FATCA Compliance Update - Thailand will be compliant

[maxman71]

To all you Yanks out there with bank accounts in Thailand or any other foreign country for that matter. July 1, 2014 was the deadline for countries to either be compliant with the US FATCA law or face 30% withholding penalties that a non-compliant bank would face on any financial transaction with the US financial system.

The IRS now publishes a list of countries and Foreign Financial Institutions within those countries that are in compliance and not subject to the 30% withholding penalty.

http://www.treasury.gov/resource-center/tax-policy/treaties/pages/fatca-archive.aspx

http://www.irs.gov/Businesses/Corporations/FATCA-Current-Alerts-and-Other-News

http://www.irs.gov/Businesses/Corporations/FATCA-Foreign-Financial-Institution-List-Search-and-Download-Tool

http://apps.irs.gov/app/fatcaFfiList/flu.jsf

By using the various links, dropdowns and lists from the links above, you can see if your bank is a registered FFI (Foreign Financial Institution) with the IRS. Thailand is one of the jurisdictions that have reached agreements in substance with the IRS.

The deadline for filing FBAR's was June 30, 2014 for calendar year 2013.

Various threads on TV have discussed this development going back a few years, and now the time has arrived and Thai banks have apparently agreed to report US Citizen and US Green Card holders' Thai bank account info to the IRS. This reported info includes balances, withdrawals and deposits in the subject accounts.

The takeaway here is if you are required to file FBAR's and possibly other forms to the IRS as a result of your bank account(s), ownership in a Thai Company, etc., and you haven't been doing so, you are seriously running the risk of getting caught. And the penalties for failing to report as required and for failing to pay US taxes on income earned overseas, are quite severe.

[AyG]

For people's convenience I've attached a complete list of compliant institutions in Thailand.

FFIListPartial.pdf

[ricklev]

Thanks!

[Pib]

Sure glad I'm been an honest little boy with Uncle Sam in including interest earned (even one stang) from my Thai bank accounts on my federal tax return (I don't file state tax) and submitting my FBAR each year also. With whatever reporting actually ends up being done by the FATCA process from Thailand to the U.S Treasury/IRS that data will correlate with my federal return and FBAR. I won't be looking over my shoulder for Uncle Sam.

But from looking at the U.S. Treasury FATCA web site and some of the model intergovernmental agreements it appears at a minimum these things will be reported: Person's name, Tax Identification Number (i.e., would probably be your social security number), account number, and account balance at the end of the year. And I thought I found one spot where it said report interest earned also but I can't find that again when looking this morning.

I expect at some point Thai banks will have Americans provide some additional info on current and new accounts, like their social security number, in order to comply with the reporting to the U.S. Treasury.

I spent some time yesterday looking at some of the IGA templates and their attachments and discovered although 1 Jul 14 was the kick-off date so to speak, there are other dates a couple years down the road that apply for certain reporting under certain conditions...it's kinda hurt my head in trying to understand the various dates. But with the U.S. wanting end of year data maybe it won't be until later this year Thai banks possibly ask Americans for more info...maybe have us fill out another form...but I'm guessing.

So, I'll just kickback and see what happens....as an American with four bank accounts with Bangkok Bank (#4 opened Dec 13) they have not contacted me for any info at all as of today 3 Jul 14....they just continue to accept my deposits, transfers, payments, etc.

[pmarlin]

Unless you have $50,000 or equivalent in Thai Baht in the Bank I don't believe it is even reported. At least that is what I have read.

[Pib]

Unless you have $50,000 or equivalent in Thai Baht in the Bank I don't believe it is even reported. At least that is what I have read.

That's my understanding also...and actually I think it may be $50K "at the end of the year" or if it reaches $75K any time during the year.

