Adyudha Mee Tae Dai tax policy change

[inThailand]

There has been a change in the method tax is calculated on earned interest for multiple Krungsri Bank Mee Tae Dai saving accounts.

 

In the past, each MTD account earning 20,000B or more in interest per year was subject to a 15% tax. So the acceptable strategy was to open multiple accounts and insure none hit the 20k threshold, thus avoiding paying tax on all MTD accounts. With this policy change, you are now subject to the 15% tax, if the sum of all your MTB account's interest is 20k or more for the year.

 

This was disclosed when the new MTD interest rate became in effect on 3rd Oct. 

 

Efforts with the local branch, Province Exclusive and Bangkok Exclusive to understand when this policy takes affect and how it affects paying tax on this year's earned interest, have not been fruitful. Since the announcement is taking place in the last half of the year when tax is due on 30th Dec, from interested earned since 1st July, are we subject to this tax? Without advance notice? Does this policy just pertain to new accounts? Just to aliens? Do you close all accounts or keep one to avoid tax? There are more questions than answers.

 

Has anyone looked into this and can shed light on this issue?

 

And going forward, what are the other good options to get the best rate of return on a low risk product, a local savings account?

 

[chiang mai]

It comes as no surprise that they're now enforcing the limits across all accounts, it was merely laziness on their part that they weren't and they needed to comply with the tax laws by making that change. The tax laws state that the first 150,000 baht of income each year is tax free, those laws don't say you can keep resetting the counter to zero every time you get near to 20,000 baht!

 

Your option is to go with a fixed rate product where the tax can be reclaimed at the end of the tax year, rates aren't great but it is a safe way.

Edited October 14, 2016 by chiang mai

[meatboy]

at todays deposit rate's at around 2% you can fix more than 7,500,000bht.before you have to pay any tax.

[inThailand]

I visited the tax revenue office years ago to apply for a refund. To many questions and the request for home country tax info, detailed personal info, etc turned me off from pursuing this further. Would be interested in your experience and your situation (are you retired with no other income in Thailand)?

 

The Mee Tae Dai is probably the highest interest paying saving account plan out there, especially when tax could have been avoided. Yes, there are many fixed term and fund accounts where you are committed for a period of time, and respectively must pay 15% tax or have risk. MTD pays interest daily and you can withdraw your funds at any time and can be used as Marriage or Retirement visa requirements. I know of no other that is better. Even at its lowest rate now of 1.3% it still pays 2-3 times more than other savings accounts. Two to three years ago 3%+ was the rate of return.

[chiang mai]

2 minutes ago, inThailand said:

I visited the tax revenue office years ago to apply for a refund. To many questions and the request for home country tax info, detailed personal info, etc turned me off from pursuing this further. Would be interested in your experience and your situation (are you retired with no other income in Thailand)?

 

The Mee Tae Dai is probably the highest interest paying saving account plan out there, especially when tax could have been avoided. Yes, there are many fixed term and fund accounts where you are committed for a period of time, and respectively must pay 15% tax or have risk. MTD pays interest daily and you can withdraw your funds at any time and can be used as Marriage or Retirement visa requirements. I know of no other that is better. Even at its lowest rate now of 1.3% it still pays 2-3 times more than other savings accounts. Two to three years ago 3%+ was the rate of return.

 

Yes and yes. And it's very easy to do, as long as you live here for more than 6 months each year, under that figure you can't get registered.

[topt]

On ‎15‎/‎10‎/‎2016 at 9:35 AM, inThailand said:

I visited the tax revenue office years ago to apply for a refund. To many questions and the request for home country tax info, detailed personal info, etc turned me off from pursuing this further. Would be interested in your experience and your situation (are you retired with no other income in Thailand)?

 

The Mee Tae Dai is probably the highest interest paying saving account plan out there, especially when tax could have been avoided. Yes, there are many fixed term and fund accounts where you are committed for a period of time, and respectively must pay 15% tax or have risk. MTD pays interest daily and you can withdraw your funds at any time and can be used as Marriage or Retirement visa requirements. I know of no other that is better. Even at its lowest rate now of 1.3% it still pays 2-3 times more than other savings accounts. Two to three years ago 3%+ was the rate of return.

