Paying Tax on interest

[shaul19]

In most of the countries interest is subject to withhold tax. There are some count tries that interest will be free of tax if you are not resident of the country. You can try in this area Hong Kong or Singapore.

[CMBob]

As someone else noted in the thread, one can get a refund of the 15% withheld presuming you're not earning other taxable income in Thailand. I've done it and it's fairly easy process. And I'll do it again this coming January.

A separate question is whether you have to declare the interest earned here in your home country. I do it (report the interest on my tax form with the IRS in the US) because I'm required to do it and am just happy I can earn the larger interest returns here in Thailand.

[ggt]

Interest is Income...been paying taxes on interest for all my life...what galls me in a tax on the aggregate amount of money being held in a bank in your name...not everyone taxes this...but is just another creative way to bilk the public...the politicians and bankers spend most of their time scheming to take more of the average citizen's money...this is what elected officials do best...

[orpheus454]

Thailand's withholding at source on bank interest is somewhat different than what we're used to in the West. They do it on everyone -- non resident investor or a Thai citizen dirt farmer, who doesn't earn enough to have to file a Thai tax return. And also on a fat cat Thai, in the 35% tax bracket. The dirt farmer, of course, should apply for a refund. The fat cat, however, would choose not to apply for a refund, but is therefore not required to include this interest in his Thai tax return -- thus paying 15%, not 35% on this interest income.

Rubbish!

Sure, on the face of it they're saving 20 percentage points on the tax payable on that interest, but they are in fact contravening the relevant taxation laws and are subject to punitive measures, including incarceration, if chased up.

[orpheus454]

As someone else noted in the thread, one can get a refund of the 15% withheld presuming you're not earning other taxable income in Thailand. I've done it and it's fairly easy process. And I'll do it again this coming January.

Sorry, but you'll need to wait until March.

[Pib]

As someone else noted in the thread, one can get a refund of the 15% withheld presuming you're not earning other taxable income in Thailand. I've done it and it's fairly easy process. And I'll do it again this coming January.

Sorry, but you'll need to wait until March.

Well, you can wait to March if you want to but I'll be doing mine in early Jan like every year I've done it so far and have my refund by the end of Jan or early Feb. The normal filing period is Jan-Mar. You can also file after this period but there will be a small penalty of a couple hundred baht.

[JimGant]

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Thailand's withholding at source on bank interest is somewhat different than what we're used to in the West. They do it on everyone -- non resident investor or a Thai citizen dirt farmer, who doesn't earn enough to have to file a Thai tax return. And also on a fat cat Thai, in the 35% tax bracket. The dirt farmer, of course, should apply for a refund. The fat cat, however, would choose not to apply for a refund, but is therefore not required to include this interest in his Thai tax return -- thus paying 15%, not 35% on this interest income.

Rubbish!

Sure, on the face of it they're saving 20 percentage points on the tax payable on that interest, but they are in fact contravening the relevant taxation laws and are subject to punitive measures, including incarceration, if chased up.

Rubbish! The Thai tax code indeed gives tax incentives to certain interest earning investment vehicles.

Incarceration? What have you been smoking?

The following forms of interest income may, at the taxpayer’s selection, be excluded from the computation of PIT provided that a tax of 15 per cent is withheld at source:



interest on bonds or debentures issued by a government organization;
interest on saving deposits in commercial banks if the aggregate amount of interest received is not more than 20,000 baht during a taxable year;
interest on loans paid by a finance company;
interest received from any financial institution organized by a specific law of Thailand for the purpose of lending money to promote agriculture, commerce or industry.

http://www.rd.go.th/publish/6045.0.html

[CMBob]

As someone else noted in the thread, one can get a refund of the 15% withheld presuming you're not earning other taxable income in Thailand. I've done it and it's fairly easy process. And I'll do it again this coming January.

Sorry, but you'll need to wait until March.

Not sure why....I applied for it about the 3rd week of January last year and had the money (check) in the mail about 10 days later. Like Pib said, you can wait until March but I'll do it before the end of January just like the last time.

[jacko45k]

If you aren't earning money in Thailand, you can reclaim the tax, many Expats do.

You have to get a tax number and from what I hear it isn't problematic. Personally I like to stay under the radar and pay-up my living in Thailand charge.

[sustento]

It pains me that people like you can exist on the internet , when in real life you'd be just an insignificant dweeb who wouldn't say Boo to a Goose

As you say NEXT

On the other hand you could reclaim any witholding tax that you pay (as long as its over 10,000Bt) by getting yourself a Thai tax number and applying to your nearest tax office for the refund...