If true, say a person had $75K in the bank for a few days due to transfer a large amount to buy something in Thailand but the money was used to buy whatever and at the end of the year your account was at $10K. Thai banks would still have to report that to the IRS since it reached $75K during the year although it was below $50K at the end of the year. But don't quote me on this as I'm pretty sure I stumbled across that on the FATCA site a few days ago...will need to look again to see if I can find it again or maybe I was just have a Chang beer hallucination.

Edit: or maybe I'm confusing it with the FATCA federal tax Form 8938 filing requirement for folks living in the U.S. with foreign financial accounts...below is a quote for the IRS website which takes $50K and $75K. But something in my gut is telling me I also saw it in the reporting requirement under FATCA for foreign banks. I'll look some more later on.

Taxpayers living in the United States. You must file Form 8938 if you must file an income tax return and:

• You are unmarried and the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year
• You are married filing a joint income tax return and the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year.
• You are married filing separate income tax returns and the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. For purposes of calculating the value of your specified foreign financial assets in applying this threshold, include one-half the value of any specified foreign financial asset jointly owned with your spouse. However, report the entire value on Form 8938 if you are required to file Form 8938.

Edited July 3, 2014 by Pib

[Naam]

Unless you have $50,000 or equivalent in Thai Baht in the Bank I don't believe it is even reported. At least that is what I have read.

that's a wrong assumption. i am not a US citizen but was for some years a "US person" liable to pay US income tax. my European bank issued a single form 1999 for even the smallest amount of dividend or interest received. original was sent to the IRS, a copy to me.

i am talking of a time more than ten years ago when the big foreign multinational banks were scrambling to be approved as "Qualified Intermediary".

[pmarlin]

Unless you have $50,000 or equivalent in Thai Baht in the Bank I don't believe it is even reported. At least that is what I have read.

that's a wrong assumption. i am not a US citizen but was for some years a "US person" liable to pay US income tax. my European bank issued a single form 1999 for even the smallest amount of dividend or interest received. original was sent to the IRS, a copy to me.

i am talking of a time more than ten years ago when the big foreign multinational banks were scrambling to be approved as "Qualified Intermediary".

The subject is about FATCA for foreign banks. Don't know what you are replying to. Paying income tax is a different matter.

[maxman71]

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Unless you have $50,000 or equivalent in Thai Baht in the Bank I don't believe it is even reported. At least that is what I have read.

that's a wrong assumption. i am not a US citizen but was for some years a "US person" liable to pay US income tax. my European bank issued a single form 1999 for even the smallest amount of dividend or interest received. original was sent to the IRS, a copy to me.

i am talking of a time more than ten years ago when the big foreign multinational banks were scrambling to be approved as "Qualified Intermediary".

The USD 50K reporting threshold is for Form 8938. The reporting threshold for the FBAR is USD 10K. If the aggregate of all your overseas accounts meet or exceed USD 10K for as little as ONE DAY in a calendar year, you are required to file the FBAR.

[maxman71]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Unless you have $50,000 or equivalent in Thai Baht in the Bank I don't believe it is even reported. At least that is what I have read.

That's my understanding also...and actually I think it may be $50K "at the end of the year" or if it reaches $75K any time during the year.

If true, say a person had $75K in the bank for a few days due to transfer a large amount to buy something in Thailand but the money was used to buy whatever and at the end of the year your account was at $10K. Thai banks would still have to report that to the IRS since it reached $75K during the year although it was below $50K at the end of the year. But don't quote me on this as I'm pretty sure I stumbled across that on the FATCA site a few days ago...will need to look again to see if I can find it again or maybe I was just have a Chang beer hallucination.

Edit: or maybe I'm confusing it with the FATCA federal tax Form 8938 filing requirement for folks living in the U.S. with foreign financial accounts...below is a quote for the IRS website which takes $50K and $75K. But something in my gut is telling me I also saw it in the reporting requirement under FATCA for foreign banks. I'll look some more later on.