If you visit the pinned thread on savings interest I think you will find several accounts that pay more - L&H standard non fixed savings from memory is 1.6%.

As CM says above reclaiming tax is not that onerous and certainly when I first went through the process I did not have to provide any info  on my home country tax affairs at all - unless things have substantially changed since?

[chiang mai]

5 minutes ago, topt said:

If you visit the pinned thread on savings interest I think you will find several accounts that pay more - L&H standard non fixed savings from memory is 1.6%.

As CM says above reclaiming tax is not that onerous and certainly when I first went through the process I did not have to provide any info  on my home country tax affairs at all - unless things have substantially changed since?

 

They haven't really, except applicants may need to prove they are resident here for tax purposes and that means having a visa and entry stamps that prove they were resident here for more than 183 days in the tax year they're claiming against.

[Pib]

On 10/15/2016 at 7:48 AM, meatboy said:

at todays deposit rate's at around 2% you can fix more than 7,500,000bht.before you have to pay any tax.

True.  

 

But if a person's intent is to avoid the 15% tax from being withheld to begin with which in turn drives a need to file a tax return to get a refund of the withholding, at 1.3% which the MTD currently pays the trigger level of the 15% tax withholding would be just a little over Bt1.53M.

 

I"m now in that camp of much preferring just to avoid the need to file a return/refund request to get the withholding back---which I did for around 4 years when having my money in fixed term accounts (when they were paying significantly better interest than now days) that automatically withhold 15% regardless of investment amount. Although filing a refund request was pretty easy at my local tax office and waiting around 3 to 4 weeks for the refund check, I would prefer not to go that route considering interest rates for fixed term accounts are basically equally to or just a little higher than the MTD account.  Plus with the MTD I have easy access to the money at any time with no interest penalty for early withdrawal like fixed account have.   Nothing to hide in not filing a return...it's just I would prefer not have to file...prefer to keep it simple.   This year I will not have a need a file a refund request since with my MTD account no tax is withheld.

 

I'm glad this thread came up as I was thinking about opening a second MTD account to avoid a tax withholding since I was thinking about letting my current account climb above Bt1.5M which would have triggered a tax withholding driving the need to file for a refund.    But I won't be opening a second account now....I'll just keep my Thailand-based emergency and retirement extension money below Bt1.5M.

 

 

 

[Pib]

inThailand,

   In your opening post you said,  "This was disclosed when the new MTD interest rate became in effect on 3rd Oct."  

 

Can you be more specific as to where it was disclosed? Did you see it on their website?  At a a branch?   Just where?   I scanned their 3 Oct interest rate announcement for their products but didn't see any such disclosure.  Maybe I just missed it.

 

All I saw was their standard statement on the last page of:  "10. Exemptions of withholding tax on interest shall be in accordance with criteria of the Revenue Department."   And that statement applied to any/all of their products, not specifically the MTD.

 

3 Oct 16 Interest Rate Announcement
https://www.krungsri.com/bank/getmedia/50fdb570-d268-45ac-a80d-8398f3c17690/Deposit-Rates-03102016.aspx

 

 

 

 

 

[meatboy]

reclaiming tax witheld is easyer than you think,the wife does it for me.

at todays rates its not that good,but to earn that little bit extra our main accs.fixed term,paying interest monthly,that in turn goes into the tax free accs and earns a little bit more at the end of the yr.makes sense. 

[inThailand]

Guys, thanks for responding.

 

Attached is the official MTD rate change and underlined by the bank rep is the policy change.

I am going to the bank today for I still cannot get clarity on when this change takes effect.

 

Like many things here it didn't make logical sense that one could open multiple accounts to avoid the tax, but that was Their recommendation. So I did.

