Why is TAX being taken from my Krungsri Bank savings account?

Monkie Business · August 3, 2017

I have several saving bank accounts in my name with the Bank of Ayudhya ( Krungsri ) which I have held for several years , in the past when the interest on each account came near to the maximum amount of interest earned to keep under having to pay government tax , all the interest amounts earned were transferred to another savings account , that I use for daily living expenses , thus I never had to
pay any tax on any of the interest earned. This transferring of interest earned into one separate single bank account was the idea of the person who I deal with at the bank. Recently I decided to update my saving account passbooks and was surprised to see that on each account , a monthly amount had automatically been withdrawn from the bank passbook it was marked as TAX .

Before I go to the bank and question the person who I deal with , can any one explain whats going on and what I can do , to not pay any tax on my saving accounts as in the past .

Edited August 3, 2017 by Monkie Business

sanmyintmaung · August 3, 2017

scubascuba3 · August 3, 2017

I get 300 baht a year so i won't worry

Monkie Business · August 3, 2017

34 minutes ago, sanmyintmaung said:

thank you , I have read through the comments in that thread and it seems that there was no real solution I am a retired full time resident with a thai wife , and I don’t normally touch these MTD accounts . The MTD accounts offer easy access to the money so I’m not really interested in any money being tied up for a fixed term , and I do use one of my MTD accounts for my immigration visa extension application.

Now I’m wondering if there's an update about what others in a similar situation with MTD accounts , did to try and stop paying tax , and I wonder what the person who I deal with at Krungsri bank will recommend , when I talk to them.

Currently the amount of TAX being taken each month from each of my MTD accounts varies between 300 / 400 Baht

Not a lot I know , but its going to add up .

Edited August 3, 2017 by Monkie Business

worgeordie · August 3, 2017

Claim it back if you can be bothered,some fixed accounts you are not deducted tax,

regards worgeordie

Pib · August 3, 2017

Either get the aggregate of your Krungsri accounts below the amount which triggers the 15% tax withholding on interest earned or file a claim for the tax withholding refund with your local tax revenue office each year during the 1 Jan -31 Mar time frame.

If you don't want to reduce the amount and also don't want to file a refund claim each year then you are just letting the govt keep 15% of your total interest earned.

For about 4 years in a row when I had some fixed savings accounts that automatically withhold the 15% of interest earned regardless of amount earned, even amounts below Bt20k, I filed a refund claim each year and within 2 to 6 weeks it was fully refunded. It's not a hard process at all.

Monkie Business · August 3, 2017

2 hours ago, Pib said:

Either get the aggregate of your Krungsri accounts below the amount which triggers the 15% tax withholding on interest earned or file a claim for the tax withholding refund with your local tax revenue office each year during the 1 Jan -31 Mar time frame.

If you don't want to reduce the amount and also don't want to file a refund claim each year then you are just letting the govt keep 15% of your total interest earned.

For about 4 years in a row when I had some fixed savings accounts that automatically withhold the 15% of interest earned regardless of amount earned, even amounts below Bt20k, I filed a refund claim each year and within 2 to 6 weeks it was fully refunded. It's not a hard process at all.

Thank you Pib for your comment , Ive looked through many of your past excellent posts on this subject and think I may now have a better understanding of the situation.

This is what I think I should do , to claim tax back

I am retired and have no personal income generated in Thailand , only the interest from my Krungsri MTD standard savings accounts.

1. Go to my local personal income / revenue tax office with my passport and I have a yellow house book , and apply for a tax ID number, so I can claim the 15% withholding tax that is currently taken monthly from my bank accounts. ( Can I apply for a tax ID number any time ? )

2. Around January the 1st , go to my bank and ask for a certified form of tax paid on my savings accounts for the previous year.

3. Take the banks certified form of tax paid, to the tax office and ask advice on how to get a tax refund using Form Kor 10, Request of Refund of Tax Payment .

