GavinK
Crazy Mango
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Post by GavinK on Jun 26, 2019 12:50:49 GMT 7
Since May I've noticed banks deducting the 15% withholding tax from interest payments following measures by the gov to try and close the 20,000 interest loophole. This is for non-fixed term accounts.
TISCO told me to register my tax id to avoid the interest deduction, which I did, but I'm not convinced that will avoid the tax being deducted.
TISCO also told be that all the banks "are linked now" so as soon as your YTD interest across all Thai banks hits the 20,000 level, the banks have to start to deduct the tax. Indeed Thanachart hit me with tax in June even though I registered my tax id with them.
Anyone know for sure ? Just trying to find a way to avoid having to go through the tax reclaim process at the end of the year.
BTW I tried to register my tax id with other banks with varing results - Thanachart=fine, TMB=no can do, Krungsri="wtf...?"
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Post by Fletchsmile on Jun 26, 2019 17:28:24 GMT 7
The actual rule has always been based on aggregate total interest payments, and that's been around 20k for years. Here's a Revenue department link. Actually dated 2014 Under point 3.2 on interest www.rd.go.th/publish/6045.0.htmlThe problem is there are so many people out there who never understood the rule through ignorance or word of mouth. Including bank employees. Then there were people including bank employees who would try and game the system, either thru ignorance, half-truths to market accounts, or just trying to be clever. On top of that there was then confusion about the simple admin side of whether a bank deducts tax or not. Whether the bank deducts tax or not doesn't affect your liability. (Except occasionally a few special tax accounts) People even used to suggest opening more than one account with the same bank so you could have under 20k per account. A lot of it came about as systems weren't good enough to aggregate total balances. Even within one bank. And pretty much a total absence of the Revenue or anyone else being able to aggregate systems at different banks. So bottom line. Regardless of whether the bank deducts interest or not via their admin process, you are generally still technically liable on interest of more than 20k in aggregate across all banks. Systems are getting generally better at picking this up. Including the Revenue department. |
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FIREinTh
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Post by FIREinTh on Jun 26, 2019 21:06:54 GMT 7
I registered my tax id at Krungsri at Paragon last week. They promised the withholding tax would be stopped and I'll report back in a few days. Fingers crossed...
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Post by Fletchsmile on Jun 27, 2019 13:10:02 GMT 7
I registered my tax id at Krungsri at Paragon last week. They promised the withholding tax would be stopped and I'll report back in a few days. Fingers crossed... They can stop the withholding tax.
That doesn't remove your income tax liability though. Whether they deduct WHT or not you are still usually liable for tax on interest of over 20k in aggregate.
What often happens is that they will stop WHT, particularly if you request, until the interest amount reaches 20k, then they start deducting it.
WHT is just tax deducted/ witheld at source.
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GavinK
Crazy Mango
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Post by GavinK on Jun 27, 2019 18:00:51 GMT 7
I registered my tax id at Krungsri at Paragon last week. They promised the withholding tax would be stopped and I'll report back in a few days. Fingers crossed... That doesn't remove your income tax liability though. Whether they deduct WHT or not you are still usually liable for tax on interest of over 20k in aggregate.
Isn’t Thai bank interest part of ‘assessable income’ so will only be part of your ‘taxable income’ if in total it and any employment income, etc. exceeds all of your allowances ? eg. a non-working Thai wouldn’t be liable for tax if their only income was 40,000 in interest ? If so then it’s whether you pay the tax during the year via withholding tax and claim it back at the end of the year, or make arrangements to have it paid gross (eg. by registering your tax id). |
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Post by Fletchsmile on Jun 27, 2019 18:30:03 GMT 7
That doesn't remove your income tax liability though. Whether they deduct WHT or not you are still usually liable for tax on interest of over 20k in aggregate.
