On 26 Aug 2019, Thailand's Director-General of Revenue issued Notifications (No 351) and (No 352) prescribing two more anti tax avoidance laws for bank savings deposits interest income.

This Insight has been updated for the two additional Notifications.

The Director-General's Notifications

The Director-General's Notification (No.346) issued on 03 May 2019 and the two Notifications (No.351) and (No.352) issued on 26 Aug 2019 aim to curtail the tax avoidance by customers and banks who split up deposit amounts into separate accounts at different banks so that the interest income each bank pays is within their interpretations for the tax exemption threshold, thereby avoiding the 15% withholding tax on all of their interest income. 

The Director-General's aim to curtail the tax avoidance is by:

1. Requiring all banks to report all interest income paid to customers to the Revenue Department to enable the Revenue Department's tax officers to scrutinize and investigate tax compliance; and also
2. Requiring customers to comply with new rules, as follows:

For bank savings deposit accounts the Director-General's Notification (No 346) issued on 03 May 2019 prescribes for a customer wishing to exercise the right to exemption from tax for interest income up to 20,000 Baht per year, he or she:

1. Shall not earn interest income on all their savings deposit accounts with whatever bank totaling more than 20,000 Baht in a tax year;
2. Shall notify his or her Citizen ID No. or Taxpayer ID No. to their banks and also present his/her Citizen ID Card or Taxpayer ID Card to their banks for verification of the account holder's details; and
3. Shall not instruct their banks to not report their interest to the Revenue Department (if a customer does this, banks are instructed to deduct 15% withholding tax from the interest income they pay).

For tax free time deposit accounts the Director-General's Notification (No 351) issued on 26 Aug 2019 prescribes for a customer wishing to exercise the right to exemption from tax for interest income on tax free time deposits, he or she:

1. Shall have only one tax free time deposit account; and
2. Shall notify his or her Citizen ID No. or Taxpayer ID No. to their banks and also present his/her Citizen ID Card or Taxpayer ID Card to their banks for verification of the account holder's details.

For fixed deposits of >55 year olds the Director-General's Notification (No 352) issued on 26 Aug 2019 prescribes for a customer wishing to exercise the right to exemption from tax for interest income under the Islamic Principle up to 30,000 Baht per year, he or she:

1. Shall maintain his or her fixed deposit for more than 1 year;
2. Shall notify his or her Citizen ID No. or Taxpayer ID No. to their banks and also present his/her Citizen ID Card or Taxpayer ID Card to their banks for verification of the account holder's details; and
3. Shall complete the information and certification form attached to the DG's Notification (No. 352) and file it with the bank for the bank to maintain for inspection by the Revenue Department's tax audit officers.

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