Are we required to file income tax return if bank interest has been earned?

[hyperdimension]

Standard Chartered told me to get a Thai Tax ID otherwise they will start to withhold tax on interest that I earn. So now I have a Tax ID.

However the total bank interest I earned in the past financial year is within the tax-exempt income bracket (under 150,000 THB).

Am I required by law to file a tax return, stating my total interest income, even though I would not need to pay any tax?

It would be quite a pain to go through a year's worth of statements of each of my bank accounts and add up the interest. The low-interest bearing transactional accounts would be quite a waste of time, e.g. with maybe 1 baht or so of interest deposited each month. If I didn't include them in an income statement it would feel like fraud.

[orientalist]

If you are in the country more than 180 days in the year and have income more than 30,000 baht you are supposed to file a tax return. Those on retirement visas generally don't bother, unless they want to reclaim the 15% tax withheld on their fixed deposit accounts. The bank can give you a tax withholding certificate for that.

See this and other recent topics: http://www.thaivisa.com/forum/topic/899468-penalty-for-not-submitting-thai-tax-return-if-no-tax-to-pay/

[akentryan]

I would add that once you have the statement ftrom the bank the revenue department is very helpful and will file the form for you and mail you a check if you have a refund comiing. Only takes 10 days or so. and in my case the 27,000 baht refund buys a lot of beer

[orientalist]

Yes, the front-office people are very helpful. But you should be aware that the back-office inspectors might become suspicious that you have other income that should be declared, such as a pension. See this excellent post:

http://www.thaivisa.com/forum/topic/893298-thai-taxes-guidelines-2016/#entry10404459

Edited March 25, 2016 by orientalist

[hyperdimension]

If you are in the country more than 180 days in the year and have income more than 30,000 baht you are supposed to file a tax return.

So does that mean that if my personal income (including the bank interest) is under 30k THB, there is no legal obligation to file a tax return, even though I have a tax ID?

[orientalist]

Yes. If your annual income is less than 30K, no need to file a return and no need for a tax ID. The banks withhold 15% tax on most bank accounts (but not ordinary savings accounts) regardless of whether you have a tax ID or not. I assume Standard Chartered told you to get an ID so you could ask for a refund. You can avoid all this by putting your money in a tax-free account, such as Thanachart's Ultra Savings account.

But now the Revenue Dept has you on their books they will probably send you a tax return form every year.

[hyperdimension]

Yes. If your annual income is less than 30K, no need to file a return

Thank you. It saves me a lot of time if I don't have to do a tax return.

The banks withhold 15% tax on most bank accounts (but not ordinary savings accounts) regardless of whether you have a tax ID or not. I assume Standard Chartered told you to get an ID so you could ask for a refund. You can avoid all this by putting your money in a tax-free account, such as Thanachart's Ultra Savings account.

The letter that I received in August from Standard Chartered stated:

"Pursuant to the Revenue Code, the Bank is required to report and withhold tax on customer's interest income (on the amount of Savings interest that exceed THB20,000/year per customer.)

In order to comply with the regulation of the Revenue Code, kindly provide the Bank with your Thai taxpayer identification number within 30 days from the date of this letter.

Please note that without your Thai taxpayer identification number on file, the Bank reserves the right to start deducting 15% withhold tax on all deposit interest paid to you from 30 September 2015 onwards.

So from that I gather that they were not withholding any tax on my earned interest previously. I then went to get the Tax ID and showed it to them as requested. I've checked the latest interest payment that was made on 2015-12-16 and noticed that on the same day as the interest deposit, there was a subsequent withdrawal transaction with description "TAX INT. WITHHELD". Then on 2015-12-28 (12 days later) there was a deposit with description "REV.TAX INT.WITHHELD", which was a reversal to refund the previously withheld amount. I had never seen these two transactions before on previous statements, there was only ever the interest paid (assumedly without any withholding tax deducted).

So this seems contrary to your statements "The banks withhold 15% tax on most bank accounts" and "I assume Standard Chartered told you to get an ID so you could ask for a refund", because if they haven't been withholding any tax as it appears after all these years (since 2012), then there'd be nothing for me to claim.

Edited March 25, 2016 by hyperdimension

[orientalist]

To be more specific, the banks withhold 15% interest on fixed deposit accounts whether or not you have a tax ID (They never asked me for my tax ID). Normally they don't withhold tax on savings accounts unless the interest is over 20K a year. But at the miserable interest rates available, one would have to have a small fortune deposited to exceed 20K, so I doubt this would apply to many savers. Perhaps your bank just wants your tax ID in case you go over 20K. But Thai banks don't normally do this.

[hyperdimension]

To be more specific, the banks withhold 15% interest on fixed deposit accounts whether or not you have a tax ID (They never asked me for my tax ID).

OK that clears things up. My account is an eSaver account (which was paying almost 3% interest per year when I had first opened it, but now only 1.75%).

Perhaps your bank just wants your tax ID in case you go over 20K. But Thai banks don't normally do this.

Yes, that could be the case. It did seem strange that they had asked for my tax ID only recently and not years ago when I had deposited the large amounts and was earning good interest.

[orientalist]

I would add that once you have the statement ftrom the bank the revenue department is very helpful and will file the form for you and mail you a check if you have a refund comiing. Only takes 10 days or so. and in my case the 27,000 baht refund buys a lot of beer

Yeah, it's fast if you file your return in January, but you may wait several months if you file in March. This year I submitted my return mid-February and I'm still waiting.

[55Jay]

Interesting. Sure, maybe they were suggesting you get a TaxID so you could get a refund.

My bank took tax w/o my having a TaxID but they were helpful in telling me how to get one in order to file a tax refund return, which is what I did. Had I elected not to file the return, the Thai Gov would happily keep the money.

[TallGuyJohninBKK]

I'm in the same situation with Standard Chartered. Have a similar account as the OP.

For all the prior years I had it, SC never withheld any tax, and said they wouldn't as long as the interest earnings didn't exceed 20,000 baht in a year (which they're certainly not doing at today's rates).

Then some months back, got the same SC warning letter as the OP. Then a few months ago, SC finally started deducting the 15% from my monthly interest earnings for my one account with them.

Thus far, I haven't gone to request a Thai tax ID. I really keep fairly small amounts in interest-earning accounts here, in order to stay under the $10,000 U.S. FBAR foreign accounts reporting requirement that applies to U.S. citizens.

Basically, for the relatively small amount the 15% withholding amounts to per year, I'm inclined to let the government keep it vs. who knows what kind of headaches might eventually ensue from becoming part of the Thai tax registration system. If I don't have to deal with them, I'd just as soon NOT. I'm retired and have no other Thailand income other than the minimal Thai bank interest.