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bluweyze

Opening a Thai Bank Account- New Policy?

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NancyL    6,821

I think the "problem" is with Thailand trying to comply with U.S. regulations about "know your customer"  and reporting activity of their U.S. customers to the U.S. gov't.  

 

Bangkok Bank works to comply with the U.S. gov't regs, in part because they want to continue to receive U.S. gov't deposits for recipients of SS and VA benefits.  No other bank in Thailand is awarded this trust.  A friend had no problem in opening a U.S. dollar account at Bangkok Bank two months ago and I talked with the BB-KSK asst. mgr this weekend about Hubby and me opening a U.S. dollar account soon because we're expecting an IRS refund and this isn't the best time to convert USD to Thai baht when you don't need to.  He said "no problem", bring in Hubby when he returns from Malaysia and we'll open a USA account for you.

 

Speaking of Hubby, he's been in Kota Kinabalu, Sabah state for several weeks, having fun with friends and also applying for our MM2H visa.  The appointment with Sabah immigration went amazingly well (and will be reported elsewhere), but his meetings with Malaysian banks were not-so-good.   The way that the MM2H visa works is that once approved, the visa holder has to make a large deposit in a Malaysian bank which can be withdrawn only under specified conditions.  (unlike the new proposed 10 year Thai visa, where the money has to be on deposit in a Thai bank BEFORE approval).  Yes, the funds on deposit earn interest and can be withdrawn when leaving the country, etc.

 

Anyway, after a very positive meeting with the MM2H Imm. officer for Sabah, Hubby went to visit some banks to see about setting up a "MM2H bank account".  First question was about his nationality.  He was shown the door immediately in a couple banks, until he had the presence of mind to start slowly telling the story about how we've been retirees in Thailand for nine years, etc, etc.  Then the bank officer asked if we had bank accounts in Thailand.  Bingo!  Yes, no problem, we could become customers of their bank.  All we had to do was retain our Bangkok Bank account, route the money from the U.S. into a Bangkok Bank account and then wire from Bangkok Bank into their Malaysian bank account.

 

He was blown away the first time this was proposed and called me for discussion.  My first thought was "this is a way for some banks in three countries to make some money".  Then I wondered if it was legal.  As I thought about it, I realized the burden of FATCA reporting is on us, the account holder.  Even if the Malaysian bank isn't reporting to the Feds, we should.  And if we have, say $100,000 that flows through Bangkok Bank and into a Malaysian bank, we'd report that high balance for both banks in our FATCA report and everything would be cool.  It's not like we're taxed on that amount.  Yes, one of the "problems" with FATCA is that you end up "double reporting" the same money when you shift it between bank accounts.  But that only becomes  a problem when you fail to report and are  penalized.  

 

 

 

 

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scottiejohn    1,088

I should add that the only reason for my opening a new bank account today was that I was concerned by the OP’s original post which now appears to be unfounded.

As one of the questions in my previous post above I asked the teller about any known extra restrictions in the pipeline and she said no, but she went and talked to her manager who came back and also said they had no knowledge of any new documents/restrictions on account openings for either present account holders opening accounts or new ‘walk in’ customer account openings!

As we all know the ‘rules’ can be made by the teller/clerk on the spot to suit their mood at the time of their ‘ruling’.

I think we can relax until we get some real evidence that some new law has been introduced.

PS; comments about US citizens and their financial restrictions mention in earlier posts are to do with the recent (2015/16) FACTA regulations imposed by the US government worldwide and not restricted to Thailand.

 

 

PS I wrote this B4 seeing Nancy(L) response above.

Be aware that any national who is considered to have a 'Financial entity/base' in the US is subject to FACTA.

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scottiejohn    1,088
28 minutes ago, NancyL said:

I realized the burden of FATCA reporting is on us, the account holder.  Even if the Malaysian bank isn't reporting to the Feds, we should.

Having been involved in FACTA compliance in the UK with a major bank I can assure you that any bank in any country which has 'agreed' to accept FACTA is reporting to the US FED via it's own internal Tax revenue authority.  In the case of the UK all banks who have carried out due diligence and 'Know your Customer' audits will report any customer of any nationality who has a 'financial Nationality or physical connection' with the US.  Many UK Expats are having their bank accounts frozen because they have not responded to UK bank letters asking them to clarify their non dem/possible FACTA status.

Nancy is totally correct in that FACTA can result in the same money moved between different banks/countries in the same (US) tax year being multiple accounted for as each bank will report only the amounts involved  and cannot reveal the sources unless asked for.

As an ex banker all I can say is that FACTA for a non US citizen is horrendous. How US citizens handle it is beyond me.