I am wondering if I have got this right , or missed some thing out ?

inThailand · August 3, 2017

MTD account is not a fixed saving account hence why immigration accepts it. It is the best savings account interest wise in Thailand with few restrictions.

As reported before, KS bank this year now totals up all your accounts and when the interest earned for the year exceeds 20,000B they deduct 15% tax every month from each account.

observer90210 · August 3, 2017

Does the specific type of residence status or visa have anything to do with the tax being deducted or not?

Edited August 3, 2017 by observer90210

inThailand · August 3, 2017

20 minutes ago, observer90210 said:

Does the specific type of residence status or visa have anything to do with the tax being deducted or not?

Why should it? All are taxed equally. Is there now a two tired tax system? One for Thais and one for falangs?

Edited August 3, 2017 by inThailand
fat fingers

observer90210 · August 3, 2017

7 minutes ago, inThailand said:

Why should it? All are taxed equally. Is there now a two tired tax system? One for Thais and one for falangs?

You are obviously unaware that many nations globally have revenue regulations that exempt non residents from tax in any form of deposits or interest, drawn from their respective banks.

Since Thai society practices dual pricing and overcharges farangs in certain situations, it seems more then legitimate to give bank deposit interest tax exemptions to farangs who pump in a lot of money in the Thai economy.

Edited August 3, 2017 by observer90210

inThailand · August 3, 2017

12 minutes ago, observer90210 said:

You are obviously unaware that many nations globally have revenue regulations that exempt non residents from tax in any form of deposits or interest, drawn from their respective banks.

Since Thai society practices dual pricing and overcharges farangs in certain situations, it seems more then legitimate to give bank deposit interest tax exemptions to farangs who pump in a lot of money in the Thai economy.

Name one country!

I am aware like most there is a no double tax law for most. That does not mean you don't pay tax here but your not doubled taxed or it can be deducted from your taxes back home.

Monkie Business · August 4, 2017

3 hours ago, inThailand said:

MTD account is not a fixed saving account hence why immigration accepts it. It is the best savings account interest wise in Thailand with few restrictions.

As reported before, KS bank this year now totals up all your accounts and when the interest earned for the year exceeds 20,000B they deduct 15% tax every month from each account.

As far as I know , as my MTD savings account has instant access to it and its in my name only , then immigration will accept it .

Monkie Business · August 4, 2017

I want to telephone a tax office , does any one know the correct Thai for - tax ID number

Pib · August 4, 2017

11 hours ago, Monkie Business said:

Thank you Pib for your comment , Ive looked through many of your past excellent posts on this subject and think I may now have a better understanding of the situation.

This is what I think I should do , to claim tax back

I am retired and have no personal income generated in Thailand , only the interest from my Krungsri MTD standard savings accounts.

1. Go to my local personal income / revenue tax office with my passport and I have a yellow house book , and apply for a tax ID number, so I can claim the 15% withholding tax that is currently taken monthly from my bank accounts. ( Can I apply for a tax ID number any time ? )

2. Around January the 1st , go to my bank and ask for a certified form of tax paid on my savings accounts for the previous year.

3. Take the banks certified form of tax paid, to the tax office and ask advice on how to get a tax refund using Form Kor 10, Request of Refund of Tax Payment .

I am wondering if I have got this right , or missed some thing out ?

That's pretty much it....you got it. You may not even have to make a separate, initial trip to get Tax ID number....I didn't. In fact they didn't even issue me a tax ID number until the second time I applied for a refund. The first time I filed they just used a tax ID of all zero's...but the second time they issued me my tax ID while filing.

And your tax office may require you to use the regular tax form to file for the refund, but only part of it is filled out. Every time I filed the reps in the tax office filed out 90% of the form for me....I pretty much just answered any questions they asked and filed out areas/signed where they told me. Easy.

inThailand · August 4, 2017

1 hour ago, Monkie Business said:

As far as I know , as my MTD savings account has instant access to it and its in my name only , then immigration will accept it .

