Capital Inflow Tax

[chocky]

Don't believe everything you read in a newspaper. Don't worry, they're not taking anything out of your money transfers. Do you guys worry about the world spinning slower too?

So you mean that BOT just posted this on their website just for fun?

http://www.bot.or.th/bothomepage/General/P.../Eng/n5149e.htm

so who does know what the real answere is cus im more less in the know than when i started to read all this ??????????????????????

[animatic]

The operative words are 'Capital and 'Speculation'.

The time frame, one year, for withholding, without interest,

is very arbitrary, unrealistic, and will likely change.

It's not tax, but they do seem to think it can be held,

and then used for public good.

Except people will NOT bring in short term funds,

and will aim the funds at goods and services.

The public gain angle will dry up fast

Three months, would not be too ubsurd.

But it is still a less than stellar responce to the problem.

But there HAS been a currency speculation problem, and it IS hurting us all.

It is just a classic over-reaction by BOT,

shortly to be modified by a classic re-thinking

after many other voices are heard LOUDLY.

There are longer term investment and business operations loopholes.

Stated above. More will be implemented. They won't have a choice.

The definition of capital is anything over 20,000USD.

But if you can prove you are investing in something real,

then the money stays here and doesn't flit in and out.

But it does say after a longer term you CAN repatriate funds.

That is their target. Fast cash transactions for proifit.

Not longer term investment.

Basically KEEP YOUR RECIEPTS!!

I would guess then banks are already thinking of making up forms

for bringing in long term investment funds, such as houses.

Similar to the T3 device.

If not the hue and cry will get that happening fast.

I don't neccesarily blame the generals, but the general

lack of international knowledge of the BOT upper staff.

Blocking investment is not their aim,

nor is cutting investment down by 30% for a year,

till the money is freed up.

No matter how we panic, they CAN'T be that dumb...

Their friends make too much money for that,

by bringing in investments for the long term.

[Arkady]

Looks like I'm hitting some bad luck here!!!!

I'm not in Thailand now, but will arrive this coming Friday. On Monday (yesterday), I wired $45,000 into my Bangkok bank account (it generally takes 1-2 business days for the wire transfer to come through) in order to decorate and furnish my new condo. The news of the new regulation was announce late yesterday.

Can anyone clarify the following?

1. Will the fund I transferred be subject to withholding, or would utilizing the fund to decorate my condo (buying goods & services) enough for a waiver since the money will never go out of Thailand?

2. If not subject to withholding, does anyone know what I need to do to prove it to the bank?

3. If subject to withholding, does anyone know whether the 30% withholding rule applies to the entire $45K, or to the amount that is above $20K (i.e. the $25K)?

Thanks for any clarification.

So far it looks as if 30% will be withheld from the whole amount if that is more than $20,000. This might be clarified further. The $20,000 limit was not mentioned in the BoT's press release.

They have really shot themselves in the foot this time. None of them understand how capital markets work but they are pretending for face reasons they are happy with what they have done to the stock market. If they don't back down, it will not be short term as they say. Foreign institutions can't easily invest in markets with silly rules like this. Investment is already slowing big time and now Thai companies will have a really hard time raising any funds for new investment.

[bendix]

animatic, i love how you always post in free-style verse.

very poetic.

[d44]

Yesterday, just before the announcement our HQ initiated a EUR 40,000 SWIFT with remark "prepayment invoices".

Arrived today at a rate of 46.8 and change. Nothing withheld.

[bendix]

d44, please please please. You're a newbie and you don't understand ThaiVisa.

Members like to have a panic attack and rant and rave for a while, thinking the entire country is against them. Please don't ruin it by posting sensible examples of the world not having changed at all - it's not in the spirit of the forum.

[bkkandrew]

This entire thread is riddled with over-reaction, crass generalisations and ill-informed panic.

Hmmm. How would you describe the biggest crash of the Stock Exchange of Thailand in its entire history?

[PuaSai]

I'd assume it's a daily limit (but it could simply be a limit per transaction, so maybe you could bring in $100k in 5 tickets on one day). Bear in mind that the BOT is trying to stop institutional money flows - the millions being shifted in the blink of an eye. For a bank to try and split $10m into 500 separate 20k tickets to get round the law would simply be impractical (transaction costs), so there doesn't need to be a time period on each deal.

