The Revenue Department is requiring depositors who do not want their interest income information to be submitted to the department to declare their intention to deposit-taking financial institutions between May 7 and 14.
The requirement is to comply with the amended notification of the department’s director-general, applied retroactively since April 4.
The tweaked notification is a win-win situation for depositors, financial institutions and the Revenue Department, said director-general Ekniti Nitithanprapas.
The department recently decided to rejig its disclosure requirement by asking depositors who do not want their interest income information to be submitted to the department to declare their intention to banks, aiming at easing public outcry and making it more convenient for depositors, most of whom earn interest of less than 20,000 baht a year.
The department’s director-general issued a notification on April 4 demanding that all depositors offer permission for banks to report their interest income information. Those with an annual interest income of below 20,000 baht were also required to consent in exchange for maintaining the 15% withholding tax interest income waiver.
The department’s requirement for interest income data is aimed at closing a loophole used by some depositors to avoid paying the 15% withholding tax on interest.
Given the lack of depositor information of other banks, deposit-taking financial institutions withhold the tax when their depositors earn interest starting from 20,000 baht a year and this allows some depositors to break up deposits into several banks' accounts.
Mr Ekniti said that the interest income data will allow the Revenue Department to be able to specify which depositors are liable to the 15% tax.
The latest notification also requires banks to submit electronic-based interest income information in lieu of paper-based documentation.
With the electronic-based data, it would be convenient for banks to file such data, while the Revenue Department can better pinpoint depositors earning interest income of 20,000 baht per year or above, Mr Ekniti said.