Yup.. I know guys who use a MTD account to prove their 800K for a retirement visa. Its a saving account, paying daily interest, whose interest rate is tied to the Bank of Thailand.

Pib · August 4, 2017

4 minutes ago, inThailand said:

Yup.. I know guys who use a MTD account to prove their 800K for a retirement visa. Its a saving account, paying daily interest, whose interest rate is tied to the Bank of Thailand.

Specifically, interest is "calculated" daily and "paid" monthly.

And in a way, all interest rates (fixed savings, regular savings, loan rates, etc.,) used by banks are linked to Bank of Thailand rates....just like interest/loan rates in any country is linked to their central bank rates.

Me also have a Krungsri MTD account for several years now....works good....pays interest very similar to higher paying fixed savings account without the 15% withholding tax as long as you keep the balance below a level which would earn more than Bt20K in interest per year.....and I use the account for my annual extension of stay Bt800K requirement.

From Krungsri Bank website regarding MTD savings account.

Quote

The Bank shall calculate interests on a daily basis based on the remaining balance and the interests shall be paid on the banking day before the last banking day of each month (after withholding tax).

Monkie Business · August 4, 2017

18 minutes ago, Pib said:

Specifically, interest is "calculated" daily and "paid" monthly.

And in a way, all interest rates (fixed savings, regular savings, loan rates, etc.,) used by banks are linked to Bank of Thailand rates....just like interest/loan rates in any country is linked to their central bank rates.

Me also have a Krungsri MTD account for several years now....works good....pays interest very similar to higher paying fixed savings account without the 15% withholding tax as long as you keep the balance below a level which would earn more than Bt20K in interest per year.....and I use the account for my annual extension of stay Bt800K requirement.

From Krungsri Bank website regarding MTD savings account.

Hi Pib

Am I reading this right , the red part

Me also have a Krungsri MTD account for several years now....works good....pays interest very similar to higher paying fixed savings account without the 15% withholding tax as long as you keep the balance below a level which would earn more than Bt20K in interest per year.....and I use the account for my annual extension of stay Bt800K requirement.

So if

1. I withdraw money from each of my current MTD savings accounts , keeping that new balance below the amount which would earn more than Bt20K in interest per year .

2. Open new MTD saving accounts using the money withdrawn from original MTD savings accounts and then keep the balances of these new MTD savings accounts , also below the amount which would earn more than Bt20K in interest per year.

That would mean then all my MTD savings accounts balances are now all below the amount which would earn more than Bt20K in interest per year , and no tax on all my MTD savings would be taken .

Or have I missed some thing ?

hobobo · August 4, 2017

51 minutes ago, Pib said:

That's pretty much it....you got it. You may not even have to make a separate, initial trip to get Tax ID number....I didn't. In fact they didn't even issue me a tax ID number until the second time I applied for a refund. The first time I filed they just used a tax ID of all zero's...but the second time they issued me my tax ID while filing.

And your tax office may require you to use the regular tax form to file for the refund, but only part of it is filled out. Every time I filed the reps in the tax office filed out 90% of the form for me....I pretty much just answered any questions they asked and filed out areas/signed where they told me. Easy.

My Thai is extremely limited, do the reps at the tax office speak English?

Baerboxer · August 4, 2017

16 hours ago, Monkie Business said:

thank you , I have read through the comments in that thread and it seems that there was no real solution I am a retired full time resident with a thai wife , and I don’t normally touch these MTD accounts . The MTD accounts offer easy access to the money so I’m not really interested in any money being tied up for a fixed term , and I do use one of my MTD accounts for my immigration visa extension application.

Now I’m wondering if there's an update about what others in a similar situation with MTD accounts , did to try and stop paying tax , and I wonder what the person who I deal with at Krungsri bank will recommend , when I talk to them.

