Thai govt approves tax-law negotiations with US

[Jingthing]

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?

Because they demand our PASSPORTS as ID's as we are FOREIGNERS here.

[veryfarang]

 

Well, a US Taxpayer might not be a US Citizen. For example someone might pay Taxes on asset or business owned in the US but be of different Nationality.

 

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?

Because they demand our PASSPORTS as ID's as we are FOREIGNERS here.

Edited November 16, 2013 by veryfarang

[partington]

 

Well, a US Taxpayer might not be a US Citizen. For example someone might pay Taxes on asset or business owned in the US but be of different Nationality.

 

FATCA regulations ONLY apply to US citizens and long term residents of the US (green card holders). Unless one of those criteria applies the people you mention are NOT subject to any of the FATCA regulations, so it does not matter.

The Thai banks have no obligation to report them and they have no obligation to report themselves.

However a green card holder who opens a bank account in Thailand using his own country's (ie a non-US) passport will not be detected by the Thai banks as being subject to FATCA (even though he or she is, and by US law must report any foreign bank accounts).

[a99az]

Big brother has his eyes on your money and wants his cut.

[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?

Because they demand our PASSPORTS as ID's as we are FOREIGNERS here.

Green card holders and Thais with US citizenship could open bank accounts without the Thai bank suspecting any obligation to pay US taxes.

[Jingthing]

That is true but doesn't change their US government obligations.

Sent from my GT-S5360B using Thaivisa Connect Thailand mobile app

[movsrus]

Thailand won't benefit from imposition of FACTA at all. It is designed to go after expats who keep money in accounts outside the US and avoid paying taxes. I wonder if the banks in Thailand will soon begin to impose a fee to US depositors to offset the costs associated with FACTA compliance.

FACTA is just another example of the US government trying to impose itself into the affairs of other countries and using the threat of heavy fines for foreign financial institutions if they don't agree.

Here is an interesting story about some Americans who have had enough and are renouncing their citizenship rather than deal with the insanity to comes out of Washington, DC.

http://www.cnbc.com/id/101202754

[TallGuyJohninBKK]

Thailand won't benefit from imposition of FACTA at all. It is designed to go after expats who keep money in accounts outside the US and avoid paying taxes. I wonder if the banks in Thailand will soon begin to impose a fee to US depositors to offset the costs associated with FACTA compliance.

FACTA is just another example of the US government trying to impose itself into the affairs of other countries and using the threat of heavy fines for foreign financial institutions if they don't agree.

No... it's an example of the U.S. government going after people, American expats and U.S. residents, who keep money in accounts outside the US and avoid paying taxes.

The penalties against non-complying financial institutions, obviously, is the leverage aimed at getting compliance from some countries whose banking systems for years offered essentially secret, tax-free account havens for Americans.

I'm an American expat, and I have to pay taxes on my income per the IRS rules. I have no problem with the U.S. government working to close tax loopholes in foreign countries that enabled other Americans to avoid paying their fair share.

Whether FATCA was the best or right remedy to the problem, I don't know. But I clearly understand and support the intention.

Now, how about the U.S. government also doing something about the billions and billions of dollars in revenues that U.S.-based corporations keep overseas to avoid corporate taxation?

Edited November 17, 2013 by TallGuyJohninBKK

[Arkady]

Thai brokers have started sending out new KYC forms with questions about whether clients are US citizens (including dual citizens) or residents. I assume that the wrong answers to these questions will result in the accounts being shut down to save the brokers trouble. Many Swiss banks have already cleaned out accounts connected to US residents and won't accept new ones with US citizens as beneficiaries, even if they live overseas.

[Arkady]

 

Well, a US Taxpayer might not be a US Citizen. For example someone might pay Taxes on asset or business owned in the US but be of different Nationality.

 

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?

Because they demand our PASSPORTS as ID's as we are FOREIGNERS here.

Dual citizens who don't present their US passport on opening accounts and green card holders are more of an issue for the overseas financial institutions They are now starting to cover these in "Know your client" questionnaires.

[veryfarang]

The U.S. is the world’s only industrialized nation that taxes citizens who live overseas, even if their income is generated in a foreign country. Some think it's normal because it is the "LAW", as if god wrote it in the tablets. Other thinks it's government racketeering, legalised extortion. Which ever way you lean, you are bound to be hated by the other camp.

Let's say you a born abroad from US parents, you have American citizenship, though you never studied, visited, worked or made money from the US, you are still indebted tax wise. Uncle Sam claims you owe him. Normal or legal racketeering?

