Authorities backtrack on move to tax interest from bank deposits
The Revenue Department has withdrawn a much-criticized demand for bank depositors to provide written consent to allow their banks to deduct tax on interest earned on deposits.
Revenue Department spokesman Mr. Pensai Suraswadi said today that the department would issue a new announcement this week to exempt bank depositors, who have less than four million baht deposited in their accounts, from providing the written consent.
However, he said that depositors who earn more than 20,000 baht in interest per year from deposits exceeding four million baht will still be subject to 15% tax on the interest.
He maintained that the measure was primarily aimed at preventing tax avoidance by big bank depositors, adding that the department earned less than one million baht in tax from bank interest due to known avoidance schemes.
Bank officials have been accused of helping their clients avoid tax on interest by advising them to close the accounts when the interest earned approaches 20,000 baht.
The commercial banks expressed concern that the measure would affect about 80 million bank accounts, most of which contain less than 4 million baht in deposits. The measure will unnecessarily burden small depositors with paperwork, they claim, and will subject them to interest taxation for their failure to give the written consent to their banks, even if the interest earned is less than 20,000 baht a year.