Personally I think it's a foolish move which, on top of recent political events, will only do harm to Thailand's capital markets. Trying to manipulate the FX market, whether by naked currency intervention or through short-term capital controls, rarely ends up doing the job it was designed to do. The fact as well that it is primarily a USD problem rather than a THB one makes such measures even more mind-boggling.

Shame I'm still long Thai equities, but don't want to sell with the maddening horde. Might even be worth buying more after the initial sell-off in anticipation that it will be over-sold.

It may be here in this thread, but I'd ;ike to ask. Where can you invest in Thai equities? Is there a link available? Any suggested ones?

Thanks

[PuaSai]

d44, please please please. You're a newbie and you don't understand ThaiVisa.

Members like to have a panic attack and rant and rave for a while, thinking the entire country is against them. Please don't ruin it by posting sensible examples of the world not having changed at all - it's not in the spirit of the forum.

LOL Thats pretty funny. I actually get pretty depressed sometimes when I read some of the posts. Its like watching a snowball roll down a hill getting bigger and bigger... Or is it all a ploy to keep new people from moving to Thailand and enjoying the good life there ?!?!? LOL

[taxexile]

and beyond, people who are disconnected from reality, because they were raised within thai high society.

It's the old guard, for whom Thailand is really the center of universe. They have missed the copernic revolution that occured a few hundred years ago !

At home, you are served like a king. People obey, not because you are brillant, or wealthy (it helps however), but just because you... are.

cclub , can you try and keep your undergraduate prejudices of envy locked up behind the doors of the lancashire back to back , where they probably emanated , and where they surely belong.

[CRUNCHER]

d44, please please please. You're a newbie and you don't understand ThaiVisa.

Members like to have a panic attack and rant and rave for a while, thinking the entire country is against them. Please don't ruin it by posting sensible examples of the world not having changed at all - it's not in the spirit of the forum.

Quite right bendix. I think this measure was instigated by the Immigration Department so that farang could have something to rant about other than the new visa requirements.

[bendix]

This entire thread is riddled with over-reaction, crass generalisations and ill-informed panic.

Hmmm. How would you describe the biggest crash of the Stock Exchange of Thailand in its entire history?

A buying opportunity, the same as every other stockmarket crash in history.

[anon467367354]

and beyond, people who are disconnected from reality, because they were raised within thai high society.

It's the old guard, for whom Thailand is really the center of universe. They have missed the copernic revolution that occured a few hundred years ago !

At home, you are served like a king. People obey, not because you are brillant, or wealthy (it helps however), but just because you... are.

cclub , can you try and keep your undergraduate prejudices of envy locked up behind the doors of the lancashire back to back , where they probably emanated , and where they surely belong.

Thank you Taxexile, I couldn't have said it better, brillant!

[Sturbuc]

so what implications is there to me sending 10000 baht for my girlfriend to pay for her room and living.

Send B14300.

Open a savings-account with your bank and give the atm-card to your girlfriend (some banks do have only ATM-Cards but bank-books for savings).

-> Money transfer for free and quick within 1 day.

-> take money in Thailand might cause some expenses (my bank: 3 times feree within 12 months).

-> as the account is on your name so view the local tax-regulations (might be not to much income..)

Edited December 19, 2006 by Sturbuc

[Choscura]

In order to regulate foreign short-term capital inflows, several countries have imposed reserve requirements on such inflows during critical times. The BOT views that the present situation warrants the introduction of such measure to prevent speculative pressure on the Thai baht. The BOT will closely monitor and assess the impact of this measure.

which countries? it would be so nice if they provided a list. it sounds like something only a moderately rich country would do, which rules out a few.

[Rdrokit]

Wow, talking about "opening a can of worms". I think we will have to wait a few days to sort everything out. We have asked all the questions, now we have to wait for all the answers.

[LaoPo]

"Capital Inflow Tax, final kill for exporters...?"

I would think this is a black day for Thailands' economical future and therefore its people.

Everyone thought Thaksin was bad for Thailand.....but the Junta/BOT/Government in place have moved the country into a black economical period which makes the Thaksin-days look like bright sunshine.

They seem to forget they are just babies in comparison with the enormous worldwide Power-Giants moving around the earth on a daily basis with their huge assets/money/stocks.

Foreign investors/financial institutions/buyers will 'en masse' leave Thailand for the years to come with these stupid rules....and Yes, the Thai exporters will suffer dramatically (and therefore the Thai people).