As a reminder it was the " LAW" in America to discriminate based on race gender and religious belief, until they made it the "LAW" not to discriminate. Alabama was the last state to overturn the "LAW" banning interracial marriage in 2000! Yes you read right 2000!

The "LAW" is made by the one in power to serve the one in power. Nothing else.

[Jingthing]

There are many laws (in any country really) that we don't like and many that are indeed ethically and morally questionable. However, I don't see the point of debating that aspect of these laws here. I think the PRACTICALITIES on how they actually effect Americans abroad is massively more relevant. Especially considering that expats have pretty much no political influence back in the so called homeland.

[veryfarang]

Ethic and moral and not separate from practicality. I fact the more practical option is often the more moral option, and vice versa.

American expat = taxation without representation! Morally and practically bad.

[Jingthing]

Point made. You think it's bad.

[hawker9000]

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?

I don't know about you, but I had to show MY passport, I know because I saw it that they made a copy of it, and the number was recorded on one of the account application forms. They definitely know I'm a US citizen.

[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?

I don't know about you, but I had to show MY passport, I know because I saw it that they made a copy of it, and the number was recorded on one of the account application forms. They definitely know I'm a US citizen.

I also had to show a passport to open account. But it's not an American passport, and the bank would have no idea that I have to file US taxes. Also the Thai banks of many Thai/American dual nationals would not be aware of their customers obligations either. So my question was how would any Thai bank know if they have a customer liable for US taxes. The answer is they would not know.

[partington]

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?

I don't know about you, but I had to show MY passport, I know because I saw it that they made a copy of it, and the number was recorded on one of the account application forms. They definitely know I'm a US citizen.

I also had to show a passport to open account. But it's not an American passport, and the bank would have no idea that I have to file US taxes. Also the Thai banks of many Thai/American dual nationals would not be aware of their customers obligations either. So my question was how would any Thai bank know if they have a customer liable for US taxes. The answer is they would not know.

It has already been reported that banks are asking new customers to fill in forms which ask are you a "US person?".

So unless you are willing to commit written fraud by denying it, this is how they will know.

[Time Traveller]

It has already been reported that banks are asking new customers to fill in forms which ask are you a "US person?".

So unless you are willing to commit written fraud by denying it, this is how they will know.

Again this doesn't apply to existing accounts.

[partington]

It has already been reported that banks are asking new customers to fill in forms which ask are you a "US person?".

So unless you are willing to commit written fraud by denying it, this is how they will know.

Again this doesn't apply to existing accounts.

Clearly this is true, but you yourself were specifically discussing opening new accounts :

Green card holders and Thais with US citizenship could open bank accounts without the Thai bank suspecting any obligation to pay US taxes.

[hawker9000]

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?

I don't know about you, but I had to show MY passport, I know because I saw it that they made a copy of it, and the number was recorded on one of the account application forms. They definitely know I'm a US citizen.

I also had to show a passport to open account. But it's not an American passport, and the bank would have no idea that I have to file US taxes. Also the Thai banks of many Thai/American dual nationals would not be aware of their customers obligations either. So my question was how would any Thai bank know if they have a customer liable for US taxes. The answer is they would not know.

You're missing the point. The thai bank merely documents you (as a US passport holder and now an account owner) to the appropriate US agency. The IRS is more than capable of taking it from there. Whether you're actually a "taxpayer" or not need not be of any concern to the thai bank involved. Edited November 19, 2013 by hawker9000

[Time Traveller]

You're missing the point. The thai bank merely documents you (as a US passport holder and now an account owner) to the appropriate US agency. The IRS is more than capable of taking it from there. Whether you're actually a "taxpayer" or not need not be of any concern to the thai bank involved.

Are you saying thai banks will hand over info on every account holder to the US, or do you not understand the points mentioned above?

If a Thai citizen has an account already opened with a Thai bank, how does that bank know it must hand over the information about that account holder who unknown to the Thai bank is also a US citizen or Green card holder and hence must file US taxes?

The answer is the bank does not know. A Thai bank would only know if a person either informed them, or they presented an American passport to open the account.

[hawker9000]

You're missing the point. The thai bank merely documents you (as a US passport holder and now an account owner) to the appropriate US agency. The IRS is more than capable of taking it from there. Whether you're actually a "taxpayer" or not need not be of any concern to the thai bank involved.

Are you saying thai banks will hand over info on every account holder to the US, or do you not understand the points mentioned above?

If a Thai citizen has an account already opened with a Thai bank, how does that bank know it must hand over the information about that account holder who unknown to the Thai bank is also a US citizen or Green card holder and hence must file US taxes?