Currently the amount of TAX being taken each month from each of my MTD accounts varies between 300 / 400 Baht

Not a lot I know , but its going to add up .

Go and register at your local tax office. Take your wife with you, passport, her ID and house book, (think that's it).

I found our local office to be very professional, pleasant and helpful. You will get a Tax ID number, which is also helpful in convincing offshore and home country banks that you are indeed tax resident in Thailand.

You can confirm your only income in Thailand is the interest, and they will help your wife to fill the form in (unless you read Thai well of course or she already knows). You sign and hand in the completed form, and my office ask for a certified bank letter and statement detailing all the interest paid and tax deducted and also a copy of each bank book showing the transactions in and out.

They give you a receipt and usually about 30 days later you get a cheque through the post refunding the interest tax.

Rather than try and find machinations to avoid tax, you are better to be registered, provide the correct information and then get a refund. That way you have a tax history.

Baerboxer · August 4, 2017

32 minutes ago, hobobo said:

My Thai is extremely limited, do the reps at the tax office speak English?

At my tax office, some of the officers speak a little English. But I take my wife. They ask her, she asks me, et voila!

But to be fair, they showed her the first time very well and explained everything, Now she fills it, they check it and the supporting docs and I sign.

The office is always busy with people getting help with the forms and questions. Quite frankly, much more helpful than bank home!

inThailand · August 4, 2017

39 minutes ago, Monkie Business said:

Hi Pib

Am I reading this right , the red part

Me also have a Krungsri MTD account for several years now....works good....pays interest very similar to higher paying fixed savings account without the 15% withholding tax as long as you keep the balance below a level which would earn more than Bt20K in interest per year.....and I use the account for my annual extension of stay Bt800K requirement.

So if

1. I withdraw money from each of my current MTD savings accounts , keeping that new balance below the amount which would earn more than Bt20K in interest per year .

2. Open new MTD saving accounts using the money withdrawn from original MTD savings accounts and then keep the balances of these new MTD savings accounts , also below the amount which would earn more than Bt20K in interest per year.

That would mean then all my MTD savings accounts balances are now all below the amount which would earn more than Bt20K in interest per year , and no tax on all my MTD savings would be taken .

Or have I missed some thing ?

You avoid the 15% tax if the interest earned from all your KS bank accounts is less than 20K. In the past, you could open multiple accounts and avoid tax if each one earned less than 20K in interest.

Edited August 4, 2017 by inThailand
fat fingers

hobobo · August 4, 2017

13 minutes ago, Baerboxer said:

At my tax office, some of the officers speak a little English. But I take my wife. They ask her, she asks me, et voila!

But to be fair, they showed her the first time very well and explained everything, Now she fills it, they check it and the supporting docs and I sign.

The office is always busy with people getting help with the forms and questions. Quite frankly, much more helpful than bank home!

Thanks Baerboxer!

Pib · August 4, 2017

4 hours ago, Monkie Business said:

Hi Pib

Am I reading this right , the red part

Me also have a Krungsri MTD account for several years now....works good....pays interest very similar to higher paying fixed savings account without the 15% withholding tax as long as you keep the balance below a level which would earn more than Bt20K in interest per year.....and I use the account for my annual extension of stay Bt800K requirement.

So if

1. I withdraw money from each of my current MTD savings accounts , keeping that new balance below the amount which would earn more than Bt20K in interest per year .

2. Open new MTD saving accounts using the money withdrawn from original MTD savings accounts and then keep the balances of these new MTD savings accounts , also below the amount which would earn more than Bt20K in interest per year.

That would mean then all my MTD savings accounts balances are now all below the amount which would earn more than Bt20K in interest per year , and no tax on all my MTD savings would be taken .

Or have I missed some thing ?

Below cut and paste says from..."all customer's savings accounts is more than baht 20K per year..." which implies to me the bank would be keeping a running total (aggregate) of interest paid to you during the year regardless of how many savings account you opened.....1 or a 100 accounts.