Taxpayers living in the United States. You must file Form 8938 if you must file an income tax return and:

• You are unmarried and the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year
• You are married filing a joint income tax return and the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year.
• You are married filing separate income tax returns and the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year. For purposes of calculating the value of your specified foreign financial assets in applying this threshold, include one-half the value of any specified foreign financial asset jointly owned with your spouse. However, report the entire value on Form 8938 if you are required to file Form 8938.

The reporting thresholds for filing the FBAR and Form 8938 are different. The FBAR threshold is if the aggregate of all your overseas accounts meet or exceed USD 10K for even one day, then you are required to file the FBAR. Form 8938 has higher reporting thresholds and these thresholds also depend on whether you are single or married, and also whether you live overseas or in the US.

The FBAR has been around for decades; Form 8938 was introduced in 2011 and both forms can be somewhat redundant in terms of information provided on each form. The FBAR gets filed separately from your 1040 with a separate department of the US Treasury dedicated to monitoring and enforcing offshore accounts and has a different filing deadline than the 1040. Whereas the 8938 gets filed with the IRS with your 1040.

All of this reporting of offshore accounts and offshore income and assets is generally all part of the FATCA legislation passed by Congress in 2010.

[maxman71]

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Sure glad I'm been an honest little boy with Uncle Sam in including interest earned (even one stang) from my Thai bank accounts on my federal tax return (I don't file state tax) and submitting my FBAR each year also. With whatever reporting actually ends up being done by the FATCA process from Thailand to the U.S Treasury/IRS that data will correlate with my federal return and FBAR. I won't be looking over my shoulder for Uncle Sam.

But from looking at the U.S. Treasury FATCA web site and some of the model intergovernmental agreements it appears at a minimum these things will be reported: Person's name, Tax Identification Number (i.e., would probably be your social security number), account number, and account balance at the end of the year. And I thought I found one spot where it said report interest earned also but I can't find that again when looking this morning.

I expect at some point Thai banks will have Americans provide some additional info on current and new accounts, like their social security number, in order to comply with the reporting to the U.S. Treasury.

I spent some time yesterday looking at some of the IGA templates and their attachments and discovered although 1 Jul 14 was the kick-off date so to speak, there are other dates a couple years down the road that apply for certain reporting under certain conditions...it's kinda hurt my head in trying to understand the various dates. But with the U.S. wanting end of year data maybe it won't be until later this year Thai banks possibly ask Americans for more info...maybe have us fill out another form...but I'm guessing.

So, I'll just kickback and see what happens....as an American with four bank accounts with Bangkok Bank (#4 opened Dec 13) they have not contacted me for any info at all as of today 3 Jul 14....they just continue to accept my deposits, transfers, payments, etc.

My understanding is the foreign banks will report name, SSN/passport #, account #, high balance during the year and all withdrawals and deposits. But this understanding is based on what I read about a year ago, so it is possible the IRS backed down on such detailed reporting and it is now more along the lines of what you stated.

Like you, I also made sure I am in compliance years ago. The US gov't began going after unreported offshore accounts and income back in 2008 and they are being quite aggressive. Penalties for failing to report what is required can be quite draconian. My understanding is the IRS is still offering some form of partial amnesty for those who come forward voluntarily to report their accounts and income if they were required to do so but didn't.

I sure would not want to try flying under the radar on this one. Given the list of countries that knuckled under to the IRS' demand that foreign banks report their US Citizen/Green Card holders' accounts, there is really no place to hide unreported accounts and income legally.

[noendtoit]

For people's convenience I've attached a complete list of compliant institutions in Thailand.

FFIListPartial.pdf

I don't see the Thai Military Bank on the list. Does this mean I can continue to be a scofflaw, deal illegal drugs and funnel the immense profits into terrorist organizations seeking to overthrow the great Uncle Satan?

[pmarlin]

For people's convenience I've attached a complete list of compliant institutions in Thailand.

FFIListPartial.pdf

I don't see the Thai Military Bank on the list. Does this mean I can continue to be a scofflaw, deal illegal drugs and funnel the immense profits into terrorist organizations seeking to overthrow the great Uncle Satan?