 

So where do you put your Thai money now? With the political and king situation fund accounts do not look any better, or any less risky. Fixed term accounts are not that attractive either. The idea of getting on the Thai IRS radar by getting a tax Id number and filing a refund is also not attractive, at least to me. I have nothing to hide, but dislike big brother mentality, ex FBAR reporting. 

 

[Ace of Pop]

reclaiming tax witheld is easyer than you think,the wife does it for me.
at todays rates its not that good,but to earn that little bit extra our main accs.fixed term,paying interest monthly,that in turn goes into the tax free accs and earns a little bit more at the end of the yr.makes sense. 

Your post is not full of waffle that I can't understand.My Wife gets the form Via BKK Bank ,fills it in,I sign it ,refund comes back eventually.Job Done.


Sent from my iPhone using Thaivisa Connect

[55Jay]

7 hours ago, inThailand said:

Guys, thanks for responding.

 

Attached is the official MTD rate change and underlined by the bank rep is the policy change.

I am going to the bank today for I still cannot get clarity on when this change takes effect.

 

Like many things here it didn't make logical sense that one could open multiple accounts to avoid the tax, but that was Their recommendation. So I did.

 

So where do you put your Thai money now? With the political and king situation fund accounts do not look any better, or any less risky. Fixed term accounts are not that attractive either. The idea of getting on the Thai IRS radar by getting a tax Id number and filing a refund is also not attractive, at least to me. I have nothing to hide, but dislike big brother mentality, ex FBAR reporting. 

 

Suppose it was merely a verbal/soft work around to begin with, and I can see why it might be a compliance issue they want to clean up.   It was my prime motivation for opening MTDs and have used the procedure a number of times to avoid having to file tax return - which would end up giving me the tax back anyway, so.....

 

Individually, at current rates, my MTDs would of slipped in under the wire on 31DEC16.  Combined, the INT accruals went over the line in August.  Shit. 

 

Thanks for starting this thread.  I'll follow up at my Krungsi branch and see what they have to say about the MTD Shuffle.

[Pib]

And the way that statement is worded it applies to any combination of Krungsri "savings" accounts, not just the MTD account.  So, if a person say had 2 (or more) Krungsri savings account with only one being a MTD account he would still need to take care in not going over Bt20K in total interest earned "if wanting to avoid the withholding tax" for whatever reason.

[55Jay]

1 minute ago, Pib said:

And the way that statement is worded it applies to any combination of Krungsri "savings" accounts, not just the MTD account.  So, if a person say had 2 (or more) Krungsri savings account with only one being a MTD account he would still need to take care in not going over Bt20K in total interest earned "if wanting to avoid the withholding tax" for whatever reason.

Right. 

 

I'm hoping this was just his branch manager, not a company-wide directive.

 

Hey, do you still have the link handy for the relevant section of the US/Thai Tax Treaty?  You posted it in a tax thread a long time ago, and I ended up having to pull it out during my visit(s) to the main tax office up here a few years ago - you might remember I had a hell of a time with my first and only tax return.  Like to be armed and dangerous if I have to file on the Krungsi accts.  Will bookmark the page this time too.

[inThailand]

Guys, went to my local Adyudha bank branch in Phuket. 

 

Their suggestion to avoid tax of 15% this year and going forward is to close all MTD accounts before the end of the year and open one new one and before earned interest hits the threshold of 20k close it and then open one again. Crazy! But for me, it's a more attractive option then getting a tax Id number and getting on the Thai IRS radar screen.

 

Btw...SCB bank has better fixed term savings accounts than before 3, 4 and 9 months at 1.3, 1.4 and 1.5% respectively.  But of couse there is the mandatory tax of 15% on each. So the Adyudha MTD savings account still is more attractive.

 

Is anyone buying GBP now?

 

[55Jay]

On 10/22/2016 at 5:23 AM, inThailand said:

Guys, went to my local Adyudha bank branch in Phuket. 

 

Their suggestion to avoid tax of 15% this year and going forward is to close all MTD accounts before the end of the year and open one new one and before earned interest hits the threshold of 20k close it and then open one again. Crazy! But for me, it's a more attractive option then getting a tax Id number and getting on the Thai IRS radar screen.

