Refund of Withheld Interest on Thai Bank Accounts

[Bob]

For those who have fixed savings accounts here in Thailand and your bank withholds the usual 15% for the government (e.g., those who have visa accounts where you keep your 800,000+ baht in a timed savings account), you can obtain a refund of the withheld tax and the procedure to do so is fairly easy. I read about it a year or so ago somewhere (perhaps Thai Visa) and wanted to give it a try.  Anyway, here's how it worked in Chiangmai for two of us who went to do it together:

 

(1)  Go to your bank and get a document showing how much interest they've withheld.  Since you can apply for a refund for 3-years back, obviously get one for each year (or, perhaps, your bank will put all that information on one piece of paper).  At SCB, they knew exactly what I was requesting and in short order, without charging a fee, gave me a form made for that purpose for each of the two years I wanted.

 

(2)  Go to your local Revenue office*.  Once there, explain that you're there to apply for a refund of interest withheld by your bank on your savings account.  We were shuffled to a room on the second floor where a very friendly Thai lady then told us to go back to the first floor office to obtain a Tax ID number.  We did so....it took the guy maybe 5 minutes to take the information from each of us and another 5 minutes to use a computer to print out our Tax ID cards.  Then, we were off to the second floor office again and the Thai lady took a copy of our passport identification page, some proof of residence/address** and then she filled out the form (Kor 10 form which is all in Thai) for each of us for each year we were applying for the refunds.  She did carefully question us to make sure that we were not working or earning wages or a salary in either Thailand or our home country.  She then told us that we would receive within 30 days in the mail some vouchers which we then needed to present to another revenue office to obtain our funds.

 

(3) Two weeks to the day from that visit, I received two checks (and not vouchers) in the mail and then deposited same into my bank account.  I'd note the checks were written on Krung Thai bank but are marked in the corner "AC Payee Only" - meaning that you can only deposit them in your own bank account.  My bank promptly took care of that and explained that it would be 2-3 days before the money actually appeared in my account.

 

(4) As a final note, I read before that you're supposed to apply for these refunds in January or February or they will charge some fee for doing it "late."  I have no clue if that's true as we applied and received our refunds in January.  To be safe, do it in January.

 

*Here in Chiangmai, we went to the Revenue Office on the southwest corner of Chotana Road and the Seven Hundred Year Road (the first building north of the Chiangmai City Hall building or the third building south of the northeast corner of the complex). The name on the building in Thai is สำนักงานสรรพากร (which means Revenue Bureau/Office with the word "สรรพากร" meaning "revenue").]

 

**We had heard that one must present proof of residence. My friend presented his yellow book and the Revenue lady was happy to take a copy of that.  I had both a copy of my lease and a 50-day old Certificate of Residence (which I had previously obtained to get driving licenses) and she said either was fine - she took a copy of the Certificate of Residence.  However, a third friend who applied for and received his refund only had a business card which showed his Thai residential address and that was accepted as sufficient.  So, perhaps, all they want to see is something to verify the address to which they will mail the refund checks. 

[Guest bbillybb]

So if you have a savings account, the bank holds 15% of the interest.Not having an account, how often is interest paid to you? Is this interest a tax on income? If one had 1500 Bhat retained...will they get it all back?

[Bob]

In my "regular" account (a generic savings account out of which I spend money for living expenses here), I'm paid interest twice a year.  The bank does not withhold taxes on this account and, while I'm not too sure of the interest rate, it's somewhat low (about 1%).  For my "visa" account, I last elected (in October of 2012) to do a 22-month timed account which pays 3.75% interest but they actually pay the interest only at the end of the 22-month time period.

 

So, using my example (and I happen to have 1 million baht in the visa account), I'll earn 68,750 baht in interest this coming August; however, the bank will withhold 10,312.50 baht and pay it over to the government.  Next January, using the procedure noted above, I'll get all that withholding back. 

 

Is it a tax on income?  No, it's a withholding tax just like a withholding tax on a paycheck from the West.  In the west, you'd have to file an income tax return to get back withheld taxes that you don't owe but here you can get at least bank interest back (provided you're not earning wages here or elsewhere) by following the procedure noted.

 

Yes, you'll get it all back (again, provided you owe no taxes for working here in Thailand).

 

For most/many falang residents who don't keep much money over here, they likely don't have any earned interest withheld as taxes and so wouldn't be interested in this whole topic.  But for those who keep 800,000+ baht in an account here to support their retirement visa, it's likely worth it to them to get the refund.

 

Please note - for those who choose the 800,000 baht scheme to support a retirement visa -  you need to be careful as to which type of account you use.  It must be an account where you can get your money whenever you want and not a traditional CD where you cannot get your money until the end of the time period (this type of account doesn't qualify and you won't get the bank letter you need to get your new one-year retirement extension).  Every bank (I think) offers acceptable accounts and you just need to make sure (ask!) that you can get the bank letter for whatever particular account you choose.  My current "visa" account is, as noted, set up for 22-months at 3.75% and I can go withdraw it any time I want (however, if I do, I'll lose all or most of the interest on it).  In my particular case, I just let the money sit and earn interest - considering it a decent return (about 3 times better than what the US banks are paying) and also considering it a safety net should I ever need the funds for some unknown emergency.

 

Most of my friends here in Chiangmai who do the 800,000 baht routine elect much shorter timed accounts - usually 6 to 9 month accounts.  They feel more comfortable with the shorter time periods although they also earn a lower rate of interest.  Since I never touch the funds in my "visa" account, the longer time period and higher interest is fine with me.