Is Tax-Exempt Fixed Account Really Tax-Exempt?

[scoutman360]

Are the tax-exempt fixed account offers really tax-exempt? I am not questioning those of you who are retired and can get your tax refund. This question is regarding those who work in Thailand and earn more than the 150,000 baht threshold. If such person was to deposit enough in a tax-exempt fixed account to accumulate more than 20,000 baht interest, would they be required to include the interest income on their tax return, even though it was sold as a tax-exempt account?

I see these offers from GSB, and a few others occasionally. I am questioning whether or not these accounts mean (a) the bank is not deducting the 15% tax but standard tax laws apply, or ( it is really tax-exempt, regardless of income and interest earned.

But appreciate a reply from THOSE WHO KNOW. Thanks kindly.

[AyG]

(1) AFAIK, all the tax free accounts have a maximum amount you can deposit, so you can't actually get more than the personal tax allowance.

(2) One should declare the interest on one's tax return. If you exceed your allowance, it is taxable.

(3) Many people open multiple such accounts and don't declare the interest. This is illegal, but there again I've never heard of anyone getting caught.

[akentryan]

I have also been told when I wanted a GSB savings plan that it was for "Thais Only"

[scoutman360]

(1) AFAIK, all the tax free accounts have a maximum amount you can deposit, so you can't actually get more than the personal tax allowance.

(2) One should declare the interest on one's tax return. If you exceed your allowance, it is taxable.

(3) Many people open multiple such accounts and don't declare the interest. This is illegal, but there again I've never heard of anyone getting caught.

Thanks! I usually file P.N.D. 91 form, but I can't find anywhere on this form to add interest income. Am I missing something?

[scooterboy]

(1) AFAIK, all the tax free accounts have a maximum amount you can deposit, so you can't actually get more than the personal tax allowance.

I'm wondering - what's the current personal tax allowance limit?

Thanks

[AyG]

(1) AFAIK, all the tax free accounts have a maximum amount you can deposit, so you can't actually get more than the personal tax allowance.

I'm wondering - what's the current personal tax allowance limit?

Thanks

30,000

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

[Dumbastheycome]

Does the above relate to interest earnings only for those who hold a work permit...re declarations local or in expat home territory? I appreciate that home countries may have difference requirements. I ahve an 800000 deposit for retiement extension purposes. Am I obliged to declare the earnings in Thailand if in excess of 30000 too? I shudder to think what my home country would tax nab on top !

[scoutman360]

I read this link posted by AyG. I don't know where the 30,000 personal tax allowance came from. Did you mean 20,000?

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

This is my understanding of the document. Please tell if you have a difference interpretation.

Par. 1. All Residents of Thailand (in the kingdom more than 180 days) and Non-residents must pay taxes on income derived in Thailand.

Par. 2.1 (4). Interest income is to be included at part of your taxable income.

Par. 3.1. If your total taxable income is less than 150,000 baht annually, then you don't owe any taxes.

Par. 3.2. If your interest income is less than 20,000 baht , then you have the option of having the tax deducted at the source (by the bank) at a tax rate of 15%. If your interest income is over 20,000, then you don't have that option. It must be included in your tax return. (note, regardless of the interest earned amount, you must pay tax on all interest income unless your total income for the year falls below 150,000 baht which is the max tax exempt amount). Thus, people such as retired persons can claim back any taxes paid since they didn't earn more than 150,000 baht annually in Thailand.

Therefore, both residents and non-residents of Thailand must pay taxes on interest income only if the total annual income earned from a Thailand source is more than 150,000 baht.

[AyG]

I read this link posted by AyG. I don't know where the 30,000 personal tax allowance came from. Did you mean 20,000?

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

You probably need a new pair of glasses. Look for "Personal Allowance", "Single Taxpayer". It's 30,000 baht. It's in the section "Allowances (Exemptions) allowed for the calculation of PIT".

[scoutman360]

I read this link posted by AyG. I don't know where the 30,000 personal tax allowance came from. Did you mean 20,000?

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

You probably need a new pair of glasses. Look for "Personal Allowance", "Single Taxpayer". It's 30,000 baht. It's in the section "Allowances (Exemptions) allowed for the calculation of PIT".

Got it. Thanks. Just reading a little slower is probably all I need to do.

[KittenKong]

The first 150,00k of income is tax-exempt, therefore it seems entirely legal and possible for someone with no other taxable income to have several tax-free accounts.

I have had more than 20,000B tax on interest repaid to me in some years, so I suppose this is indeed the case.

Edited December 26, 2015 by KittenKong