IRS form requested at Bangkok Bank

[arunsakda]

Time deposit matured recently so I went in to create a new account with promotional rate on 11 month CD. I have been with the branch for years. For the first time I was asked to complete a USA IRS W-9 Form at Bangkok Bank. No problem for me as I am FATCA compliant and report every satang of the piddling interest earned anyway.

Obviously the rumour mongers who previously stated that US persons would be binned were spouting rubbish.

Edited January 6, 2015 by arunsakda

[Pib]

Yea, standard procedure now. You'll be handed a questionnaire regarding citizenship to fill out and if having U.S. citizenship you need to complete the W-9 form also...takes about 5 minutes to read/complete both forms. Then on with the account opening. As a U.S. citizen I've opened an account with Krungsri Bank around Aug 14 and another Bangkok Bank account last week and in both cases just the two forms mentioned above were required in addition to the standard account opening forms they always had. Thai banks started requiring the two additional forms around 1 Jul 14 when FATCA went into full effect. All Thai banks now have FATCA agreements with the IRS and the Thai govt reached an agreement in substance with the IRS on 24 Jun 14.

Edited January 6, 2015 by Pib

[worgeordie]

The long arm of the US and IRS,you can run but you cannot hide.

regards worgeordie

[Skypattaya]

I already had my accounts set up many years ago but FATCA is BS to say the least. I haven't had to fill out any IRS forms so far with Bangkok Bank or SCB in Pattaya. But try to transfer money out of Thailand over the $50K money laundering act is a royal pain in the butt.

[Skypattaya]

The long arm of the US and IRS,you can run but you cannot hide.

regards worgeordie

Oh yes you can if you have enough politicans and regulatary capture agencies in your K-

Street people and revolving door gov to big fat cat jobs when they retire. The corruption in Thailand is way smaller than what is happening in Germany, the USA, and the UK with their big banks. Many of these big banks have been fined over 800 billion USD last year for cheating and it was only considered about 10% of what they stole and they didn't have to admit guilt and nobody went to jail. If you work for them, yes you can hide.

[Skypattaya]

I've run into several Americans in Pattaya and we have talked about FATCA and filing a FBAR, etc. Here is a helpful web site:

https://americansabroad.org/

I've read articles that say only 5% of Americans with reportable foreign bank accounts have complied with FATCA and filed a FBAR when it was first required. Another 10% have turned themselves in in the Amnesty Program. Right now that program wants 29% of the largest balance of the account no matter how much is in it at the time. This is just the fine for not reporting it. There is pending legislation to change these harsh penalties for expats.

The IRS has had its budget cut by congress and I used to work for the gov and I know most of them in offices and management are total dummies. The really smart ones will go after the big fish without political connections and the others will go after the easy low hanging fruit....us with foreign bank accounts.

[rijb]

China wants to do the same.

http://www.nytimes.com/2015/01/08/business/international/china-starts-enforcing-tax-law-for-citizens-working-abroad.html?_r=0

[Pib]

China wants to do the same.

http://www.nytimes.com/2015/01/08/business/international/china-starts-enforcing-tax-law-for-citizens-working-abroad.html?_r=0

Give it another 10 to 20 years and many more countries will be doing the same....if it generates more tax revenue, countries will want to do it. Plus, today's technology, internet, computers, etc. makes it much to collect/exchange financial info between countries. Just a matter of time.

[JimGant]

Heck, it's already here. Check out this site (and/or search on FATCA + OECD):

http://www.kpmg.com/lu/en/issuesandinsights/articlespublications/pages/luxembourgtaxnews-issue2014-04.aspx

Many/most of these OECD countries don't tax worldwide income, as does the US. But, obviously they're sniffing some return for all this effort.

Guess all farangs, at least the blue eyed OECD versions, will soon be filling out extra paperwork at their favorite Thai bank. Thanks a lot, you bloody Yanks

Another quote from the above search:

Fifty-one countries sign OECD pact to tackle tax cheats

Finance ministers and tax chiefs from 51 countries signed an agreement on Wednesday to automatically swap tax information, which Germany’s finance minister said heralded the end of tax evasion via secret bank accounts.

“Let’s make a joint contribution to more transparency and fairness in our globalised 21st century,” Wolfgang Schaeuble told a taxation conference of about 100 countries coordinated by the Organisation for Economic Cooperation and Development.

Edited January 11, 2015 by JimGant

[yankee99]

bkk bank is one of the few that let's Americans open mutual funds

[Time Traveller]

bkk bank is one of the few that let's Americans open mutual funds

That doesn't necessarily mean any do. The tax laws make it very unfavorable for Americans open a foreign mutual fund.

