Thai govt approves tax-law negotiations with US

[webfact]

TAX EVASION
House approves tax-law negotiations with US
The Nation

BANGKOK: -- The government Wednesday won House approval to start negotiations with the United States over an intergovernmental agreement on the US's Foreign Account Tax Compliance Act (FATCA).

The House approved the negotiation framework by a vote of 426 to 20.

The FATCA was enacted in 2010 by Congress to target non-compliance by US taxpayers using foreign accounts

Aimed at tackling tax evasion, the Act requires foreign financial institutions to report to the Internal Revenue Service information about financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest.

The US has so far struck intergovernmental agreements with Denmark, Germany, Ireland, Mexico, Norway, Spain, the United Kingdom and Japan.

Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said the law would be executed only on US taxpayers, and the negotiations followed the conclusion by Thai financial institutions that there should be a government-to-government agreement on the matter.

Parliamentary approval would be sought if Thailand needed to revise any law pursuant to the talks, he added.

Democrat MP Kiat Sittheeamorn raised concerns over legal amendments in the future.

With China had not yet having signed an intergovernmental agreement, Thai officials must be able to explain how Thailand would benefit from this agreement. Alternatively, they should ask if it is possible for the US to strike an agreement with Asean as a whole, he said.

Democrat MP Alongkorn Ponlaboot said that under the FATCA, financial institutions in foreign jurisdictions would work as if they were units under the US Revenue Department.


-- The Nation 2013-11-14

[sscsamui]

Big Brother keeping it's hand in Everyones pocket.. And an eye on all...

[Joe Mamma]

In the hopes of snagging a few evaders, the rest of us suffer. Yet if you sneak in the US have babies and get all the free perks, all tax free too. No problemente.

[veryfarang]

It will cost a lot of money to Thai financial institutions to implement FATCA. Are they really willing to pay for this?

[RickFarang]

Perhaps some won't and will close accounts held by Americans. That's the worst case scenario for those who have nothing to hide: They become "bankless" in their country or residence.

[veryfarang]

Yes some banks around the world have started to do this already. It's crazy. Makes people consider getting another citizenship.

[Jingthing]

I may be wrong, but my initial reaction to this is that it is probably very GOOD news for Americans living in Thailand. Not saying these new regulations are popular (FAR FROM IT! ) but they ARE U.S.A. law, and with strong signs the Thai government is going to fully cooperate, doesn't this suggest that the legitimate fears that many Thai BANKS may dump American customers will now be LESS LIKELY to actually occur?

Edited November 14, 2013 by Jingthing

[Pib]

II expect how this will work is that once a year Thai banks will provide a standardized report to the Bank of Thailand/Finance Ministry/some designated Thai govt office, who in turn will consolidate all these reports into one standardized report and then provide that report to the U.S. govt/IRS....basically a government-to-government report versus every bank in Thailand sending something to the U.S. govt.

Thai banks already code into their system your nationality based on the passport you used to open the account...like for Americans I think (not sure) the code Bangkok Bank uses is AM for American...but I did see them enter such a nationality code about six months ago when I opened another bank account with them. Seems a simple database retrieval keying on the nationality coding to retrieve banking account info on Americans (or any nationality) would be relatively easy.

However, but, if the intergovernmental agreement requires the Thai banks to collect and report info tied to an American's Social Security number then something like that would require Thai banks maybe to modify their databases a little and collect an American's social security number...then again, they probably have miscellaneous, unused fields in their accounts database right now they could use. But things that seem simple/cheap on the surface can actually be very complicated/costly to accomplished...the devil is in the details. Plus you just have the resistance of "why do I have to report data to another country...why must I comply with another country's law?"....of course the answer to that is "money, impact on your business."

And even if a Thai bank don't have any banking operations "physically" in the U.S., it could still impact their business since so many financial/money transactions are somehow tied to using U.S. dollars, interfacing with the U.S. banking network, other agreements between the countries regarding financial matters, foreign/military aid, etc.....no doubt it can get very complicated.

Edited November 14, 2013 by Pib

[hawker9000]

Perhaps some won't and will close accounts held by Americans. That's the worst case scenario for those who have nothing to hide: They become "bankless" in their country or residence.

What would happen to assets already in such accounts? 'Think the more likely case is that new fees on such accounts, or on transactions, will be imposed. Why would thais overlook a new money-making opportunity that they can easily blame on somebody else?

[kamahele]

This is only to find people who are in effect, criminals which is what tax evaders are. If US citizens don't want to pay their share of taxes, they can become citizens of another country and pay taxes there instead of sucking up the benefits of being a US citizen and not paying for it. The poor don't make enough money to pay taxes other than those on their paychecks very normally and the middle class doesn't have enough money to hide overseas so pay their taxes. This law will go after the entitled who don't believe they have to pay their fair share per US law.

[unanimosity]

It will cost a lot of money to Thai financial institutions to implement FATCA. Are they really willing to pay for this?

