Thailand’s tax information exchange legislation
The pretty secret Thai bank account
With respect to banking secrecy and privacy of tax information, Thailand has always and is still a highly attractive jurisdiction. Although Thailand signed agreements to join CRS and FATCA, the grade of implementation is weak or none. Therefore, a Thai bank account has characteristics which can hardly be found in other jurisdictions, even in offshore locations.
Under the OECD’s Common Reporting Standard (CRS) the participating jurisdictions are required to obtain certain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. The CRS framework sets out
- the financial account information to be exchanged,
- the financial institutions required to report,
- the different types of accounts and taxpayers covered, as well as
- common due diligence procedures to be followed by financial institutions.
Under the U.S. Foreign Account Tax Compliance Act (FATCA), all non-U.S. financial institutions are required to report the assets and identities of U.S. persons to the U.S. Department of the Treasury. FATCA also requires U.S. persons to self-report their non-U.S. financial assets annually to the Internal Revenue Service (IRS).
A brief history of Thailand’s anti-tax evasion and tax information exchange legislation
18/03/10: The U.S. implemented the Foreign Account Tax Compliance Act (FATCA) without the participation of Thailand.
15/07/14: OECD implemented the Common Reporting Standard (CRS) framework without the participation of Thailand
14/03/16: U.S.-Thai Model I Intergovernmental Agreement to implement FATCA rules in Thailand (text). The agreement is not implemented into Thai legislation and, therefore, has no direct effect on the reporting obligations. Thai banks typically act in compliance with the FATCA rules for U.S. account holders.
26/01/17: Thailand has joined the Global Forum on Transparency and Exchange of Information for Tax Purposes as its 139th member. Its membership reinforces its commitment to implement both the international standard of exchange of information on request and the standard of automatic exchange of financial account information. This has no direct impact on the reporting requirements.
01/04/17: Amendment of the Thailand Revenue Code to include a certain scope of tax evasion as a predicate offense under the Anti-Money Laundering legislation. Threshold amounts of THB 10 million (tax evasion) and THB 2 million (fraudulent refund).
24/07/18: Proposed amendment of the Thailand Revenue Code to provide and receive tax information and certain confidentiality provisions. This is just one more draft.
2022: Expected legislation to annually and automatically report financial information under the CRS standards.
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PUGNATORIUS Ltd. offers smart solutions to successfully set-up and maintain bank accounts in the land of smile.
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