tax payable on deposit interest earned

[Dumbfounded]

I have savings invested in term deposits with Bangkok bank and I know the tax rate for falangs in 15% if interest earned is above 10,000 baht

I have 2 questions :-

1. Do you pay tax only on the amount earned above the 10,000 baht threshold or on the total amount of interest earned ?

(I would expect it to be on the amount earned above 10,000 but I'm not 100% sure and the bank staff didn't know either)

2. All of my term deposits are not at the same branches, also some will earn over/under10,000 baht interest.

Will the bank combine ALL my term deposits to see how much total interest I will earn for the year and tax me accordingly, or will the different branches not know what my total term deposits and interest are ?

ie, 1 TD will pay 24,000 bht, another 15,000 bht, another 8,000 baht, all held at different branches and maturing at different times this year

Appreciate any info/knowledge/wisdom

Dumbfounded

Edited September 15, 2014 by Dumbfounded

[Pib]

My experience so far with a half dozen or so Bangkok Bank fixed deposits of various lengths from 4 months to 15 months is the the 15% tax withholding of interest earned applies to "any" amount of interest earned. Even if your earn say a total interest of Bt1,000, 15% of that will be withheld/sent to the govt a tax withholding. But you can easily get it refunded each year.

Where did you get this Bt10,000 figure? Got a weblink to the Bangkok Bank webpage talking about it.

[fletchsmile]

Thai Revenue Links:

http://www.rd.go.th/publish/6045.0.html - section on interest

http://www.rd.go.th/publish/37749.0.html#section42 - section 42

It should be total/aggregate interest in the year.

Many people confuse and mix up the admin process of whether their bank deducts tax or not, and the tax liability.

Cheers

Fletch

[Dumbfounded]

Thanks for your replies.

Sorry if I am wrong regarding the 10,000 baht threshold but I thought I read that here on TV in another banking topic.

None of my TD's have matured yet so I don't have any first hand knowledge re tax deducted.

Dumbfounded

[Briggsy]

Dumbfounded

Your post suggests you are very confused. You are confusing liability for tax with the actual process of deduction. To answer your question, it is likely that 15% of all interest will be subject to withholding tax.

You are also confused regarding the deduction of withholding tax from term deposit interest. It not only applies to white people from Western nations, but also to dark-skinned people and even to dark-skinned Thais!

When the interest is paid out, the bankbook will show clearly Interest and Withholding Tax. If you want to reclaim the withholding tax, you get the tax certificate from the bank and put in a claim at your local tax office.

[Pib]

As I mentioned earlier I think you will find when each of your Bangkok Bank fixed term deposits mature, a 15% withholding tax will be applied regardless of the amount of gross interest earned. You will see two entries in your passbook occurring at the same time...one paying the gross interest and then one applying/deducting the 15% withholding tax. Link

Now, I'm talking a traditional fixed deposit account..there are other hybrid products offered by Thai banks which have "fixed" in their name/listed on webpages under the fixed deposit area, and don't withhold any tax, but these products usually pay less interest..and of course they also come with their unique Terms and Conditions.

[KittenKong]

Sorry if I am wrong regarding the 10,000 baht threshold but I thought I read that here on TV in another banking topic.

You may be thinking of the interest limit below which on some types of savings accounts banks will not withhold tax and above which they will. The Krungsri Mee Tae Dai is one such account and for that the limit is 20,000B, as far as I know.

The actual rules and limits seem to vary from bank to bank.