from one account to a different kind of account during his "seasoning" period, and his local immigration office refused that, saying the funds had to remain in the same account for the required period.

How they'd react to two accounts and bank letters each with 400,000, or the various versions of such an approach, I don't know that I've ever seen tried and reported here.

[patient]

I suppose another approach might be to put everything you have into a single savings account and watch as the interest is paid (usually monthly) and then switch the account to another account or bank before you reach the 20K limit. The most effective solution though is to do what you're doing presently, you've got the benefit of the higher rate, it's fixed for a defined period, plus, you get your tax back, that's a win win scenario with only a slight inconvenience of having to deal with the tax folks.

Most savings a/c are paying 6-monthly interest, no?

The underlying concept for the different treatment for fixed and saving is that its assumed that only wealthy people have fixed accounts - therefore tax all, and let the energetic folks go claim the deduction.

There is also a little known catch - all though in reality I'm not sure how many banks actually follow the rules, - that says - if you have a standing order between your accounts, e.g. an automated instruction that regularly passes an amount from your saving a/c to your fixed a/c., then the tax will be charged on the saving acct (the source of funds a/c) from the beginning - the 20k allowance doesn't apply.

So the best thing to do to minimize tax and optimize returns is to open a daily trading money market fund and keep any surplus liquidity in there; and keep the minimum balance in your saving a/c.

I've got two savings accounts that pay interest montly, Thanachart Bank and BAY - I've also got a KMoney money market account that posts intrest daily and that works well as you've described, I prefer a combination of the two however..

Hi guys

there is some great info here, and i am hoping to tailor it for my personal needs. there are heaps of forums/posts on here on TV but i am struggling to find the relevant one.

i am looking to open an account while travelling around before deciding where to settle down.-north or north east most likely.

Could you recommend a bank that has no fees for cross province atm access, and possibly an attached daily trading money market account mentioned by aurelius to maximise the interest. i will deposit north of 600K Baht to start with and take it from there.

cheers

[chiang mai]

I suppose another approach might be to put everything you have into a single savings account and watch as the interest is paid (usually monthly) and then switch the account to another account or bank before you reach the 20K limit. The most effective solution though is to do what you're doing presently, you've got the benefit of the higher rate, it's fixed for a defined period, plus, you get your tax back, that's a win win scenario with only a slight inconvenience of having to deal with the tax folks.

Most savings a/c are paying 6-monthly interest, no?

The underlying concept for the different treatment for fixed and saving is that its assumed that only wealthy people have fixed accounts - therefore tax all, and let the energetic folks go claim the deduction.

There is also a little known catch - all though in reality I'm not sure how many banks actually follow the rules, - that says - if you have a standing order between your accounts, e.g. an automated instruction that regularly passes an amount from your saving a/c to your fixed a/c., then the tax will be charged on the saving acct (the source of funds a/c) from the beginning - the 20k allowance doesn't apply.

So the best thing to do to minimize tax and optimize returns is to open a daily trading money market fund and keep any surplus liquidity in there; and keep the minimum balance in your saving a/c.

I've got two savings accounts that pay interest montly, Thanachart Bank and BAY - I've also got a KMoney money market account that posts intrest daily and that works well as you've described, I prefer a combination of the two however..

Hi guys

there is some great info here, and i am hoping to tailor it for my personal needs. there are heaps of forums/posts on here on TV but i am struggling to find the relevant one.

i am looking to open an account while travelling around before deciding where to settle down.-north or north east most likely.

Could you recommend a bank that has no fees for cross province atm access, and possibly an attached daily trading money market account mentioned by aurelius to maximise the interest. i will deposit north of 600K Baht to start with and take it from there.

cheers

I'm struggling with the cross province ATM part, that might be tough. Certainly BBL charges, as does Kasikorn, perhaps try asking BAY about this? Maybe take a punt on location and open an account in the location that has the highest probability of you residing longer term, Bangkok, Pattaya, Chiang Mai, Phuket or Issan seem to be the major choices, unless you're really going off the beaten track.

[cmsally]

As far as I'm aware the Thai Military Bank is the only bank that doesn't charge for out of home province ATM.

We don't use ours that often and I don't remember it changing.

See here: (sorry can only find in Thai)

http://www.tmbbank.com/personal/cards/atm-debit-cards/tmb-debit-basic.php

It does say transactions across banks and province free, but then not too specific about home province, so better to double check at bank.

[chiang mai]

As far as I'm aware the Thai Military Bank is the only bank that doesn't charge for out of home province ATM.

We don't use ours that often and I don't remember it changing.

See here: (sorry can only find in Thai)

http://www.tmbbank.c...debit-basic.php

It does say transactions across banks and province free, but then not too specific about home province, so better to double check at bank.