The answer is the bank does not know. A Thai bank would only know if a person either informed them, or they presented an American passport to open the account.

No, not EVERY account holder. Duh. Are you deliberately misreading what I'm saying? I'm saying that IF you open an account using a US - that's U, as in "United", and S, as in "States" - passport as your identity document, then yes, the thai bank will essentially "inform on you" to the US authority, not knowing or caring whether you actually happen to have been paying any taxes to the US or not. Why are you finding this so hard to understand? Yes, there might be a very few who hold US passports and pay no tax for one reason or another, but the US will make the case - successfully based on current practice with other countries - that being a US passport holder is sufficient cause for your account information being "shared" with the US taxing authority. I suspect all this is just a matter of time.

[kbelyeu]

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 ( alt=bah.gif width=19 height=19> FAR FROM IT! alt=bah.gif width=19 height=19> ) 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?

Funny you say this.. I just received a notice from HSBC Jersey stating that they were closing my accounts in January 2014 due to the lack of presence of HSBC in Thailand. I'm on the hustle now trying to find another EXPAT bank account.. all thanks to the US government. Happy days.

Kurt

[Pib]

Funny you say this.. I just received a notice from HSBC Jersey stating that they were closing my accounts in January 2014 due to the lack of presence of HSBC in Thailand. I'm on the hustle now trying to find another EXPAT bank account.. all thanks to the US government. Happy days.

Kurt

Got nothing to do with U.S. govt....HSBC has been closing its presence in several countries such as Thailand....see this ThaiVisa thread from early 2012. Link. Also see this Feb 12 news article Link talking HSBC closing its presence in Thailand, South Korea, and Japan.

Sounds like you are just receiving an account closure notice because maybe having an Thailand address on file with HSBC? Similar to other notices people sometimes get from their home country bank when the bank determines the account holder does not have a residence address in the home country? Try blaming something else.

[Jingthing]

HSBC isn't exactly a THAI bank.

Again, let's see what happens.

If we start hearing SCB and Bangkok Bank won't open regular bank accounts for Americans and/or starts closing them, then we can start to freak out.

[NeverSure]

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

Hmmm....

The US Pays me me approx. US$2,500 in social security every month no matter where in the world I live. It also gives me cost of living increases. How many countries will do that? Yes, I get more than some because it's based on how much one paid in, but there it is.

The US subsidizes my Medicare so that I have very good complete health insurance for a pittance. Yes, I have to get back to US soil to use it, but many serious illnesses aren't an emergency and the trip would be well worth it. (ie cancer) I spend more than 1/2 of each year in the US anyway.

All of my income is derived from the US, and the IRS gets a 1099 form reporting it anyway, so reporting that some is transferred to Thailand doesn't change the taxes I pay.

Tax rates are low in the US. The median tax rate for those who pay taxes in the US is 20% of the gross adjusted income. Even wealthy people have tax shelters and at about $100,000 income pass the point where they have to pay FICA taxes which saves them about 12 -14% in taxes, leveling the field with those who make $100,000 or less. Yes, I know the tax tables show higher rates than that for top earners, but only an idiot pays it. Tax planning and avoidance is legal. Only tax evasion is illegal.

Someone from Germany told me he'd have to pay about 50% of his income in taxes there IIRC, and that's impossible in the US.

About my US passport, citizenship and 100% right to be there, own land, and move about freely, you can take that when I die.

[JimGant]

being a US passport holder is sufficient cause for your account information being "shared" with the US taxing authority.

Don't forget that just being identified as a "US person" doesn't mean the bank has to report your particulars under FATCA. IF your bank account (or aggregate of accounts in the same bank) is not over $50,000 on Dec 31st, no reporting necessary. (Or, if you open an account during the year with more than $50k, or close one with over $50k during the year.) Doesn't sound like a lot of programming work for the bank -- just a snapshot of US person accounts on just one day of the year (vice monitoring these accounts 365 days per year to see if they exceed $50k).

So, for most bank accounts in Thailand owned by US persons, no reporting will be done due to the $50k criteria. And for those accounts exceeding $50k -- maybe by considerable amounts -- the cost/benefit analysis of having to report them probably would give the nod to keeping them in force.

For dual US/Thai citizens who currently have bank accounts in Thailand, it's doubtful they'll raise the US person flag, assuming the account was opened with a Thai passport/ID, Thai address, phone number, etc. (a US address and/or phone number on file is part of the so-called "US person indicia" that would require further investigation by the bank).