[Bakeman]

I thought individuals from the USA only had to report amounts over $10,000 and if you split the 800K between several banks and keep them under 10k each it would not have to be reported? Am I wrong?

[JimGant]

I thought individuals from the USA only had to report amounts over $10,000 and if you split the 800K between several banks and keep them under 10k each it would not have to be reported? Am I wrong?

Yes, you're wrong. It's the aggregate amount at any single moment, of all your worldwide bank accounts. If you have a Bangkok Bank account, with $9990 in it, that you empty out in the morning -- then open an account at Kasikorn with that $9990 in the afternoon -- no FBAR reporting required. But, if you have both a Bangkok Bank account and a Kasikorn bank account open at the same time -- and the aggregate of both exceeds $10k at any time during the year -- it's FBAR time. And all those other accounts open at the same time, even with next to nothing in them, also have to be reported.

But for FATCA reporting, if you have $49,999 in each bank account at year's end, neither Bangkok Bank nor Kasikorn has any required reporting under FATCA (unless you exceeded $75k at any time in either bank during the year).

Edited January 13, 2015 by JimGant

[taxout]

You'll find the draft FATCA agreement between the US and Thailand here:

http://www.fpo.go.th/FPO/modules/Content/getfile.php?contentfileID=6860

It was initialed and agreed in principle last summer. As a result, Americans aren't being kicked out of Thai banks, but are being required to provide their Social Security numbers.

[JimGant]

You'll find the draft FATCA agreement between the US and Thailand here:

http://www.fpo.go.th...tentfileID=6860

Interesting. No mention of the $50,000 de minimis threshold.

The Treasury guidance does say the de minimis criteria need not be used:

Accounts with a balance or value that does not exceed $50,000 are exempt from review, unless the F.F.I. [foreign financial institution] elects otherwise.

But some reports are saying the aggregating requirement may have some large, multi national financial institutions opting out of de minimis:

A number of FFIs are not going to use the $50,000 de minimis exception due to difficulties in changing multiple systems to calculate the value of its depository accounts.

But, Thai financial institutions -- how many of them have a huge IT footprint?

This is a gov't to gov't agreement -- and I bet some (most) Thai banks are annoyed at this bureaucratic agreement, since now all US person accounts are going to require 1099 equivalents. Using de minimis criteria would reduce reporting by probably more than 95% -- and that's a real cost savings. Plus, Treasury eased up on the aggregating requirement, stating that, if an institution's IT could identify multiple accounts -- but not aggregate value -- then forget aggregating and look at each account's value stand alone.

Anyway, this is still a draft IGA. But maybe best to start reporting on your Schedule B every satang earned on your Thai bank accounts. Christ, even US banks need not 1099 amounts less than $10.

[BKKSnowBird]

I had a Thai account when I was teaching there. Tried to close it before I left but they said I had to go to the branch where I opened it, so I just took all money out at the ATM. Left 97 baht. Just checked and looks like they took 50 baht/month fee for 2 months and closed it!! Hope they didnt report the 3 cents in interest to the IRS. Lol

[taxout]

"No mention of the $50,000 de minimis threshold."

The nitty-gritty is in Annex I and II, which are not part of the published draft. See, e.g., the definition of Financial Account: "Notwithstanding the foregoing, the term 'Financial Account' does not include any account that is excluded from the definition of Financial Account in Annex II."

"This is a gov't to gov't agreement -- and I bet some (most) Thai banks are annoyed at this bureaucratic agreement."

But there's a tradeoff. The agreement sets out a FATCA safe harbor. If the banks follow the very detailed procedures in Annex I and II, they won't be subject to FATCA penalties.

"Anyway, this is still a draft IGA."

It's not a discussion draft. It's been initialed and agreed in principle.

The most interesting aspect of this agreement: it's reciprocal. By 2017, the U.S. will be requiring U.S. banks to obtain the Thai tax numbers of accountholders resident in Thailand. Including some posters here, no doubt.

[JimGant]

The nitty-gritty is in Annex I and II, which are not part of the published draft. See, e.g., the definition of Financial Account: "Notwithstanding the foregoing, the term 'Financial Account' does not include any account that is excluded from the definition of Financial Account in Annex II."

Indeed. I overlooked the missing annexes.

So, then, it's probably certain the $50,000 threshold will be used (from a cost standpoint it wouldn't make any sense otherwise) -- and that most of us won't have any 1099 equivalents emanating from our Thai banks.

Just what exactly Thai revenuers will do with all those 1099s flowing from US banks should be interesting -- being that it's not taxable if not brought into Thailand in the year earned. "But officer that $15000 I wired to Thailand is from the account's principal, not the reinvested interest." Fungibility will be the Thai investor's friend (unless they change the not-in-same-year law).