[akentryan]

The best fixed rate at the moment, to my knowledge, is at Kasikorn. That's 3.5% for 30 months with interest paid monthly with a minimum of 1,000,000 baht and a maximum of 3,000,000.The rates seem to change monthly so every time a fixed deposit matures you have to scout around. If you have a large amount on deposit the fixed rate is somewhat negotiable. At SCB the amount used to be 5,000,000 and you could get 3.5% versus the advertised rate of 3.3%. At Krueng Thai I am told the amount has to be 10,000,000. The 15% tax deduction is automatic. In my case, I am on a retirement extension and my Thai wife files our tax return at the end of the year. Her refund gets credited into her designated bank account and mine goes into my designated account. You need a statement from each bank where interest was withheld. My wife takes it over to the tax office (I do not have to go) and they help her file the return.The last I heard there is threshhold of 150,000 in income before there is any actual tax liability meaning anything less than that and the 15% is fully refunded.I also saw somewhere that the threshold was 200,000 or is being changed to that amount at some point in the future. My experience is that Bangkok Bank and Kasikorn are more difficult to deal with than the smaller banks. SCB usually doesn't have a very good rate and doesn't like to pay interest monthly. There used to be government bonds that were paying 5% semi-annually but I have not seen any in a couple of years. Keep in mind that FATCA now requires Thai banks to report accounts held by Americans which is primarily aimed at money laundering. It would be a very small step to make sure Americans are also reporting foreign interest earned. Not a problem for us as we report it any way. In addition we file an annual report of deposits in excess of $10,000.

Edited October 26, 2014 by akentryan

[meatboy]

The best fixed rate at the moment, to my knowledge, is at Kasikorn. That's 3.5% for 30 months with interest paid monthly with a minimum of 1,000,000 baht and a maximum of 3,000,000.The rates seem to change monthly so every time a fixed deposit matures you have to scout around. If you have a large amount on deposit the fixed rate is somewhat negotiable. At SCB the amount used to be 5,000,000 and you could get 3.5% versus the advertised rate of 3.3%. At Krueng Thai I am told the amount has to be 10,000,000. The 15% tax deduction is automatic. In my case, I am on a retirement extension and my Thai wife files our tax return at the end of the year. Her refund gets credited into her designated bank account and mine goes into my designated account. You need a statement from each bank where interest was withheld. My wife takes it over to the tax office (I do not have to go) and they help her file the return.The last I heard there is threshhold of 150,000 in income before there is any actual tax liability meaning anything less than that and the 15% is fully refunded.I also saw somewhere that the threshold was 200,000 or is being changed to that amount at some point in the future. My experience is that Bangkok Bank and Kasikorn are more difficult to deal with than the smaller banks. SCB usually doesn't have a very good rate and doesn't like to pay interest monthly. There used to be government bonds that were paying 5% semi-annually but I have not seen any in a couple of years. Keep in mind that FATCA now requires Thai banks to report accounts held by Americans which is primarily aimed at money laundering. It would be a very small step to make sure Americans are also reporting foreign interest earned. Not a problem for us as we report it any way. In addition we file an annual report of deposits in excess of $10,000.

jan.this yr.we found the best fixed rates were with land and house bank.3.5% over 15months interest paid monthly.

all the up to date rates are in the bank interest forum.

[Si Thea01]

I keep my safety net in a savings account in the land of Oz, however, as I am now classified as a non-resident the beloved tax department takes 10% tax of the interest every month. I don't mind as there is no way I will bring all my funds here. My missus taxes me plenty each month, as does the Thai bank, on the transfer of funds.

[maoro2013]

I know the UK does it , didn't know many others did. IMO if I do not live here I am not receiving the benefit of paying tax or to be more accurate what I SHOULD be getting for paying tax

Australia also. Not many know,if you stay away for more than 5 years they call you 'non resident for tax purposes' and you have no tax free allowance. You will pay 35% on every $ earned from australian sources.

If you are not classed as non resident for tax in Thailand they will then want tax on any money you earn in Thailand,even tho you already paid tax on it ..a**holes

Not quite right about Australia.

The law states that if the 'intention' is to be absent from Australia for an extended period then you can contact the tax dept and say you are a non resident for tax whether you end up staying away for lng or not. Case law supports this.

Certain other things will stop you being a non resident for tax which include maintaining maintaining or paying into a superannuation fund in Australia. 5 years has no relevance in law but may be a rule of thumb for the tax office.

[shaurene]

In 99% of country's you are taxed on interest you make in a bank. It goes to the government revenue coffers, they have to find tax from all things as how els would they (UK/Europe be able to give you all the perks if and when you need them.

[Pib]

It pains me that people like you can exist on the internet , when in real life you'd be just an insignificant dweeb who wouldn't say Boo to a Goose

As you say NEXT

On the other hand you could reclaim any witholding tax that you pay (as long as its over 10,000Bt) by getting yourself a Thai tax number and applying to your nearest tax office for the refund...

Nope, all of my tax refunds have been for amounts way less than Bt10K.

[macapie]

I used to have a fixed deposit ( 1 year to 1 year ) for me to qualify for an extension to my retirement visa ( if that's the correct term ?) When I went to renew the deposit at the end of the year, I noticed i was getting 1400 Baht interest each 3 months with a deduction of 400 Baht for the same period. Not understandind the deduction I asked the bank staff for an explanation, and was told that it was witholding tax. So I was virtually a Thai tax payer with no advantages Ha Ha.Work out the % of 400 Baht from 1400 Baht and it was approx. 15 %, so I withdrew the lot for a holiday.

