Thai Revenue Dept Proposes Taxing Joint Accounts

[Pib]

Bankers' association seeks talks with Revenue Dept on plan

SUCHEERA PINIJPARAKARN

THE NATION April 2, 2015 1:00 am

THE Thai Bankers' Association (TBA) will hold discussions with the Revenue Department as soon as possible about proposed changes to the Revenue Code affecting holders of joint bank accounts.

The proposed amendment to the code would apparently force joint account holders to pay tax on their deposits, as they would be considered "limited partnerships" or "registered ordinary partnerships". To avoid this, people wanting, for example, to open a joint savings account for their children would have to register the account in only one name.

Boontuck Wungcharoen, chairman of the TBA and chief executive officer of TMB Bank, said the association would get the full details of the proposed amendment from the Revenue Department before informing member banks, and the discussion with the department should be held as soon as possible.

He said that in the meantime, banks would continue to open joint accounts as usual.

Kris Chantanotoke, executive vice president of Bank of Ayudhya, said it had around 100,000 joint accounts. While the TBA is trying to get a clear understanding of the proposed amendment, the bank will have to set up a system to verify the tax numbers of joint-account depositors.

Meanwhile yesterday, TMB Bank announced a new deposit product called "TMB All Free". It hopes that 1.2 million of its 2015 of 1.4 million to 1.5 million new accounts will be TMB All Free accounts, which will waive fees for several types of transactions.

Boontuck said that according to TMB Bank's research, 94 per cent of medium-income depositors make bill payments around four times per month, one interbank transfer and five ATM cash withdrawals, all of which normally carry fees. But holders of TMB All Free accounts will be able to make free cash withdrawals and inquiries at any bank's automated teller machines nationwide, with no limit on the number of transactions.

In the Thai banking industry, there are around 72 million savings accounts, of which 10 million are held by medium-income customers, defined a those with monthly incomes of Bt15,000. TMB has 6 per cent of the 72 million accounts.

Of its 4 million savings accounts, 2 million are active, Boontuck said.

[Pib]

Thai govt seems to be proposing all kinds of new taxes...inheritance tax, land and property tax, higher excise taxes, maybe raising VAT, and now joint bank accounts would be taxed.

[CaptHaddock]

Thai govt seems to be proposing all kinds of new taxes...inheritance tax, land and property tax, higher excise taxes, maybe raising VAT, and now joint bank accounts would be taxed.

But the proposals for taxes that would affect the rich always seem to be dismissed at the last moment: e.g. inheritance and land and buildings. I predict that the VAT increase will go forward since it is the most regressive of the lot.

[MacWalen]

Thai govt seems to be proposing all kinds of new taxes...inheritance tax, land and property tax, higher excise taxes, maybe raising VAT, and now joint bank accounts would be taxed.

That is correct, also they are trying to tax private schools, especially tutorial schools but language schools could be in time taxed too.

[CaptHaddock]

Thai govt seems to be proposing all kinds of new taxes...inheritance tax, land and property tax, higher excise taxes, maybe raising VAT, and now joint bank accounts would be taxed.

That is correct, also they are trying to tax private schools, especially tutorial schools but language schools could be in time taxed too.

There are many dubious, private "schools" in Bangkok run by scurrilous operators who lacks qualifications. If some of them were taxed out of existence, it wouldn't be such a loss.

[Pib]

Bank account laws in Thailand are just different from what most farangs are use to in their home country...and apparently the Thai tax laws see joint accounts as a significantly different animal from accounts in one person's name....and of course being able to designate a beneficiary for a Thai bank account is a no-no; instead, the will and probate process is used. I know that if I have to tell Mrs Pib that we no longer want to have the couple of joint bank accounts we currently have because they would be taxed, she'll figure I just trying to pull something sneaky. And what happens if I die, most of our money is say in my account, then how does she "legally" and "quickly" get to those funds (without illegally just using my ATM password/ibanking password if she knows it) without the drawn out probate/will process.

I can't remember a time when so many new tax proposals have come along...and whether we consider them good or bad like maybe should language schools get taxed or not, it just seems the current govt is pressing hard to round-up new and permanent tax revenue sources.

[Langsuan Man]

Bank account laws in Thailand are just different from what most farangs are use to in their home country...and apparently the Thai tax laws see joint accounts as a significantly different animal from accounts in one person's name....and of course being able to designate a beneficiary for a Thai bank account is a no-no; instead, the will and probate process is used. I know that if I have to tell Mrs Pib that we no longer want to have the couple of joint bank accounts we currently have because they would be taxed, she'll figure I just trying to pull something sneaky. And what happens if I die, most of our money is say in my account, then how does she "legally" and "quickly" get to those funds (without illegally just using my ATM password/ibanking password if she knows it) without the drawn out probate/will process.

I can't remember a time when so many new tax proposals have come along...and whether we consider them good or bad like maybe should language schools get taxed or not, it just seems the current govt is pressing hard to round-up new and permanent tax revenue sources.

There is nothing illegal with her withdrawing funds using your ATM card/ibanking password since there is no fraud involved and really who is going to know

The reason there is such a push on for new taxes is because the military wants new toys since there is no one to stop them now. New aircraft for the Air Force, new tanks and APC's for the Army and of course the much needed submarines for the Navy

[Pib]

I see in today's/24Apr15 Bangkok Post there is an article titled, "Tax waiver mulled for dual accounts" the Finance Ministry is set to waive tax imposed on interest earned from joint deposit accounts to dispel worries by account holders. However, the article says only account holders who are married couples or blood relatives can expect to enjoy the privilege.

I wonder how the banks will verify that relationship because I know when I opened my joint bank accounts with the wife I don't remember them asking what relation we were to each other. Maybe they did and I just can't remember. Also, the majority of Thai marriages are a religious ceremony only but the marriage is never registered/licensed with the govt....that makes it easy just to walk away from each other if the marriage don't work out. So, I wonder how banks would verify a couple is really married....maybe just the couple signing some bank certification form...or maybe the bank will ask for a copy of the marriage certificate which the couple would only have if they registered/licensed the marriage with the govt.

I also checked both of my joint accounts via ibanking a few minutes ago and no tax has been withheld to include the last interest payment in mid Dec 14. But I expect the tax would have only been withheld when the interest is paid...which for Bangkok Bank interest payments for regular savings accounts occur in mid Jun and mid Dec (i.e., semi-annually). Plus it's only been recently that the banks raised the this issue to the Finance Ministry due to a recent regulation change, with "recent" sounding like being just over the last few months...maybe the first of the year.

The article said tax has been charged on interest from joint deposit accounts ever since a recent change in taxation on groups of persons that requires interest from joint accounts to be considered taxable income. Apparently the the Revenue Department has tightened taxes on groups of persons after some individuals earning high incomes exploited loopholes to understate their tax payments when such interest was subject only to withholding tax. But like I mentioned above from checking my joint accounts no tax has been withheld and I expect any tax withholding would have occurred only when your bank pays interest.

So it appears joint accounts between married couple and maybe other family members like a parent and a child will not incur a withholding tax unless of course you exceed Bt20K interest earned per year which has always been in effect. But it's not a done deal yet but appears to be heading that way.