For new accounts, as post #40 discusses, the Know Your Customer (KYC) criteria will be used to 'interrogate' new customers, and dual US/Thai citizens who answer honestly will be identified as US persons (or, if they want to lie, 99% won't set off any alarms requiring further investigation). But, again, they'll need $50k plus in their account(s) to trigger any reporting, be they honest or otherwise.

And so what? The reporting will be akin to a 1099, showing any and all earnings on these accounts. And assuming this amount is less than $20k -- or when combined with other US 1099's, the amount is less than $20k -- you're not required to file a tax form (tax year 2013, filing jointly).

Anyway, most Yanks, dual or otherwise, will be under the radar. And for those who aren't, I'm happy to know you'll now be paying your taxes, or else..

For Thai banks, I can't see anything overwhelming. Besides, most of any new screening criteria will also be required for ASEAN Economic Community participation beginning in 2015.

[hawker9000]

@JG - yes, a good description of the status quo. However, that's not what this thread is about. If you'll check the topic title and OP, you'll see the discussion is forward-looking and concerned with some upcoming negotiations which will, presumably, entail some new or changed reporting practices by thai banks. As of now, I agree with you that most Americans are under the radar due to the limited funds actually on deposit here. (But even American account holders with as little as 1 satang in their accounts have a block to check on their annual income tax returns.)

[JimGant]

@JG - yes, a good description of the status quo. However, that's not what this thread is about. If you'll check the topic title and OP, you'll see the discussion is forward-looking and concerned with some upcoming negotiations which will, presumably, entail some new or changed reporting practices by thai banks. As of now, I agree with you that most Americans are under the radar due to the limited funds actually on deposit here. (But even American account holders with as little as 1 satang in their accounts have a block to check on their annual income tax returns.)

Nothing status quo about what I described. The $50k threshold is when FATCA arrives, not today. The search of data elements for existing accounts is in the future -- as well as new KYC questionaires for new accounts. And most Americans, pre and post FATCA, will remain under the radar screen. Just a 'forward look' as to what we might expect under FATCA.

That the Thais and US are discussing an IGA, as the thread title indicates, is a useful point of departure for discussion on 'will this mitigate somewhat the impact on US account holders.' Probably 'yes,' if tamping down bankers' angst is considered (as was seen with the Singaporean IGA). But IGA or not, banks will still have to try and identify US account holders -- and report to either their gov't, or to the US IRS, certain activity, including income, on accounts exceeding $50k. This tar baby, like Obamacare, ain't going away. And we're bound to experience some collateral damage -- like having to move to a larger, or different, bank. But an IGA would probably be helpful.

But even American account holders with as little as 1 satang in their accounts have a block to check on their annual income tax returns.

Sounds like you're getting FATCA and FBAR confused. Yes, for several years now, one had to file a 1040 Schedule B if he had any foreign bank accounts. And then had to check the block that asked "Are you required to file a FBAR?" But if one had no line item for foreign income, there was no FATCA like 1099 data trail to trip you up. Under FATCA, you'd best have a line item on your Schedule B -- if you're 'reportable' by your foreign bank.

[partington]

being a US passport holder is sufficient cause for your account information being "shared" with the US taxing authority.

Don't forget that just being identified as a "US person" doesn't mean the bank has to report your particulars under FATCA. IF your bank account (or aggregate of accounts in the same bank) is not over $50,000 on Dec 31st, no reporting necessary. (Or, if you open an account during the year with more than $50k, or close one with over $50k during the year.)

So, for most bank accounts in Thailand owned by US persons, no reporting will be done due to the $50k criteria. And for those accounts exceeding $50k -- maybe by considerable amounts -- the cost/benefit analysis of having to report them probably would give the nod to keeping them in force.

Anyway, most Yanks, dual or otherwise, will be under the radar. And for those who aren't, I'm happy to know you'll now be paying your taxes, or else..

While I too am glad that most Yanks will continue to have to pay taxes that citizens of no other country on earth have to pay, that is on money accrued outside the US while they are no longer living in the US, I think you are wrong about the reporting obligations of foreign banks.

As a US person your personal obligation to report under FATCA only arises when your foreign bank accounts aggregate to $50,000 or above. However the foreign banks reporting obligation applies to all US persons irrespective of the amount of money in their accounts.

If you consider this, of course it makes sense. If I have $60,000 in 7 separate bank accounts in Thailand I am obliged to report it. But the IRS would only know that I had $60,000 if all the banks that I had accounts in reported my accounts, even if each one is well below $50,000.

So foreign banks under the IGA must report any account of any amount held by any US person, otherwise evasion would be merely a matter of ensuring you never have a single account that exceeded $50,000. Even the IRS would anticipate that one.