Isn’t Thai bank interest part of ‘assessable income’ so will only be part of your ‘taxable income’ if in total it and any employment income, etc. exceeds all of your allowances ? eg. a non-working Thai wouldn’t be liable for tax if their only income was 40,000 in interest ? If so then it’s whether you pay the tax during the year via withholding tax and claim it back at the end of the year, or make arrangements to have it paid gross (eg. by registering your tax id).
You can choose to exclude it from your PIT comp provided that 15% WHT has been deducted and it doesn't exceed 20k.
If you choose to do that and both conditions are met it doesn't form part of assessable income. You've paid 15% on less than 20k. End of story. That can make sense for a higher rate tax payer with less than 20k
If your interest is below 20k you can ask your bank to pay without WHT. This is what most non-working low income Thais do, as they don't know anything about paying tax and don't file a tax return anwyay.
But when it exceeds 20k banks will usually deduct 15% WHT automatically.
Not sure someone can make arrangements for gross if over 20k by registering tax ID, I suspect a lot of Thai bank clerks will just say no anyway 
I believe if that's the only income they have, a low-paid Thai or anyone else can claim it back if covered by their allowances. Never done it myself as I've either been 1) higher rate tax payer or 2) not working and don't want to be bothered filing a tax return and visiting the tax office 
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Back to your original post. I believe Tisco are right and they should be able to pay interes gross if you register with them. But once it's over 20k it will get WHT deducted
With Tisco
- I haven't bothered registering and they deducted 15% WHT too this month. It's been set that way for years from SCBT days.
- My wife received her interest with no WHT deducted. It's been set that way for years too from SCBT days. But when she goes over 20k they have deducted in the past with SCBT
- Both children received with no WHT deducted, but again have had deducted with SCBT if it goes over 20k
All would be under 20k annualised as most of our Tisco savings are in the Mortgage One savings account and offset the mortgage
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Post by rgs2001uk on Jun 27, 2019 21:04:34 GMT 7
Isn’t Thai bank interest part of ‘assessable income’ so will only be part of your ‘taxable income’ if in total it and any employment income, etc. exceeds all of your allowances ? eg. a non-working Thai wouldn’t be liable for tax if their only income was 40,000 in interest ? If so then it’s whether you pay the tax during the year via withholding tax and claim it back at the end of the year, or make arrangements to have it paid gross (eg. by registering your tax id).
You can choose to exclude it from your PIT comp provided that 15% WHT has been deducted and it doesn't exceed 20k.
If you choose to do that and both conditions are met it doesn't form part of assessable income. You've paid 15% on less than 20k. End of story. That can make sense for a higher rate tax payer with less than 20k
If your interest is below 20k you can ask your bank to pay without WHT. This is what most non-working low income Thais do, as they don't know anything about paying tax and don't file a tax return anwyay.
But when it exceeds 20k banks will usually deduct 15% WHT automatically.
Not sure someone can make arrangements for gross if over 20k by registering tax ID, I suspect a lot of Thai bank clerks will just say no anyway
I believe if that's the only income they have, a low-paid Thai or anyone else can claim it back if covered by their allowances. Never done it myself as I've either been 1) higher rate tax payer or 2) not working and don't want to be bothered filing a tax return and visiting the tax office
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Back to your original post. I believe Tisco are right and they should be able to pay interes gross if you register with them. But once it's over 20k it will get WHT deducted
With Tisco
- I haven't bothered registering and they deducted 15% WHT too this month. It's been set that way for years from SCBT days.
- My wife received her interest with no WHT deducted. It's been set that way for years too from SCBT days. But when she goes over 20k they have deducted in the past with SCBT
- Both children received with no WHT deducted, but again have had deducted with SCBT if it goes over 20k
All would be under 20k annualised as most of our Tisco savings are in the Mortgage One savings account and offset the mortgage
Up my way in Bkk, there are certain times of the year its best to avoid banks, the Chinese/Thais are in there getting their paperwork in order to reclaim back the tax, poor Litten Lek is working her ass off, and these people wont accept BS excuses, as you say for your average non tax paying Thai it makes no difference. |
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FIREinTh
Crazy Mango
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Post by FIREinTh on Jun 28, 2019 12:23:56 GMT 7
Interest was paid yesterday with no WHT into my Mee Tae Dai savings account at Krungsri, so I can confirm giving your tax id works with them.
