On 4 April 2019, the Revenue Department issued Notification of the Director-General of the Revenue Department Regarding Income Tax No. 344 (“the Notification”). The Notification sets out rules, procedures, and conditions for interest from savings accounts being exempt from personal income tax.
Keywords: Mazars, Thailand, Tax, Revenue Department, Personal Income Tax
14 May 2019
The Notification lists the following conditions for such interest to be tax exempt:
1. Interest from all savings accounts shall not exceed 20,000 baht in the tax year.
2. The name and tax identification number used for opening accounts must be that of a person liable to pay personal income tax on interest from such accounts.
3. Recipients of interest from savings accounts shall consent to all banks paying such interest submitting information about the interest to the Revenue Department in a form specified by the banks. Banks shall keep documentation of the recipient’s consent in the event that the Revenue Department conducts a tax audit.
4. The recipient is not required to include interest from savings accounts, whether in whole or in part, as income in the personal income tax computation.
If the recipient does not comply with condition no. 3 above, the interest received shall not be exempt from personal income tax. In that case, the bank paying the interest is required to deduct 15% withholding tax and remit it to the Revenue Department. Failure to do so will result in the bank being subject to a surcharge of 1.5% of the tax liability a month, in addition to the personal income tax liability.
Upon the recipient giving consent, the bank will submit information on interest from all savings accounts to the Information Technology Division of the Revenue Department. The information shall be in electronic form and submitted as specified on the Revenue Department’s website. The due dates for submitting the information are as follows:
- For information on interest to be paid in the first half year, as computed up to 15 May – by 20 May of the tax year.
- For information on interest to be paid for the whole year, as computed up to 15 November – by 20 November of the tax year.
- For information on interest for the first half year, which is paid before or by 30 June – by July of the tax year.
- For information on interest for the whole year, which is paid before or by 31 December – by January of the following year.
Under the Notification, recipients of such interest are required to register with banks with which they have savings accounts by 15 May 2019 to give their consent for the bank to submit information on interest to the Revenue Department. However, as the Notification led to widespread criticism by taxpayers, the Revenue Department held a meeting with the Thai Bankers Association on 25 April 2019 and concluded that the Revenue Department would adjust the conditions for 15% withholding tax being applied to interest from savings accounts. The Revenue Department announced that it would issue a new notification within one or two weeks to alleviate the impact of the Notification and any inconvenience to savings account holders in regard to providing consent for banks to send information about interest to the Revenue Department for examination.
For more information, please visit the Ratchakitcha website.