India, China, Vietnam, Singapore, amongst others, are laughing about such stupidity.

Thailand has become (even more) an economical Banana-Republic, sorry, Kingdom

LaoPo

[Bruce1]

Its just one more reason why I won't be bringing my money into Thailand any time soon. Renting is sounding better than ever. Why would you buy anything permanent in this place?

[Foggy Bottom]

Its just one more reason why I won't be bringing my money into Thailand any time soon. Renting is sounding better than ever. Why would you buy anything permanent in this place?

Yes - if I had the option to do it in my own name without having to perform pantomimes and use third-party names.

The alternative to this nonsense missed by the Junta and BoT was to open up the property market to foreigners resident IN the kingdom - it's pulled the UK out of more than one recession or sticky FX situation in the last 30 years. It could do the same for Thailand.

However, remember the WHY of this happening - the Baht is too STRONG against the greenback was the justification - that means either -

A - too many people want Baht (pushing up its value), or

B - not enough people want dollars (pushing down the dollars' value)

(.... I notice no-one has yet wondered if it Thaksin moving his Temasek money about strategically that started the current Baht rise - just as no-one seems to remember his comment about why he sold Shin Corp = "I'm not telling you at this time but in time you will see why I did it")

The US trade deficit has been high for years - you can only buy more than you sell for so long before your currency goes tits up - exactly as is happening in the US now.

Yet, the Baht remains weakish against the Pound (I remember when it was around THB 40 = GBP 1 before '97) although it is slowly strengthening again after weakining in Q3 this year.

Once again the famous short-term-only memory of the Thai spouting Buddha's "live for today, tomorrow might never come" is causing them to forget thier own history and to react for exceeding short term benefit and long term harm.

If this helps in calming property prices, or even reducing them, then I'll be happy to watch the repossessions and unsellable list build - more choice for when I decide to buy ;-)

Gaz

[Big Guy]

Its not the Baht that is strong at the moment, it is still sitting relatively stable against most other currencies, the problem is that the $US has been grossly overvalued for quite some time and at present is receeding to a more sustainable level. The baht is caught up in this as the US is one of their most important trading partners so in effect is revalueing the baht at the same time.

What we want to hope for is that with the governments intervention the baht falls so then all us persons with foreign reserves and incomes become better off by default.

[kenk3z]

The first thing that occurs to me is that the retrieval of that 30% held funds is going to be roughly equivalent to trying to get a security deposit back from a Thai landlord. They're going to pull out rules and reasons that you can't get it back. They have a year to make them up.

kenk3z

[samuijack]

This is a measure the treasuary department has come up with in order to reduce the value of the baht and to assist exporters against the rising value of the baht. Thailand is the worlds largest export of rice, for instance. If the cost to the importer was to rise 10% it would have a big effect on exports. Add to this the other exports, and you have a big problem for Thai exporters.

[DrDweeb]

I had intended to bring in the dollar equivalent of 800,000 Bt for retirement purposes, but maybe now better to do a wire transfer from USA bank in THB instead of dollars.

Does anyone know if you take a beating converting USD to THB in USA, before transferring funds to Thailand?

It will depend on the bank. ABN Amro hit us for about 3.5 baht per dollar, exchanging at 35.5 back when the rate was 39. And that even though I specified I wanted dollars transferred, not baht.

Most National banks separate from government. Has the perosnal or structure of the BOT changed ?

Just curious.

Dweeb

[gdhm]

Hi,

I am NO expert at understanding all this Finance jargon but I have tried my best. Please forgive me if I have still missed something and humour me.

IF I am following this thread correctly am I right is saying that when I sell my Spanish home for around 140,000 EUROS nett and I wish to transfer proceeds directly into my Bangkok Bank Bank Savings account so I can:

1) look around and buy a house for my Thai wife and Thai stepson

2) Buy a car

3) Invest most of the rest in one of the bank deposit accounts

4) use some to buy furniture and living expenses cover my Retirement Visa

THAT if I try transferring all the monies in ONE transaction into my Bank Saving account from Spain that my Thai Bank will withhold 42,000 Euros of it for year, make me beg for its release after a year and NO interest will be paid to me on that withheld money whilst they use it.

IF my understanding IS correct how is that much different from stealing and returning your money after a year (when they get round to the claim, paperwork etc.)? Not only that but the banks use our money interest free and WE lose interest we would have earned.