Fletch, can you confirm that I don't have to report the interest on my tax return as long as it's under 20k, even if I have the account set for no WHT?
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Post by Fletchsmile on Jun 28, 2019 16:41:57 GMT 7
Interest was paid yesterday with no WHT into my Mee Tae Dai savings account at Krungsri, so I can confirm giving your tax id works with them. Fletch, can you confirm that I don't have to report the interest on my tax return as long as it's under 20k, even if I have the account set for no WHT? That seems to me like doesn't fulfil both conditions of (1) under 20k and (2) 15% WHT deducted
so technically it becomes taxable, and you have some tax to pay.
That said I think many people just ignore it. In the past the Revenue hasn't been particularly vigorous in enforcing and chasing people for if they don't include it on their return. Probably because they didn't have decent systems and easy ways to track it. Sounds like they now have better systems and banks are working with them to close the loophole though.
The Thai Revenue are better at pcking things up these days, and their systemes have improved a lot. e.g.
I filed a tax return about 3 years back and ticked the box for including spouse's tax combined to share allowances etc as I was a higher rate tax payer, and she wasn't. Then I could also claim allowances for my Thai mother-inlaw and FIL to offset my Thai tax liability. They disallowed these, and said that it was because my wife has some small consultancy income that wasn't included on my return, and named the company. I'd overlooked that, so it was fair enough. What surprised me though, was that they had linked my Thai ID with income to my wife that came from a company, not even a bank or financial institution. That company would have included it on their witholding tax returns filed each month. So they had linked: My Thai tax ID to my wife's Thai tax ID and then her tax ID to separate WHT returns from a company and their tax ID. Systems have definitely improved a lot.
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FIREinTh
Crazy Mango
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Post by FIREinTh on Jun 29, 2019 10:41:27 GMT 7
Yes, Thai systems have definitely improved a lot. I have a couple friends who did some side work for a Thai company, and 2 years later the Revenue Department approached them for unpaid taxes. They had to re-file that year's tax return. Another example, a few years back the labor department needed my address to renew my work permit. Up until then my employer had always used their address on my work contract and work permit. A year later, my landlord informs me she changed the townhouse I was renting to her mom's name (who doesn't work) because she got hit for tax on the rental income. That's also why this TM30 form is a nightmare - lots of landlords don't want to register their foreign renters because they're worried they'll have to declare the rental income.
I'm confused about tax on bank account interest now. I always thought less than 20k interest from a regular savings account is not taxable. Maybe the Mee Tai Dai is treated as a fixed account rather than a savings account?
Maybe I should get the WHT reversed since 15% is less than what I would pay if I have to include the interest as income on my tax return?
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FIREinTh
Crazy Mango
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Post by FIREinTh on Jul 24, 2019 15:43:06 GMT 7
I was at the revenue office at Times Square today and got clarification about bank account interest.
If your total interest across all your bank accounts is under 20,000B, it is NOT taxable.
Here is a summary of the different scenarios about reporting it on your tax return:
1. Total interest under 20,000B, no withholding tax
Not taxable and you do not need to include it on your tax return.
2. Total interest under 20,000B, 15% withholding tax deducted
You should include the interest on your tax return to get a refund for the withholding tax.
3. Total interest over 20,000B, no withholding tax
You must include the interest on your tax return and it will be added to your total income for the year and taxed accordingly.
4. Total interest over 20,000B, 15% withholding tax deducted
It's your choice to include it on your tax return or not. Your tax obligations end with the withholding tax being deducted. However, if your overall tax rate is below 15%, you should include it because the interest will
be taxed at that lower rate and you will get refund for some of the withholding tax. If your tax bracket is above 15%, you can include it but don't because it will be taxed at the higher rate.
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