[meatboy]

It pains me that people like you can exist on the internet , when in real life you'd be just an insignificant dweeb who wouldn't say Boo to a Goose

As you say NEXT

On the other hand you could reclaim any witholding tax that you pay (as long as its over 10,000Bt) by getting yourself a Thai tax number and applying to your nearest tax office for the refund...

Nope, all of my tax refunds have been for amounts way less than Bt10K.

dont know where you[sustento]get as long as its over 10,000bht.from.

you can claim any amount up to,for example.

if you deposited 5,000,000bht.x 3% over 12months you would earn 150,000bht.interest, or call it income.exempt of tax.

tax witheld would be 150,000bht.x 15% =22,500bht.this you would be able to reclaim back.

[Khunangkaro]

A few year back I got refunded the 15% tax on interest that was automatically debited from a fixed account at Bangkok Bank. Processed as follows.

My wife didn't know and so I had to find out for myself. I guessed the Bank should know how and what. Went there in January. As usual at this bank, near Issan sticks, they treated me as an Alien from Mars who needs all kinds of "Services" except what he really asks for. Never before supported a tax rebate to an Alien, if not anybody.

With my bankbook I was forwarded to the Tax Office that has a substation at the Ampher Office 500 meters further.

The very helpful lady there explained it could all easily be done. Just return to the bank where they must print a tax withheld certificate.

Back at the bank I advised friendly to the same blank face to produce the needed paper. Blank face started to think, went five minutes out of sight, came back and then in short time I left with an automatically printed certificate.

The lady at the Tax Office made me a tax number with my name in Thai(?) at her computer terminal and after a few weeks I received by mail a cheque which I changed for cache at the main Provincial Tax Office as to avoid fees.

Later in March the postman dropped a pack of papers for income declaration. The lady from the local Tax Office took care of the papers (for recycling?) with a big smile, as I had no income from Thailand above interest.

Note: I don't remember what I used to verify name & address. I guess it was my yellow housebook which has a Thai ID-Number (lekhpracharmtuapracharchon) and names in Thai. You can get y.housebook at Ampher (~฿30). Must bring translation of passport and spouse to verify address. Some lady in Ubon made nice printout of pp translation (฿150) with her translator's name & copy of her ID-card that my Ampher accepted without legislation.

(I have a friend not officially married with GF & tourist visa entry who got a y.housebook on her address where they stay).

[whiteman]

Keeping my big ones in New Zealand at 4.5% for 9 months interest paid quarterly tax is 10 % as none res. No way would I leave and big ones in Thailand banks. Better to invest in the SET with companies paying div of 5% per year

[ExPratt]

How far could you back claim ?. We stuck 3 million in my wife's bank about 5 years ago, I was just pleased it didn't get cained , so have not looked t Interest and definitely not tax

[ExPratt]

If I can get the tax sorted , I'd be ok with 2.8. Not going near the markets. I opened a 5 year investment plan 2500 usd a month and surrendered it after 4 years just before the Dow went south a couple of weeks ago. I didnt lose but I didnt make much either. If I would have carried on to the end , I would have made about 12k , not much in 5 years. Unless you are a specialist investor you are not going to make much . The money is now in Time deposit in HSBC Malaysai at 3.25

[meatboy]

How far could you back claim ?. We stuck 3 million in my wife's bank about 5 years ago, I was just pleased it didn't get cained , so have not looked t Interest and definitely not tax

the wife can claim back 3yrs.she needs to go to the bank and get the tax witheld certificate.also they will want to see the pass book.has she been registered with the revenue never mind if it was 30yrs ago her id.no will be in their system.

[tingtongtourist]

I know the UK does it , didn't know many others did. IMO if I do not live here I am not receiving the benefit of paying tax or to be more accurate what I SHOULD be getting for paying tax

Australia also. Not many know,if you stay away for more than 5 years they call you 'non resident for tax purposes' and you have no tax free allowance. You will pay 35% on every $ earned from australian sources.

If you are not classed as non resident for tax in Thailand they will then want tax on any money you earn in Thailand,even tho you already paid tax on it ..a**holes

Not quite right about Australia.

The law states that if the 'intention' is to be absent from Australia for an extended period then you can contact the tax dept and say you are a non resident for tax whether you end up staying away for lng or not. Case law supports this.

Certain other things will stop you being a non resident for tax which include maintaining maintaining or paying into a superannuation fund in Australia. 5 years has no relevance in law but may be a rule of thumb for the tax office.

It doesnt really matter what tax status you refer. Please correct if wrong ,but as for what you read on ATO website now they calculate how many days you are out of australia and deduct this off your tax free allowance. So if you stay away for half the financial year in effect you only allowed half the tax free threshold.

this is what they say but half of these laws the public wouldnt know of and my cousin who is accountant even answer yes or no on a lot of things.

So many laws the whole thing is a bloody shambles.

ive heard of aussies who stay away from country get the medicare card cancelled but again; doesnt seem to be any solid rule to go by, just seem to rely on what you would tell them

[patongphil]

Can anyone confirm that you have to go to your actual bank branch to get the income tax withheld ertificate or will any branch of the bank do?