Page 9

[Naam]

Unless you have $50,000 or equivalent in Thai Baht in the Bank I don't believe it is even reported. At least that is what I have read.

that's a wrong assumption. i am not a US citizen but was for some years a "US person" liable to pay US income tax. my European bank issued a single form 1999 for even the smallest amount of dividend or interest received. original was sent to the IRS, a copy to me.

i am talking of a time more than ten years ago when the big foreign multinational banks were scrambling to be approved as "Qualified Intermediary".

The subject is about FATCA for foreign banks. Don't know what you are replying to. Paying income tax is a different matter.

no it's not a different matter, both are very much connected!

[Pib]

Just regarding if a current or new account need to be reviewed/reported by the foreign bank, below are some cut and pastes from Model 1 IGA, Annex 1, 6 Jun 14. A Model 1 IGA is supposedly the IGA type Thailand is signing up to. Depending on what the bank decides they may not report anything if the account balance does not exceed $50,000 (or equivalent in foreign currency...approx Bt1.6M)). And once FATCA reporting gets on a true annual schedule versus just kicking off now as of 1 July 14, the bank will determine reporting requirement based on the deposit amount as of the end of the calendar year, which means even if you exceed $50K for certain periods during the year if come the end of the year you are not over $50K the bank does not have to report the amount. Now whetherThai banks decided to report every deposit regardless of amount, even just a few baht, then I guess that will be up to them. Once they automate this database retrieval they may decide to just report any amount unless the banks/Thai govt decide they do not want to report $50K or below amounts for customer privacy reasons (Thailand ain't big on privacy) as I'm sure many customers would prefer it that way---that is, if it's not a requirement to report it, then don't report it.

A. Accounts Not Required to Be Reviewed, Identified, or Reported.

Unless the Reporting [FATCA Partner] Financial Institution elects otherwise, either with respect to all Preexisting Individual Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in [FATCA Partner] provide for such an election, the following Preexisting Individual Accounts are not required to be reviewed, identified, or reported as U.S. Reportable Accounts:

1. Subject to subparagraph E(2) of this section, a Preexisting Individual Account with a balance or value that does not exceed $50,000 as of June 30, 2014.

III. New Individual Accounts.

The following rules and procedures apply for purposes of identifying U.S. Reportable Accounts among Financial Accounts held by individuals and opened on or after July 1, 2014 (“New Individual Accounts”).

A. Accounts Not Required to Be Reviewed, Identified, or Reported. Unless the Reporting [FATCA Partner] Financial Institution elects otherwise, either with respect to all New Individual Accounts or, separately, with respect to any clearly identified group of such accounts, where the implementing rules in [FATCA Partner] provide for such an election, the following New Individual Accounts are not required to be reviewed, identified, or reported as U.S. Reportable Accounts:

1. A Depository Account unless the account balance exceeds $50,000 at the end of any calendar year or other appropriate reporting period.

Edited July 4, 2014 by Pib

[pmarlin]

Unless you have $50,000 or equivalent in Thai Baht in the Bank I don't believe it is even reported. At least that is what I have read.

that's a wrong assumption. i am not a US citizen but was for some years a "US person" liable to pay US income tax. my European bank issued a single form 1999 for even the smallest amount of dividend or interest received. original was sent to the IRS, a copy to me.

i am talking of a time more than ten years ago when the big foreign multinational banks were scrambling to be approved as "Qualified Intermediary".

The subject is about FATCA for foreign banks. Don't know what you are replying to. Paying income tax is a different matter.

no it's not a different matter, both are very much connected!

You don't have a clue do you?

[Naam]

i don't waste precious time discussing the brushstroke of an old master's painting with blind people full of "clue".

[mahjongguy]

"I expect at some point Thai banks will have Americans provide some additional info on current and new accounts, like their social security number, in order to comply with the reporting to the U.S. Treasury. "

Already happening. Next time you go to Bangkok Bank you will be asked to fill out a W-9 and a short questionnaire. I assume the other banks are doing the same.

