Thai RMF contribution every year or every other year?

[Monomial]

So I was made redundant at the beginning of the year and I haven't found work yet. I have zero income for this year. 3 years ago I started an RMF, and have made 3 annual contributions to it. This year, since I have no income, I would rather not pay into it. The question is, do I have to?

 

In various places I have read that if you want to claim exempt status when you withdraw from an RMF after age 55, you must pay in 5000 baht at least every OTHER year for 5 years, but in at least as many places I have read that you must pay at least 5000 baht EVERY year for the first 5 years.

 

Which one is it? Every other year, or every year?

 

Does anyone have a definitive answer? I'm not even sure I trust English translations on this. It is too easy to get a detail like this wrong, and the difference could mean a substantial penalty. I'd really rather not put in any money this year if I am not forced to.

 

Advice is appreciated.

 

 

[dinga]

While I could offer my understanding of the requirements, my advice is to not rely on the collective 'wisdom' of any forum, but go get the correct and definitive information from the horse's mouth  ie.  local office of the Revenue Department.  

 

RMF rules are indeed not straight-forward and in my (painful) experience, advice from others (including the Bank who sold me a RMF product, promotional brochures and - as you note - inaccurate english translations) proved to be worth little. 

 

Getting it wrong can be a very expensive lesson - repayment of any tax benefits; tax payable on any capital gain and interest penalties.

[fletchsmile]

My understanding is that the basic rule is not less than THB 5,000  per year in your case. If you don't pay the THB 5,000 then you start getting hit with tax penalties, so it really is in your interest to pay as the penalties would likely outweigh a simple 5k

 

I believe when someone says every other year then they are trying to take account of the fact that you can take a contribution holiday for no more than one consecutive year. I'm not sure to be honest how many times you could take a contribution holiday.

 

As dinga says, finding definitive information isn't great, particularly in English. It tends to cover just the very basics when selling to people and not the details like this.

 

It does crops up frequently in Thai language legislation, which I'd use to support the every year e.g.

 

http://www.rd.go.th/publish/47737.0.html

 

http://www.rd.go.th/ratchaburi/fileadmin/templates/ratchaburi/user_upload/new160858.doc

 

Perhaps if you could share the links that you've read - particularly for every 2 years.

 

Cheers

Fletch :)

Edited December 19, 2016 by fletchsmile

[dinga]

1 hour ago, fletchsmile said:

My understanding is that the basic rule is not less than THB 5,000  per year in your case. If you don't pay the THB 5,000 then you start getting hit with tax penalties, so it really is in your interest to pay as the penalties would likely outweigh a simple 5k

 

I believe when someone says every other year then they are trying to take account of the fact that you can take a contribution holiday for no more than one consecutive year. I'm not sure to be honest how many times you could take a contribution holiday.

 

As dinga says, finding definitive information isn't great, particularly in English. It tends to cover just the very basics when selling to people and not the details like this.

 

It does crops up frequently in Thai language legislation, which I'd use to support the every year e.g.

 

http://www.rd.go.th/publish/47737.0.html

 

http://www.rd.go.th/ratchaburi/fileadmin/templates/ratchaburi/user_upload/new160858.doc

 

Perhaps if you could share the links that you've read - particularly for every 2 years.

 

Cheers

Fletch :)

555 -  agree with Fletch but can't help myself.......another caution relates to the RMF requirement concerning anniversary years (yearly investment in LTF references calendar years; while RMF is anniversary years).  Saw something last week that says the RMF requirement to invest over 5 years means that investments must be made within 12 months of the previous one(s)  eg.   if an RMF investment is made in (say) 1 July 2014, the 2015 investment must be made on/before 30 June 2015.  If the investment is made (say) in August 2015 the consecutive year requirement is breached.  

 

RMF is NOT straight forward like LTF

[fletchsmile]

1 hour ago, dinga said:

555 -  agree with Fletch but can't help myself.......another caution relates to the RMF requirement concerning anniversary years (yearly investment in LTF references calendar years; while RMF is anniversary years).  Saw something last week that says the RMF requirement to invest over 5 years means that investments must be made within 12 months of the previous one(s)  eg.   if an RMF investment is made in (say) 1 July 2014, the 2015 investment must be made on/before 30 June 2015.  If the investment is made (say) in August 2015 the consecutive year requirement is breached.  

 

RMF is NOT straight forward like LTF

Yes I've seen that as well that it must be made within 12 months of the previous one(s) not just calendar years.

 

My understanding though is that if you have multiple funds then it is the total that must equal 5k. So if you don't want to get caught out on the dates maybe spread them over the year. I can imagine someone forgetting and then a holiday crops up on the day you want to invest - that's if you remember last minute LOL

 

Definitely not as straight forward as LTFs. This minimum 5k rule seems pointless as well - struggle to see any logic in it at all - though I do remember where we are LOL

Edited December 19, 2016 by fletchsmile