As a side note:  In many circumstances UK expats do not need/will not have to pay tax on foreign earnings, my understanding is that it is only in exceptional circumstances that a US expat can avoid paying tax on foreign income, hence the Foreign Account Tax Compliance Act (FATCA) 

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CMBob    693
6 hours ago, scottiejohn said:

How US citizens handle it is beyond me (FATCA).

Actually, I've complied with the rules for years - filing the FBAR (online only nowadays) and attaching the 8938 form to my income tax return - and it's rather simple and easy to do.  All you have to know is your bank name and address, your account number, and the highest amount that was in each foreign account at any one time during the year.  If you switch banks (within or without the same foreign country) or even move the same money to a different account number in the same bank, then you just add that information too [which might appear to outsiders that you have almost double the money but it really makes no difference as the filings are simply informational (for interest reporting on foreign accounts, you simply do that on your tax return the same way you'd report interest of any US bank account)].  Of course, if you never have more than $10,000.00 in foreign accounts at any one time during the year, you don't have to file any forms (but you still report any interest earned on your annual income tax return like you've always done). 

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Dante99    1,775
6 hours ago, CMBob said:

Actually, I've complied with the rules for years - filing the FBAR (online only nowadays) and attaching the 8938 form to my income tax return - and it's rather simple and easy to do.  All you have to know is your bank name and address, your account number, and the highest amount that was in each foreign account at any one time during the year.  If you switch banks (within or without the same foreign country) or even move the same money to a different account number in the same bank, then you just add that information too [which might appear to outsiders that you have almost double the money but it really makes no difference as the filings are simply informational (for interest reporting on foreign accounts, you simply do that on your tax return the same way you'd report interest of any US bank account)].  Of course, if you never have more than $10,000.00 in foreign accounts at any one time during the year, you don't have to file any forms (but you still report any interest earned on your annual income tax return like you've always done). 

Filing the FBAR does not satisfy all the FATCA requirements.  It used to be all you needed to do but now FATCA has additional requirements, many, complex.  Best if you can keep balances below FATCA reporting limits then you can just do FBAR.  Even better to stay below FBAR limits and not file anything as you mentioned.

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CMBob    693
4 hours ago, Dante99 said:

Filing the FBAR does not satisfy all the FATCA requirements.  It used to be all you needed to do but now FATCA has additional requirements, many, complex.  Best if you can keep balances below FATCA reporting limits then you can just do FBAR.  Even better to stay below FBAR limits and not file anything as you mentioned.

With respect to what an individual has to do, you're wrong....only need to file the FBAR (online ) if your foreign accounts (bank accounts, investment accounts, etc.) exceed $10,000 at any one time during the year and only need to attach the 8938 form to your income tax return if your foreign accounts totalled $50,000 or more at the end of the year or $75,000 or more at any one time during the year. That's all that an individual has to do (other than report interest earned as usual in your annual tax return) and it's very easy to do.  As to what banks have to file, that's not an individual's concern.

 

Actually, only the 8938 form is under the FATCA statute whereas the FBAR  (now really titled a FinCen 114) was required by a separate statute (comment made although not all that relevant).

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Dante99    1,775
1 hour ago, CMBob said:

With respect to what an individual has to do, you're wrong....only need to file the FBAR (online ) if your foreign accounts (bank accounts, investment accounts, etc.) exceed $10,000 at any one time during the year and only need to attach the 8938 form to your income tax return if your foreign accounts totalled $50,000 or more at the end of the year or $75,000 or more at any one time during the year. That's all that an individual has to do (other than report interest earned as usual in your annual tax return) and it's very easy to do.  

Can't argue with that except I do not see why any of it means what I wrote was wrong about what an individual has to do.  What ever, it is all just about the US wanting to control the world banking system and triggered by UBS stupidity and greed.  May they both rot in hell.

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bluweyze    168

I just explained my experience. I have had and still have accounts at the bank for 9 years, I have opened almost 30 accounts for clients during the last 3 years and suddenly this week (with a Swiss client) I hit this 'money laundering/anti-terrorist' new set of rules. Finally after a day I got hold of the new set of rules (because strangely enough the Swiss embassy did not want to know about producing any letter or form) and as a company director I could sign a letter stating what the bank account was for, give the bank, yet another, set of company documents and get the account open. The rules have changed (at least in Bangkok Bank) and others may hit problems in the future. A poster said my post had 'no foundation' well time will tell! I was earlier told I was off my head suggesting the new build in Maerim was to be a PT station...hmmm the tanks have gone in, the pumps will soon be installed and I'll still be off my head because it really is a Big C!!

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NancyL    6,821
22 hours ago, scottiejohn said:

.......

As an ex banker all I can say is that FACTA for a non US citizen is horrendous. How US citizens handle it is beyond me.