 

Btw...SCB bank has better fixed term savings accounts than before 3, 4 and 9 months at 1.3, 1.4 and 1.5% respectively.  But of couse there is the mandatory tax of 15% on each. So the Adyudha MTD savings account still is more attractive.

 

Is anyone buying GBP now?

 

I haven't been to my branch yet, but logged in this morning, queried both MTD accounts from 1JULY to now, and see no tax events, retroactive or otherwise.  With a potential combined interest rule, I would of gone over 20,000 interest paid in August. 

 

If your branch told you they would not allow you to close MTD accounts to avoid the tax rules, they appear to be contradicting themselves by now suggesting you close your account(s) before the end of this CY.....to avoid taxation.   You could do that at any point during the year, which is precisely what I (and others) have done in the past, based on the bank's own suggestion to do so. 

 

Your new comment, however, leaves a niggling idea they could do an end of the year tax sweep on all accounts?  Dunno.  Still plan to visit my branch and pulse them about this.

[yabbra]

I just need a quick clarification regarding this tax issue. If the MTD accounts go over the 20k limit during the course of the year, is the 15% tax deducted from any interest earned over the 20k or from the entire amount of interest earned in the year?

Cheers

[Pib]

1 hour ago, yabbra said:

I just need a quick clarification regarding this tax issue. If the MTD accounts go over the 20k limit during the course of the year, is the 15% tax deducted from any interest earned over the 20k or from the entire amount of interest earned in the year?

Cheers

From the entire amount.

[chiang mai]

Filing a tax return (if you're resident here) will allow you to reclaim much of that, potentially, assuming you have no other Thai based income.

[inThailand]

I can confirm, Ayudhya Mee Tai Dai accounts will automatically deduct 15% tax monthly from each MTD account when the sum of the interest earned across all MTD accounts exceed 20,000B for the calender year. MTD is currently paying 1.30%, after tax 1.105%.

Has anyone found a better interest paying account?

[Baerboxer]

On 10/15/2016 at 9:35 AM, inThailand said:

I visited the tax revenue office years ago to apply for a refund. To many questions and the request for home country tax info, detailed personal info, etc turned me off from pursuing this further. Would be interested in your experience and your situation (are you retired with no other income in Thailand)?

 

The Mee Tae Dai is probably the highest interest paying saving account plan out there, especially when tax could have been avoided. Yes, there are many fixed term and fund accounts where you are committed for a period of time, and respectively must pay 15% tax or have risk. MTD pays interest daily and you can withdraw your funds at any time and can be used as Marriage or Retirement visa requirements. I know of no other that is better. Even at its lowest rate now of 1.3% it still pays 2-3 times more than other savings accounts. Two to three years ago 3%+ was the rate of return.

 

I registered at our local tax office. They were very professional, pleasant and helpful. Filled in the form, copy passport, confirmed retired with only bank interest income in Thailand. They wanted certified bank letter / statement showing all interest payments to all accounts and copies of the actual pages of the bank books showing the interest being received. About 30 days later received a cheque in the post refunding the amount of tax. Have done that for several years now.

 

If you have off shore accounts and accounts in your home country, the banks may well ask you to prove tax residency. Even if your home country tax authority accepts you are non resident, the banks can, will and do ask for proof. If you say you are resident in Thailand they will ask for Thai tax reference number. If you can't provide that, they may decide not to accept Thailand as your tax residence. 

 

 

[SantiSuk]

Yes - it's easy enough to file a return and get the tax deductions refunded.

 

If you are reclaiming a lot (by which I mean so much that you won't get all your deducted tax back, or something like that level) it may trigger further enquiries into your tax affairs. It did for me in the one year that my deducted tax levels were high. Was invited in to discuss my tax affairs (and those of my wife!) at the regional Tax Investigation office. No problem for me as I'm squeaky clean and know the rules reasonably well, but may be a consideration for others.

