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TerraplaneGuy

New Rules - Withholding Tax on Interest - Tax ID

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This year the government started ordering banks to withhold 15% tax on interest paid to individual account holders (including expats).  But we can stop that if we give our bank a copy of our Tax ID card (assuming we've got one - I do.)  My understanding is that the tax exemption for our first B20,000 of interest remains in effect.   In past years, I have not filed a Thai tax return because my only local income is bank interest and it is below that B20,000 threshhold. 

 

Question: Does anyone know whether, if I give my bank my Tax ID so they stop withholding tax on my interest, I will be required to file a tax return even if my total income remains below the taxable threshhold?  I would assume not but I'm wary of this new requirement.

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Not answering your questions but jumping aboard.

Banglamung would not give ma a tax ID card , saying they did not issue them any more, simply giving me the number.

Some years ago (not this year), my bank started taking 15% off all my interest, I only decided in Jan 2019 to try and recover it, prior to that thinking 'don't prod a sleeping dog'.

 

As to your question, I believe different banks have different approaches to this, they may still take off the tax. The only way to recover it would be to submit a tax return.

 

I wonder if registering my tax ID at Bangkok Bank would serve any purpose, I would like to avoid the tiresome situations I was put through last year. I would have got nowhere except for the assistance of one very helpful lady at the revenue dept. I still clocked up a few hundred Km though.

 

 

 

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Giving the bank your tax ID number serves no purpose, the bank doesn't care whether you have a tax ID or not and file a tax return or not, they are in a different business entirely. Banks act as agents of the BOT and the Revenue Service, they take the steps they are asked to take and nothing more. The Revenue rules state that if you pay tax below the personal allowance threshold that money can be returned to you, when you file a tax return, a simple enough process in Thailand.

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17 minutes ago, TerraplaneGuy said:

The Tax Notification 346 of May 3, 2019 states that banks are now required to withhold 15% tax on interest unless the account holder submits his Tax ID to the bank.  This is a new development and I am not making it  up.  My bank (Krungsri) told me this.  I was surprised to see they had started withholding tax on my interest and after inquiring they said it was because of the new law but if I give them my Tax ID they will stop withholding tax.  This new rule is explained on this site: https://sherrings.com/interest-income-personal-tax-thailand.html

 

As OP I would appreciate it if posters would please stick to the original question and make sure they are aware of this year's changes to the law before answering.  

Splitting accounts was always known to be a low level tax fraud loop hole that would be closed one day, it was rarely used by anyone who filed a tax return because there was little point... it is just as easy to file a return and get the tax back legally as it is to split accounts and break the law! 

 

The purpose of supplying the bank with your tax ID is so Revenue can ensure split accounts don't aggregate above the tax free threshold. If you don't pay tax on your interest AND you have no other income that is taxable, you are not required to file a tax return.  Those things said my previous answer stands, the banks are not in the tax business, your declaration to the bank that includes your tax ID number is a matter of trust between you and the Revenue, the bank is merely the messenger in that conversation.

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9 hours ago, TerraplaneGuy said:

Does anyone know whether, if I give my bank my Tax ID so they stop withholding tax on my interest, I will be required to file a tax return even if my total income remains below the taxable threshhold? 

Not required to file a tax return.

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As a side issue some western countries, Australia for one are starting to ask for a foreign tax ID if you are claiming non resident tax status there. So I have asked for a tax ID at the revenue office in Phuket but they stayed the banks have to do something, have not chased it up since. 

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I recently ran into the same problem with Krungsri Bank. They told me that if I gave them a tax ID number, they would stop withholding the tax. Where does a person acquire a Thai tax ID?

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25 minutes ago, toolpush said:

I recently ran into the same problem with Krungsri Bank. They told me that if I gave them a tax ID number, they would stop withholding the tax. Where does a person acquire a Thai tax ID?

At their local tax revenue office....the office where you would file a tax return.

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On 10/15/2019 at 7:35 PM, TerraplaneGuy said:

My understanding is that the tax exemption for our first B20,000 of interest remains in effect. 

For Thai account holders they do not withhold tax until over the 20K baht exemption.  But for farang account holders they withhold the tax from everything.  It would then be up to the farang to claim it back by filing Thai taxes.  I assume a large percent of farang won't bother with it and that the government thinks that too, which is why they do it.

Edited by rwill
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1 hour ago, toolpush said:

I recently ran into the same problem with Krungsri Bank. They told me that if I gave them a tax ID number, they would stop withholding the tax. Where does a person acquire a Thai tax ID?

Oddly enough, at the local tax office.

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It is my experience at several banks. Yes now they charge taxes on interest even if you have not reached the 20000 Baht. To avoid this you need to tell the banks your tax ID (show them the paper that you got from the Revenue Department). After I did they stopped to charge taxes. 

 

Edited by Beggar

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For Thais, their Tax ID number is their ID card number, so the banks already have it, and report it to the tax department. For farangs the banks normally only have your passport number so are unable to report it to the tax department, thus are required to withhold tax.  So it's up to you to give them your tax ID information now.

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15 hours ago, Pib said:

Just because you have Thai tax ID does not mean you "must" file a tax return year each.   It just means you may have a need to file a return or did have a need to file for one or more years like to reclaim tax withheld on a bank acct.   

 

I got my tax ID a half dozen or so years ago when I needed to file for refund of tax withheld on some fixed accts I had for a couple of years.  I have not filed since...no need  to as I don't have any taxable income in Thailand..  

 

Below post provides instructions on how to stop the tax withholding for a Krungsri bank acct with info on why interest is being withheld.   And for any other bank it's the same....provide them your tax ID number.  I stopped the tax withholding on my Krungsri and Bangkok Bank accts by providing them my Thai tax ID.

 

 

I looked at that related thread and saw some people said that to stop the withholding tax you need to give Krungsri not only your Tax ID but also a tax return filing receipt, apparently as confirmation that the ID was valid.  Did they insist on that with you?  I have a Tax ID but never filed a return (nothing to declare or refund) so have no receipts.  But I want them to stop withholding tax on my interest.  

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