I expect the bank has all of a person's accounts referenced/linked to their ID/passport number and/or name; therefore, all the accounts are linked for total interest earned during the year purposes.

Just because you close all your accounts mid year when they happened to almost reach Bt20K interest earned which would definitely trigger a tax withholding and then reopen new accounts with the full amounts from the old/closed accounts may not stop the "interest earned this year so far" tally the bank has on your since all your accounts would be referenced/linked to your ID/passport and/or name. If so, you would start getting hit with tax the first month you opened the new accounts.

And in above example where I said you closed your accounts "mid year" just before reaching Bt20K interest earned I can not say that the bank waits till you actually exceed Bt20K interest earned in a year "before" they start the 15% tax withholding. Maybe they then only withhold 15% of the next month's interest earned. Or maybe they do a catch-up tax withholding by hitting you with a 15% tax withholding for all the months up till mid year. I don't know the fine details of how they do that.

Knowing how governments like tax money I wouldn't be surprised the bank interest tax code is written that the bank must withhold tax even during the first month of the new tax year if the person's account(s) balances show he would exceed Bt20K interest for the year. Then again, maybe a person has to reach Bt20K before the withholding trigger is pulled on a regular type saving account. But all fixed savings account you don't have to exceed Bt20K interest because the 15% withholding is applied to any amount of interest earned...even amounts below Bt20K.

Maybe you could give us some insight on that based on the tax withholding they are hitting your with. That Bt300-400 per month you said they are now hitting your with, did that monthly reduction start in January? If so, that implies to me they use the projected method of assuming your will indeed exceed Bt20K interest earned per year based on your current balance. Or that Bt300-400/month tax deduction didn't start until recently like the bank waited until you had already received Bt20 interest for the year "before" they started applying a tax deduction. And does that Bt300-400 represent 15% of the interest earned in that month or is it higher as if the bank is taking extra to make up for pass months where tax was not withheld.

jacko45k · August 4, 2017

21 hours ago, worgeordie said:

Claim it back if you can be bothered,some fixed accounts you are not deducted tax,

regards worgeordie

Or if you dare?

I believe one can go and get a tax ID, then claim tax back from the bank providing it does not go over the tax free limit.

Personally I pay for the anonymity......

Pib · August 4, 2017

1 hour ago, jacko45k said:

Or if you dare?

I believe one can go and get a tax ID, then claim tax back from the bank providing it does not go over the tax free limit.

Personally I pay for the anonymity......

You claim the tax refund from the govt, not from the bank. The bank sends the 15% withholding tax to the govt so the refund claim is filed with the govt/local revenue office..

Monkie Business · August 4, 2017

2 hours ago, Pib said:

Below cut and paste says from..."all customer's savings accounts is more than baht 20K per year..." which implies to me the bank would be keeping a running total (aggregate) of interest paid to you during the year regardless of how many savings account you opened.....1 or a 100 accounts.

I expect the bank has all of a person's accounts referenced/linked to their ID/passport number and/or name; therefore, all the accounts are linked for total interest earned during the year purposes.

Just because you close all your accounts mid year when they happened to almost reach Bt20K interest earned which would definitely trigger a tax withholding and then reopen new accounts with the full amounts from the old/closed accounts may not stop the "interest earned this year so far" tally the bank has on your since all your accounts would be referenced/linked to your ID/passport and/or name. If so, you would start getting hit with tax the first month you opened the new accounts.

And in above example where I said you closed your accounts "mid year" just before reaching Bt20K interest earned I can not say that the bank waits till you actually exceed Bt20K interest earned in a year "before" they start the 15% tax withholding. Maybe they then only withhold 15% of the next month's interest earned. Or maybe they do a catch-up tax withholding by hitting you with a 15% tax withholding for all the months up till mid year. I don't know the fine details of how they do that.