[pmarlin]

"I expect at some point Thai banks will have Americans provide some additional info on current and new accounts, like their social security number, in order to comply with the reporting to the U.S. Treasury. "

Already happening. Next time you go to Bangkok Bank you will be asked to fill out a W-9 and a short questionnaire. I assume the other banks are doing the same.

That doesn't make any sense. A W-9 is used to get a TIN. Tax Identification Number. Those with a SSN wouldn't use it.

[mahjongguy]

Google it yourself: Individuals and entities use the form to provide their taxpayer identification number to entities that will pay them income during the tax year.

[Pib]

Yeap, what mahjongguy said...the W-9 is used by say a financial company/bank to "request from you" your tax payer identification number such as your social security number and "your" certification/signature it's the correct number.

Form W-9, Request for Taxpayer Identification Number (TIN) and Certification

Use this form to provide your correct TIN to the person who is required to file an information return with the IRS to report, for example, income paid to you, real estate transactions, mortgage interest you paid, acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA.

Edited July 6, 2014 by Pib

[pmarlin]

Yep you guys are right

[mahjongguy]

The only reason I mentioned it is to remind folks to be sure they know their SSN the next time they go to the bank. Usually I can remember it, but sometimes...

[Naam]

Yep you guys are right

somebody got "clue" now

[Jingthing]

So are we supposed to go in to our Thai banks and request to fill out this form if we are existing account holders?

Are the Thai banks contacting people to request it?

I haven't heard anything from them by email, text, or mail directly.

Does it happen when you have business with the bank in person in any way? For some people it might be years before you have such a need for in person business.

What happens if you just never fill it out because they don't request it, you don't go in and request to fill the form?

Edited July 6, 2014 by Jingthing

[pmarlin]

Yep you guys are right

somebody got "clue" now

And you are still looking for yours

[Pib]

So are we supposed to go in to our Thai banks and request to fill out this form if we are existing account holders?

Are the Thai banks contacting people to request it?

I haven't heard anything from them by email, text, or mail directly.

Does it happen when you have business with the bank in person in any way? For some people it might be years before you have such a need for in person business.

What happens if you just never fill it out because they don't request it, you don't go in and request to fill the form?

If you don't have over $50K equivalent in baht (which is around Bt1.6M) in an account I expect the FATCA quotes in post #15 apply, which means the bank may not need or want to contact you.

[mahjongguy]

"So are we supposed to go in to our Thai banks and request to fill out this form if we are existing account holders?"

No need to go just for that purpose, not unless you think you won't otherwise visit your bank for the remainder of the year,

"Are the Thai banks contacting people to request it?"

Not that I've heard of so far.

"Does it happen when you have business with the bank in person in any way?"

Yes, it seems there is a system flag for the teller or account rep to request the paperwork before proceeding.

"For some people it might be years before you have such a need for in person business. What happens if you just never fill it out because they don't request it, you don't go in and request to fill the form?"

I doubt if anyone knows the answer to that yet for this situation. In the normal course of things, for a U.S. company paying money to a U. S. resident, there are deadlines, steps to follow.

[mahjongguy]

"If you don't have over $50K equivalent in baht (which is around Bt1.6M) in an account I expect the FATCA quotes in post #15 apply, which means the bank may not need or want to contact you."

I don't know about other banks but it seems like Bangkok Bank wants to get the info from all American depositors who happen to come into the branch. That seems like a smart idea. For example, you might open an account with 1,000 baht one day and then have a large deposit sent in soon afterwards.

[Jingthing]

I suppose it would be wise to at least proactively give them the info if you know you're going to have a large transfer, real estate sale, etc. Otherwise I can imagine issues and delays (even possibly U.S. tax withholding) if they don't have it.

Edited July 6, 2014 by Jingthing