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Implied Consent on Disclosure of Banking Information

On 3 May 2019, the Revenue Department issued an Announcement of the Director General concerning income tax (No. 346) requiring all commercial banks in Thailand to submit taxpayers’ information in all bank accounts to the Revenue Department unless the taxpayers would specifically prohibit the banks from doing so. The purpose of which is to allow the Revenue Department to calculate total amounts of interest received by each individual taxpayer to determine his / her eligibility for the withholding tax exemption on interest (not exceeding Baht 20,000 in total). Taxpayers, who instruct the banks not to submit their information to the Revenue Department, will be subject to 15% withholding tax on interest.

While this legislation is intended to facilitate the taxpayers, wishing to claim the tax exemption on interest, it imposes disclosure requirement on all commercial banks even if those taxpayers have never consented to such disclosure. This “implied consent” approach has been adopted without a clear legal authority granted in the Revenue Code (remark: such authority is generally limited to a specific case where there is reason to believe that there is a wrongful tax payment).

Surprisingly, no objection was raised by any commercial banks or banking associations or by taxpayers wishing to preserve their bank secrecy rights.

By Prof. Piphob Veraphong and Rachanee Prasongprasit

(as at 10 May 2019)

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