Knowing how governments like tax money I wouldn't be surprised the bank interest tax code is written that the bank must withhold tax even during the first month of the new tax year if the person's account(s) balances show he would exceed Bt20K interest for the year. Then again, maybe a person has to reach Bt20K before the withholding trigger is pulled on a regular type saving account. But all fixed savings account you don't have to exceed Bt20K interest because the 15% withholding is applied to any amount of interest earned...even amounts below Bt20K.

Maybe you could give us some insight on that based on the tax withholding they are hitting your with. That Bt300-400 per month you said they are now hitting your with, did that monthly reduction start in January? If so, that implies to me they use the projected method of assuming your will indeed exceed Bt20K interest earned per year based on your current balance. Or that Bt300-400/month tax deduction didn't start until recently like the bank waited until you had already received Bt20 interest for the year "before" they started applying a tax deduction. And does that Bt300-400 represent 15% of the interest earned in that month or is it higher as if the bank is taking extra to make up for pass months where tax was not withheld.

Thanks Pib , I will put my accounts history together and post back.

Would you happen to know what the following MTD saving account passbook codes mean

1. TW
2. DB
3. CL
4. TB

Pib · August 4, 2017

23 minutes ago, Monkie Business said:

Thanks Pib , I will put my accounts history together and post back.

Would you happen to know what the following MTD saving account passbook codes mean

1. TW
2. DB
3. CL
4. TB

TW = Withdrawal by Transfer (found by googling...found in a post that seemed creditable)

DB = Deposit (appears in my passbook when I make a deposit by using my foreign cards to get money from home country bank)

CL = Check Clearing (found by googling...found in a post that seemed creditable)

TB= From looking at other banks codes this might be "Backdate Transfer" or "Back Tax" related....or ??????

Monkie Business · August 4, 2017

1 hour ago, Pib said:

TW = Withdrawal by Transfer (found by googling...found in a post that seemed creditable)

DB = Deposit (appears in my passbook when I make a deposit by using my foreign cards to get money from home country bank)

CL = Check Clearing (found by googling...found in a post that seemed creditable)

TB= From looking at other banks codes this might be "Backdate Transfer" or "Back Tax" related....or ??????

Thanks again Pib , I did try and do a search for the passbook codes with no luck , honest

So this is how its been so far and all the account changes were recommended and sorted out by the person at the bank who I only ever dealt with .

1. On 10th of September 2014 , I opened 3 MTD saving accounts , in each account I deposited Approximately One Million Three Hundred Thousand Baht .

For my personal records those accounts I numbered – 1 -2 -3

2. On the 5th of September 2015 , 2 accounts numbered 2 + 3 which had been earning interest were closed and no tax had been taken from any of these accounts in the past , the account balance of these 2 accounts contained the original One Million Three Hundred Thousand Baht + earned interest .

3. On the 5th of September 2015 , the original deposit of One Million Three Hundred Thousand Baht + earned interest was withdrawn from account number 1 . This account was left active and only contained the interest earned . No tax was ever taken from this account .

4. On the 5th of September 2015 , 3 new MTD savings accounts were opened and the balances from accounts 1-2-3 , was deposited . These new accounts were named by me as A-B-C .

5. These 3 new MTD accounts A-B-C were earning monthly interest from day one ( 5th of September 2015 ) and no tax was taken , until the first time on the 30th of May 2017 . ( 360 Baht ) then tax was taken every month after, on the same day and approximate same amount , from each of the 3 accounts . A-B-C .

I think its now plainly obvious that I messed up and I should have been paying more attention and taking more care . Hopefully I can try and redeem my self by attempting to claim back future tax amounts .

jacko45k · August 4, 2017

13 hours ago, Pib said:

You claim the tax refund from the govt, not from the bank. The bank sends the 15% withholding tax to the govt so the refund claim is filed with the govt/local revenue office..

Yes that makes more sense, I guess the bank will need to supply a statement of the tax paid to help,

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