So what is the way to meet MY goals please without incurring the withholding 30%. Do I need to

send the money over every 2 days in under 20,000USD dribs and drabs paying multiple SWIFT charges and commission to Bangkok bank on each transfer in. If so WHAT a JOKE.

Hopefully someone can confirm, deny and confirm the best solution to my situation to get monies here to buy my house and car for my family.

Kind Regards

Dave

[aussiecollin]

so what implications is there to me sending 10000 baht for my girlfriend to pay for her room and living.

Send B14300.

Yes, that gives her a 10 baht raise.

[mitrapaap]

What about those on a pension extension who bring in their 800,000bt for immigration purposes?

Transfer twice 400,000 and you are below the limit.

Reading all the post it looks like panicking is easier than thinking.

[aznyron]

So they will keep 30% right off the top and those of us who have it coming in as a service will also have to pay another 30% in taxes so it will be a combined amount of 60% if I understand this right. So that means for every 40,000 Baht you earn you will only get 16,000 Baht then pay your own expenses you will have enough to buy a Pepsi.

Yea Thailand is much better under the new ruling party. I think there jealousy of Thaksin needs to stop already when will there undirected anger subside.

Stop panicking this does not apply to farlong living in thailand it to slow down the speculators buying thai baht just go to your bank transfer your funds to your thai bank acount and every thing is normal this is good news now you will get the fair market for your brit pound or USD I was panicking last week now I am happy I might get to see 40 to 1 again (USD) if you want my opinion I think the scam is now ready to spring they will dump all the USD & Brit pounds back on the market to buy back the thai baht and get 40 or maybe more for 1 usd that is 12 1/2% winfall profit in just 8 months if your smart just transfer enough to pay your bills and few coin to spend on frilouis things like (_i_) and maybe by march we will be getting 50 to 1 usd LOL I keep dreaming hope it comes true

[lopburi3]

TV5 reports meeting just completed and order to be rescinded.

[richard10365]

While this is definitly bad for the big spenders, there are some of us living off pensions of less than $20,000 a year. Although this is not a lot of money in the USA, here it is quite a bit.

For now, anything that gives me more baht for my dollar is a good thing (for me). So far, that's what it's doing. If the dollar/baht exchange rate goes $1=40 baht then I make more money. The exchange rate from last week is around 5000 baht less for me than it was when it was around baht 40 to the dollar.

I do understand the frustrations that some of you are going through. If I wanted to bring $20,000/year in Thailand and was effected by this new rule I would be upset as well. I hope in the long run things work out for all of us.

[Badbanker]

Way to many kneejerk reactions!   The Bank of Thailand is just trying to stall another 1997 situation in which speculators beat up the baht so much that the Central Bank (read Chavalit) had to defend the Baht so their illicit personal saving did not devalue to much.

The situation we now face is a bit different and I believe it is temporary, still some action is needed to stop Singaporean Pirate Funds from hurting our export business!

I have 5 Thai Baht bank accounts in Bangkok and I am at liberty to transfer 19,999 baht to each one and not be touched by this problem.

A Really Bad Banker

This system in place is not going to hurt any of us but it will stop speculators from in reality beating up our personal Baht saving and give a nice 40 to one the ideal

So they will keep 30% right off the top and those of us who have it coming in as a service will also have to pay another 30% in taxes so it will be a combined amount of 60% if I understand this right. So that means for every 40,000 Baht you earn you will only get 16,000 Baht then pay your own expenses you will have enough to buy a Pepsi.

Yea Thailand is much better under the new ruling party. I think there jealousy of Thaksin needs to stop already when will there undirected anger subside.

Stop panicking this does not apply to farlong living in thailand it to slow down the speculators buying thai baht just go to your bank transfer your funds to your thai bank acount and every thing is normal this is good news now you will get the fair market for your brit pound or USD I was panicking last week now I am happy I might get to see 40 to 1 again (USD) if you want my opinion I think the scam is now ready to spring they will dump all the USD & Brit pounds back on the market to buy back the thai baht and get 40 or maybe more for 1 usd that is 12 1/2% winfall profit in just 8 months if your smart just transfer enough to pay your bills and few coin to spend on frilouis things like (_i_) and maybe by march we will be getting 50 to 1 usd LOL I keep dreaming hope it comes true