GavinK
Crazy Mango
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Post by GavinK on Sept 11, 2017 16:54:21 GMT 7
Many banks are offering accounts for a fixed term of 2 or 3 years whereby you can make a monthly deposit of around 25,000 baht, with the interest paid at the end of the term (or on closure) without deduction (or withholding) of tax, so they are being marketed as 'tax free'. I already have 2 of these with 2 separate banks and when I went to open another elsewhere the bank told me that you are only allowed to have one running at any one time across all Thai banks (I asked if she meant only 1 per bank and she reconfirmed only 1 across all banks). I've never seen any literature on these or been asked before when I opened the other 2, so just wondered if anyone else had come across this ?
Thanks.
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AyG
Crazy Mango Extraordinaire
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Post by AyG on Sept 11, 2017 16:56:30 GMT 7
If you have more than one you are required to file a tax return at the end of the year and pay tax on the interest on the 2nd and subsequent accounts if you're above the tax threshold. (That's assuming you invest the maximum in each account.)
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chiangmai
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Post by chiangmai on Sept 11, 2017 18:13:11 GMT 7
The ones I have seen that require a regular deposit each month are insurance products and not fixed term deposits, are you certain they are savings accounts?
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Post by Fletchsmile on Sept 11, 2017 21:50:10 GMT 7
The ones I have seen that require a regular deposit each month are insurance products and not fixed term deposits, are you certain they are savings accounts? TMB do one called Dreamsaver/ TMB Savings account. You save 500 baht to 25k baht a month Interest rate is up to 2.5%. |
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Post by Fletchsmile on Sept 11, 2017 22:04:36 GMT 7
They get marketed as tax free/ no tax deducted. But at the end of the day I think they are still subject to income tax in the same way as other accounts depending on your tax status. However, because the balances are small and the interest will be below the de minimis limits where tax is payable/ needs to be deducted (20k) then they pay them without deducting tax. I suspect it is this keeping below the de minimis limits why they limit your accounts within a single bank and want to be able to aggregate.
I find that with our bank accounts below 20k a year interest in aggregate they don't deduct tax above that they do.
On a TMB Dream Savings if you do the max of 25k a month. You're always going to be below the limit where tax needs to be deducted. That's a key reason the amounts are small each month
There's always a lot of misunderstanding around this in Thailand, about deducting WHT or not. My understanding is that whether it is deducted or not is mainly administrative. It doesn't affect your tax liability, i.e more than 20k in aggregate is taxable regardless of whether all your banks have actually deducted tax or not. Less than that can be exempted
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rubl
Crazy Mango Extraordinaire
The wondering type
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Post by rubl on Sept 11, 2017 22:11:54 GMT 7
Haven't come across this, but know BoT is tightening all kind of regulations. Of course, in part I'm guilty. I help banks make such data sharing and analysis possible  |
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Post by Fletchsmile on Sept 27, 2017 11:50:03 GMT 7
A couple of articles in the Bangkok Post around this in the last couple of days. As mentioned above the de minimis limit is 20k in aggregate below which tax can be exempted. The admin practices differ and some even deliberately try and abuse the rules. I think they'll fnd practices mentioned in the article are not limited to just one bank  =================================== BoT steps in on withholding taxBoT steps in on withholding tax Banks helping clients evade payment Published: 26/09/2017 at 07:27 AM Newspaper section: Business The Bank of Thailand has coordinated with the Finance Ministry on probing a commercial bank that reportedly helps customers avoid paying the compulsory 15% withholding tax deducted from deposit interest income. "The Bank of Thailand acknowledges such undesirable behaviour was committed by a commercial bank and is looking into the incident to see if it is only a case of a particular bank, branch, or certain bank official offering a special service for major clients," said Ronadol Numnonda, assistant governor of the supervision group at the central bank. "The central bank will coordinate with the Revenue Department to examine if other commercial banks have adopted such a practice." The Bank of Thailand will also order commercial banks to strictly comply with tax regulations, he said. The move came after Finance Minister Apisak Tantivorawong pointed out some commercial bank officials had been helping their customers avoid paying tax by exploiting the 15% withholding tax exemption on interest income of up to 20,000 baht a year. contd. www.bangkokpost.com/business/news/1331235/bot-steps-in-on-withholding-tax |
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Post by Fletchsmile on Sept 27, 2017 11:55:41 GMT 7
and today.... There's been questions around this for years and with various banks. This is actually part of the confusion and misunderstanding. I've know people recommend opening another account(s) to avoid being over 20k for years Best to play by the rules though and be worry free about the implications. Problems come in when the rules aren't clear/ clarified to people or worse still people (both customers and bank employees) recommending practices to evade tax and muddying the waters ============================= Plan to axe deposit tax break halted Published: 27/09/2017 at 04:00 AM Newspaper section: Business The Finance Ministry will delay plans to eliminate an exemption on interest income earned through savings deposits after the Bank of Thailand promised to enact more stringent measures in overseeing financial institutions. The Revenue Department recently discussed the issue with Finance Minister Apisak Tantivorawong. Both sides agreed the ministry should delay eliminating the exemption after the central bank said there were measures available to supervise commercial banks which attempt to help customers avoid paying the compulsory 15% withholding tax deducted from deposit interest income, said the department's director-general Prasong Poontaneat. contd... www.bangkokpost.com/business/news/1331895/plan-to-axe-deposit-tax-break-halted |
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