[inThailand]

22 minutes ago, SantiSuk said:

Yes - it's easy enough to file a return and get the tax deductions refunded.

 

If you are reclaiming a lot (by which I mean so much that you won't get all your deducted tax back, or something like that level) it may trigger further enquiries into your tax affairs. It did for me in the one year that my deducted tax levels were high. Was invited in to discuss my tax affairs (and those of my wife!) at the regional Tax Investigation office. No problem for me as I'm squeaky clean and know the rules reasonably well, but may be a consideration for others.

How do they calculate the refund amount? And what are the different thresholds?

[KittenKong]

34 minutes ago, Baerboxer said:

I registered at our local tax office. They were very professional, pleasant and helpful. Filled in the form, copy passport, confirmed retired with only bank interest income in Thailand. They wanted certified bank letter / statement showing all interest payments to all accounts and copies of the actual pages of the bank books showing the interest being received. About 30 days later received a cheque in the post refunding the amount of tax. Have done that for several years now.

 

I also reclaim my withholding tax every year but the local tax office (Jomtien) have always rejected any claim for tax paid on savings accounts interest and will only process claims for time deposits.

[inThailand]

1 minute ago, KittenKong said:

 

I also reclaim my withholding tax every year but the local tax office (Jomtien) have always rejected any claim for tax paid on savings accounts interest and will only process claims for time deposits.

Why?

[SantiSuk]

I have both fixed deposit accounts, a savings account that has restrictions on the number of withdrawals you can make in a month* and an "ordinary" account that operates like a current account with very little interest. All with Krungsri. The Ordinary Account has no tax deducted so I don't include that in my tax claim (but the gross probably figures n the calculation that determines whether I have hit any taxable threshold). Both the fixed and non-fixed accounts have tax deducted at 15% (idiosyncratically, not in the first few months of the year but then the backlog is caught up by increasing the rate in subsequent months) and I reclaim the tax on both types of account. 

 

I do not understand why you cannot reclaim tax you have suffered in Jomtien Kitten Kong. If I were you I would ask if there is someone at province level who speaks English that you can talk to. In Sisaket province my local amphur office completes a basic return for me when I take in my bank certificates and they ask a few other basic questions (I speak inremediate Thai, but I take my TW as they speak no English) before signing off on the return; it then gets sent to Sisaket provincial level. The first of 3 years that I completed a return an English speaker from province level phoned me, introduced herslef as someone who could help me on tax if I ever needed it and asked again for the certificates (by e-mail scan); second year that province lady asked me to come in and bring my original certificates, which is when I was directed to the office that said it was a Regional Tax Investigation office and she and a less friendly person "grilled me" in a reasonably friendly way - they gave up quickly when they knew I knew something about Thai tax  (being a retired Chartered Accountant I can look out for myself!) and said I could demonstrate that none of my UK income came to Thailand in the year it was earned. This year I only filed the return 3 weeks ago (missed the deadline and they sent me a letter encouraging me to file a return! It only cost me 200 baht, which I presumed to be a late filing penalty but maybe they will deduct further penalties when they write me a cheque. I have not yet been asked to go again to the province office so time will tell whether sleeping dogs will now lie down.

 

 

*Maybe a Mee Tai Dai account for all I know, but staff have never described it as such and it's just described as a savings account online

** Will answer your question InThailand - have to go out to dinner and wife is pestering me!

[KittenKong]

52 minutes ago, SantiSuk said:

I do not understand why you cannot reclaim tax you have suffered in Jomtien Kitten Kong.

 

I can, no problem at all. But only on time deposits. They always refused to include tax paid on savings account interest, and after a couple of years of that I just arranged my accounts better so that I have no such savings account tax to reclaim anyway (it was only ever a very small amount, and I only claimed it out of principle and because I was filing a claim for a much larger amount from the time deposits anyway so why not). The two banks involved also said that the refusal was normal and correct.

 

I continue to get full refunds for time deposit tax every year.

[KittenKong]

9 hours ago, inThailand said:

Why?

 

I dont really know for sure. See my explanation above.