As a side note:  In many circumstances UK expats do not need/will not have to pay tax on foreign earnings, my understanding is that it is only in exceptional circumstances that a US expat can avoid paying tax on foreign income, hence the Foreign Account Tax Compliance Act (FATCA) 

As was pointed out by another poster, compliance with the requirements of FATCA really isn't difficult for U.S. citizens -- the filing is all done on-line and if you keep your bankbooks up-to-date, it's just a matter of rounding them up, scanning each for the high balance the previous year and filing out the online form.  It's a bit of a pain when you have signature authority for an account (like for a club), but no ownership rights and still have to report that bank account and the club treasurer doesn't understand why you want to know the high balance, account number and address of the bank branch, also, but oh well.  

 

All the banks in Thailand are in compliance and now report this information to the IRS for U.S. citizens.  They want to know if someone is a U.S. citizen, even if they opened their account using a non-U.S. passport, which may explain why Bangkok Bank is asking a Swiss national for documentation that they are really a Swiss national since people do have dual citizenship.

 

As for U.S. expats avoiding paying tax on foreign income, I refer you to the  Thai-U.S. Tax Treaty https://www.irs.gov/pub/irs-trty/thailand.pdf

 

and the paragraph-by-paragraph explanation of this treaty by the IRS in plain English

 

https://www.irs.gov/pub/irs-trty/thaitech.pdf 

 

Americans working overseas can elect not do not pay U.S. taxes on their first $100,800 of earned income (IRS Form 2555) and retirees with private pensions who are "substantially" living in Thailand can claim Thai residency for tax purposes, file both Thai and U.S. income tax returns and claim their private pension income on their Thai tax returns.  Pension income isn't taxed in Thailand.  Social Security and other gov't pension income has to be claimed on the U.S. tax return.  

 

So, contrary to popular belief Americans don't have to pay taxes on all income, no matter where in the world it is earned and there are some tax advantages for Americans living overseas.

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Dante99    1,775
27 minutes ago, opalred said:

maybe attitude has something to do with it  

 

Bingo

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Rimmer    4,235

A post ending in a personal flame of another member has been removed

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CMBob    693
8 hours ago, Dante99 said:

Can't argue with that except I do not see why any of it means what I wrote was wrong about what an individual has to do.   

Not intending to argue with you but I posted some time ago (and again on the prior page) what an individual (referring to a US citizen) has to do...I have no idea what a non-US citizen has to do or not do).  You wrote: 

                "Filing the FBAR does not satisfy all the FATCA requirements.  It used to be all you needed to do but now FATCA has additional requirements, many, complex."

 

You're correct that filing the FBAR (now FinCen114 form) isn't all an individual has to do if one has foreign accounts of more than $50,000 at the end of the year or has more than $75,000 in foreign accounts at any one time of the year; but, I already pointed that out a couple of times.  In that later case, US citizens also have to fill out and attach the 8938 form to their US tax return.  But that's all a US citizen has to do, there are no other requirements, and it's hardly complex (in fact, it's very simple and easy).

 

Nancy points out that if you are a signatory on someone else' account (or, for example, on an organization's account), then you have to provide that information too on the forms.  But even that's easy to do (so long as you know the bank name, account name, account number, bank address, and the high amount of the year).

 

When I file the FBAR online each year, it takes me less than 10 minutes (and that's taking my time).  When I fill out the 8938 form which is attached to my annual 1040 (that's a US income tax return), it takes even less time than that (as I just copy the info from the FBAR I already filed).  

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Dante99    1,775
8 hours ago, CMBob said:

Not intending to argue with you but I posted some time ago (and again on the prior page) what an individual (referring to a US citizen) has to do...I have no idea what a non-US citizen has to do or not do).  You wrote: 

                "Filing the FBAR does not satisfy all the FATCA requirements.  It used to be all you needed to do but now FATCA has additional requirements, many, complex."

 

You're correct that filing the FBAR (now FinCen114 form) isn't all an individual has to do if one has foreign accounts of more than $50,000 at the end of the year or has more than $75,000 in foreign accounts at any one time of the year; but, I already pointed that out a couple of times.  In that later case, US citizens also have to fill out and attach the 8938 form to their US tax return.  But that's all a US citizen has to do, there are no other requirements, and it's hardly complex (in fact, it's very simple and easy).

 

 

 

 

Very simple and easy if you only have bank accounts to report.  What about if you have other reportable assets of which there are many and some complex like ownership or part ownership of foreign corporations, trusts, real estate, safe deposit box stashes, LLPs, foreign securities accounts .......?  I have looked at all the stuff they want reported and if you had half of it reporting would not be simple and easy.  Just my opinion of course.

 

 

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BANGKOK 22 September 2017 06:09
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