Are you kidding? They will profit from it, paid for by the U.S. taxpayer.

[Nowhereman60]

The US use our SSN for tax purposes. All the Thai bank has is our and name passport number. Will the US now demand we provide our SSN when opening an account in Thailand?

[jdinasia]

I may be wrong, but my initial reaction to this is that it is probably very GOOD news for Americans living in Thailand. Not saying these new regulations are popular (FAR FROM IT! ) but they ARE U.S.A. law, and with strong signs the Thai government is going to fully cooperate, doesn't this suggest that the legitimate fears that many Thai BANKS may dump American customers will now be LESS LIKELY to actually occur?

NO. There are already banks that are not accepting new accounts from Americans.

It is also the simple fact that Thailand is not responsible for enforcing US law. This law will cost banks more and will create more issues...

[Jingthing]

I may be wrong, but my initial reaction to this is that it is probably very GOOD news for Americans living in Thailand. Not saying these new regulations are popular (FAR FROM IT! ) but they ARE U.S.A. law, and with strong signs the Thai government is going to fully cooperate, doesn't this suggest that the legitimate fears that many Thai BANKS may dump American customers will now be LESS LIKELY to actually occur?

NO. There are already banks that are not accepting new accounts from Americans.

It is also the simple fact that Thailand is not responsible for enforcing US law. This law will cost banks more and will create more issues...

I have read so far only a report here of only ONE Thai bank refusing to open a regular bank account based on American nationality.

There is general knowledge that INVESTMENT accounts are likely to be rejected by Thai banks in general for Americans.

So far, I do not think we've heard even one report of an American having their regular Thai bank account CLOSED due to nationality.

Don't you think it's a bit early to jump to conclusions about how this is actually going to shake out regarding the issue of Americans being able to open and KEEP regular bank accounts in Thailand? I do.

Yes, strong concern about this is well warranted. But who can know the details ... YET?

Edited November 14, 2013 by Jingthing

[Pib]

I may be wrong, but my initial reaction to this is that it is probably very GOOD news for Americans living in Thailand. Not saying these new regulations are popular (FAR FROM IT! ) but they ARE U.S.A. law, and with strong signs the Thai government is going to fully cooperate, doesn't this suggest that the legitimate fears that many Thai BANKS may dump American customers will now be LESS LIKELY to actually occur?

NO. There are already banks that are not accepting new accounts from Americans.

It is also the simple fact that Thailand is not responsible for enforcing US law. This law will cost banks more and will create more issues...

I have read so far only a report here of only ONE Thai bank refusing to open a regular bank account based on American nationality.

There is general knowledge that INVESTMENT accounts are likely to be rejected by Thai banks in general for Americans.

So far, I do not think we've heard even one report of an American having their regular Thai bank account CLOSED due to nationality.

Don't you think it's a bit early to jump to conclusions about how this is actually going to shake out regarding the issue of Americans being able to open and KEEP regular bank accounts in Thailand? I do.

Yes, strong concern about this is well warranted. But who can know the details ... YET?

I've only seen one also, "supposedly" because the person was American....but in that same thread where the American said he was refused because he was American about a week later another American said, BS because he just opened a new account with the same bank days after the other American was supposedly refused. May have simply been refused because he was a farang...no shortage of those posts on ThaiVisa where expats (all nationalities) couldn't open a Thai bank account....but then some walked down the street to another branch of the same bank or a completely different bank and opened an account no problem. TIT

[Jingthing]

Again I might be wrong, but isn't the Thai government's signaling they are accepting this USA law as something they WILL deal with as a government also a signal to Thai banks about continuing to do business with Americans? I realize most of us expats are very small potatoes both to the USA and Thailand but the USA remains a key trading partner for Thailand in general.

Edited November 14, 2013 by Jingthing

[BudRight]

Thai finance law is insane by American standards. I doubt FACTA would provide authority unless strict conditions were met and that would require some very serious changes. Ones that Thais would not understand and even if they did, could not implement correctly.

[TallGuyJohninBKK]

I think Jing's comments above are on the right track... The fact that the Thai government is headed toward exploring a government to government agreement with the U.S. on this does, in all likelihood, lessen the likelihood of future adverse banking issues for Americans in Thailand.

But, this being Thailand, who knows what will come of the current initiative? Will this current government even be in place to sign off on whatever is ultimately negotiated? The Democrats have never been very cordial on these kinds of farang issues. What other things might crop up along the way, China, ASEAN, who knows...

In the meantime, though, it's at least a piece of good news for American expats who want to avoid banking complications here.

And just to be clear here, I'm simply talking in practical terms for the common American expat here. Whether the FATCA legislation is a good thing or necessary or warranted is an entirely different issue that there's not much point in debating here.

[davejones]

In the hopes of snagging a few evaders, the rest of us suffer. Yet if you sneak in the US have babies and get all the free perks, all tax free too. No problemente.

