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Thai Bank Accounts for Retirees: Tax Reporting for Americans

Transcript of the above video:

As the title of this video suggests, we are discussing bank accounts here in the Kingdom and we are going to be talking about this with the specific focus on tax reporting obligations because there has been some rather major changes since 2018.

Most notably in late 2018 it was announced, and this is specifically an American context video, it was announced that the American Embassy here in Thailand  would no longer issue notarized Affidavits of Income which would then be certified by the Ministry of Foreign Affairs and thereafter be used in support of an application for a retirement visa extension. 

Now this is a major sea change or was a major sea change; this basically upended about 30 years of practice with respect to how Retirement visas were issued based on these Income Affidavits. The upshot, in my opinion, is in the past they were folks that were just using the Income Affidavit and they weren't really doing their banking here in Thailand and for them that was relatively convenient especially folks who were retired and receiving Social Security into their US account.  They would just use their debit cards at ATMs and at various places here in the Kingdom, use it kind of like a credit card, use it to pull out some "walking around money" for lack of better term and you know just kind of get on with their lives; they didn't really have any dealings with the Thai Banking Institutions.  

Well now that Income Affidavit are no longer a possibility, those who are looking to extend their status here in the Kingdom in retiree status, need to go ahead and have a bank account to either receive 65,000 baht a month in income or a minimum balance of 800,000 baht for five months out of a given year with 400,000 baht throughout the entire calendar year; for more explanation on that. There are other videos on this channel to dive into the specifics of how the five months works and when it has to be in there versus the 400,000 and when it needs to be topped back up; I'm not going to go back over that in this video.  

In this video what I want to make clear is even 400,000 baht triggers certain mechanisms with respect to reporting requirements for Americans who have overseas bank accounts. Basically American citizens that have overseas bank accounts, accounts outside the United States, with a balance of more than $10,000 in the aggregate, so multiple bank accounts that have you know a few thousand here, a few thousand there, if it adds up to 10,000 total, it is not just one account, but if it adds up to 10,000 total in the aggregate being held in bank accounts outside of the United States,  you're going to have to go ahead and report that to the Treasury Department, the FinCEN; you are going to have to do a FinCEN report basically; generally speaking this is done sort of in conjunction with filing ones tax returns. This could have major implications for those Americans who now have to restructure their Thai retirement situation because they need to go ahead and set up a bank account here, go ahead and get the funds moved in; yeah it's going to create a reporting requirement for those individuals, again this is a video targeted specifically at Americans here in the Kingdom, and yes, moving forward I think it is going to be required that disclosure be made with respect to those accounts. 

Another thing to keep in mind or something that should be noted I should say,  a couple years ago I can't exactly remember exactly when it was, but there was an inter treasury Ministry of Finance memo that was countersigned between the United States and Thailand which basically results in Americans' Bank information will be shared with the Treasury Department.  So you know, not that it is ever a good idea to hide from one's requirements especially with respect to tax obligations that one can be penalized for, it is notable that there's really no hiding from this once you get your 800,000 baht in a bank account or 400,000 baht if you're married to a Thai National, anything over 10,000 US$ in the aggregate, either one of those amounts goes over that particular number, so long as it goes over that number it needs to be reported and as I said they are already sharing this information so you know it just needs to be done.

So the thing to take away from this video is on the one hand yes I am sure it is very stressful for some of the viewers who are watching this video to have to restructure a substantial part of their financial life possibly in order to be more in line with Thai immigration regulations. You also now have to keep in mind that you have gotten American tax regulations that also have to be dealt with when you are making these plans and these changes with respect to money in a bank account here in the Kingdom of Thailand.