I had my second worst banking experience ever with TMB and this was just trying to open an account, a task that I failed miserably. Which branch of TMB did you open the account with and are some more farang friendly than others? Despite their shortcommings I still need an account there since they do have some good product offerings.

[cmsally]

As far as I'm aware the Thai Military Bank is the only bank that doesn't charge for out of home province ATM.

We don't use ours that often and I don't remember it changing.

See here: (sorry can only find in Thai)

http://www.tmbbank.c...debit-basic.php

It does say transactions across banks and province free, but then not too specific about home province, so better to double check at bank.

I had my second worst banking experience ever with TMB and this was just trying to open an account, a task that I failed miserably. Which branch of TMB did you open the account with and are some more farang friendly than others? Despite their shortcommings I still need an account there since they do have some good product offerings.

I've dealt with Chiang Moi Rd but I don't know how good their English is, but they seem OK. There's another on Changklan Rd and I think one somewhere along the railway station road.

[TallGuyJohninBKK]

Re the question above about avoiding province fees charged by Thai banks, Standard Chartered for several of their regular savings accounts (no huge minimum deposit required) offers both a] fee-free use of all other Thai bank ATMs, and b] free next business day online transfers to your or other people's accounts at other Thai banks (once you link them via SC online banking).

The reason they do that, presumably, is they have a fairly small network of branches, with most in BKK. But I live in BKK, have local access to several of their branches, and recently opened an account with them.

Apart and separate from their general online transfers, their choice of available online bill-pay companies is lacking and missing a lot of the common companies a farang might have bills for like all the True entities, DTAC, etc... But otherwise, so far it's been a decent experience.

One other limitation may be this. Their online transfer service allows you to send money FROM your SC account TO another Thai bank account regardless of location without any fee. But I don't believe, unlike some U.S. online banking, that their system allows you to PULL money INTO your SC account from an account with a different Thai bank.

So for someone residing away from a SC local branch, one issue might be how to make cash deposits INTO that account. You could of course use online banking with another Thai bank (local to where you may be living) to transfer funds into your SC account. But that usually is going to involve a fee, and probably a larger one if it's a province to province transfer.

I asked SC lately if an account holder could use other Thai banks' cash deposit machines to make deposits into your SC account, the same way you can use other Thai banks' ATMs to withdraw cash from your SC account. And I couldn't get any kind of clear answer from them over the phone.

I keep meaning to try my SC ATM card in one of the other bank's cash deposit machines to see what happens. But I haven't done so yet...and am a little afraid the CDM might eat my SC card... But if anyone already knows the answer on this re SC ATM cards and other banks' cash deposit machines, please do chime in.

PS - I was correct above, after just now doublechecking in SC online banking.... It does provide free online transfers TO other Thai bank accounts.... But it does NOT allow you to pull funds INTO your SC from other Thai bank accounts. It's one-way transfers outbound only.

Edited February 17, 2012 by TallGuyJohninBKK

[chiang mai]

The very mention of SC raises my blood pressure to dangerous levels, I don't doubt they are a reasonable bank in Bangkok but in Chiang Mai they are dire, my experience in trying to open an account with them represents my worst banking experience anywhere, ever.

Three separate visits just to open two savings accounts, each was in excess of 90 minutes, copies of my UBC bill, my CAT bill, my apartment lease, my drivers license and every page of my passport, all had to be photocopied, signed and faxed to Bangkok for approval, all of this done twice because there was two new accounts. Before that took place my name had to be cleared through Bangkok to ensure I wasn't on the blacklist, whatever that might be.

Eventually funds were transfered from Bangkok and the account looked as though it might see life but then a THB1,000 charge for recieving the funds via bahtnet (niether BAY, BBL or Kasikorn had made a charge). I queried the charge and two hours later the debate was unresolved so I said I'd had enough and closed my accounts and walked out with THB 1 mill. in a brown paper bag, but not before paying THB 300 for my ATM card, THB 1,000 for the transfer fee AND, THB 400 for closing my account within six months of opening!

I wrote to Lyn Kok, CEO of SC in Bangkok and vented my spleen and will post her response, if I should recieve one.

[TallGuyJohninBKK]

Sorry to raise your ire, CM....

As many of us know here, opening Thai bank accounts for farang can be an extremely frustrating experience at any of the Thai banks, depending on the particular locale and who you happen to get that day for your CSR... And the double/triple photocopying and signing is a standard practice for all the Thai banks in my experience. I go through those hoops every time...

As I posted in the other thread on farangs opening Thai bank accounts, SC gave me the same line as a lot of the other Thai banks at first.... no work permit...no account... But through conversation and the help of my Thai wife in some of the exchanges, we managed to work past that incorrect response by the local bank staff... And ended up opening the account with relatively little fuss.

If anyone else has other options responding to the member above who asked about being able to avoid province to province bank ATM fees, please do chime in here.