No need to suffer. Give up your US citizenship and you can avoid it all. Don't forget what you get in return for a few inconveniences.

[worgeordie]

America land of the free, not even when you live abroad,the Govt

knows all about you, and has its hand in your pocket.

regards Worgeordie

[Jingthing]

In the hopes of snagging a few evaders, the rest of us suffer. Yet if you sneak in the US have babies and get all the free perks, all tax free too. No problemente.

No need to suffer. Give up your US citizenship and you can avoid it all. Don't forget what you get in return for a few inconveniences.

Many more of us would consider that IF there was a realistic way to gain citizenship in ANOTHER country. Personally, Thailand is out as it is for most U.S. expats here. I could do Israel but I think I'll pass on that.

[Benmart]

Big Brother keeping it's hand in Everyones pocket.. And an eye on all...

In this instacen, We can thank to large scale tax dodgers.

[Jingthing]

Big Brother keeping it's hand in Everyones pocket.. And an eye on all...

In this instacen, We can thank to large scale tax dodgers.

I prefer to blame the U.S. government. They've gone overboard with this. These kinds of policies are making it harder for American expats to survive abroad. It's bad enough that Medicare doesn't apply abroad. Now we're starting to hear stories of major problems people are having with doing SWIFT transfers that they've been doing painlessly for years. Expect more of these stories.

[Benmart]

In the hopes of snagging a few evaders, the rest of us suffer. Yet if you sneak in the US have babies and get all the free perks, all tax free too. No problemente.

Having just emigrated from California, I see your point. However, these are two distinctly different topics.

One day at a time.

[Robert2006]

These types of structures always materialize when a country becomes insolvent, at this point it is a mathematical certainty the US will eventually default, how long can it go on is anyone’s guess.

Historically countries in this position use any method they can impose to generate revenue from their citizens enabling their government to kick the can down the road and delay the inevitable.

The US had a good run but their government mishandled the situation and now backed into a corner it’s going to get ugly for US citizens.

The game is over for the Yanks, they will always be a formidable, intelligent economic force because of their people not their government but their days as the undisputed economic leader of the world are numbered.

[kurtmartens]

The US use our SSN for tax purposes. All the Thai bank has is our and name passport number. Will the US now demand we provide our SSN when opening an account in Thailand?

Which is why when you get a passport, you need to provide your SSN. If not, it generates a report to the IRS that you refused and possibly holds up issuance of the passport. Although I don't believe they can deny the passport of the grounds of refusing to give your SSN ... I don't want to be the test case.

[Ulic]

I may be wrong, but my initial reaction to this is that it is probably very GOOD news for Americans living in Thailand. Not saying these new regulations are popular (FAR FROM IT! ) but they ARE U.S.A. law, and with strong signs the Thai government is going to fully cooperate, doesn't this suggest that the legitimate fears that many Thai BANKS may dump American customers will now be LESS LIKELY to actually occur?

You are possibly correct but I have the opposite view. The Thai government will make deals that cost them nothing. The costs will be born by the

banks. However if the Thai banks have no US customers they have nothing to report. Now there may be a threshold amount, 1 million baht, who

knows. But this law may be philosophically good.(To catch tax evaders) I think it will be a huge pain in the ass for 99.99 percent of Americans

who have nothing to hide, earn less than 50k US a year in pensions or foreign income pay taxes to foreign governments and will face big

penalties for small mistakes in the filing. We shall see.

Edited November 14, 2013 by Ulic

[Echo Tango]

This is only to find people who are in effect, criminals which is what tax evaders are. If US citizens don't want to pay their share of taxes, they can become citizens of another country and pay taxes there instead of sucking up the benefits of being a US citizen and not paying for it. The poor don't make enough money to pay taxes other than those on their paychecks very normally and the middle class doesn't have enough money to hide overseas so pay their taxes. This law will go after the entitled who don't believe they have to pay their fair share per US law.

Hey! Just a moment! What do you mean- "pay their fare share of taxes?" The majority of Americans living in Thailand have "after-tax-money" in their Thai Bank accounts so they're only making modest interest on their deposits, if at all. America is trying to shakedown all of its citizens for more cash and now they're going after their Thai spouses, too. Why should a Thai citizen have to pay a single Baht to the U.S. Government? This has nothing to do with tax dodgers or people "sucking-up-benefits," give me a break! This is pure evil! America is one of the few countries in the world that taxes its citizens on foreign income when they live outside of the country! Look up FBAR and FACTA, it's a cash grab, plain and simple!

[Time Traveller]

You are possibly correct but I have the opposite view. The Thai government will make deals that cost them nothing. The costs will be born by the

banks. However if the Thai banks have no US customers they have nothing to report.

How would a Thai bank know if it has a US tax payer as it's customer?

[Langsuan Man]

Doesn't anyone think that maybe the Thai Government might be interested in this agreement so that they can keep track of money that Thais have in US Banks also

Or is the paranoia so deep no one can think of any other explanation