Reader question: How to deal with savings in Thai bank account?

Then with a 1-year fixed interest rate at 1,5%, you earn slightly more than the tax you have to pay on your savings (roughly 1%). As of 1-1-2001, the Dutch tax authorities assume a return of 4% on your savings. Even in 2001, with an average interest rate of roughly 2,5%, that was utopian. Either they wanted to force citizens to buy shares or it was yet another unreasonable tax. Do inquire at the bank whether deposits to foreign banks are possible at all and, if so, up to what maximum amounts. And whether there are costs involved, otherwise the interest earned will still be lost if the money has to be used elsewhere in the world.

Day Kees 2,

The reader question is: “How to deal with savings in Thai bank account?”
This message shows that questioners H&P have had a Thai bank account for several years. Then they ask themselves:
• whether it is wise to make additional contributions and
• how 'visible' this activity is for the poorly functioning Dutch tax authorities.

Erik answers the last question in particular correctly and as I have come to expect from him, that H&P must declare this foreign capital in the Netherlands. He then points to the possible consequences of concealing this ability.

You respond to this with: “As far as tax is concerned: Erik is overlooking something: with the new box 3 tax starting in 2022, you do not pay tax on ordinary savings over the first 400.000 euros.”

However, not Erik, but you are completely overlooking something: you are way ahead of the music and play a very wrong note. That can create a predicament. Repeatedly I try to get readers of Thailand Blog to understand the difference between “tax liability” and “declaration obligation”, which Erik writes about and “tax debt” (or lack thereof), which you point out. With the latter you are a few streets away! So take it from me that Erik, when it comes to tax matters, only writes sensible things, which you better not "correct" without confusing H&P and which has therefore happened, given the reaction to your message!

Increasing the tax-free sum of box 2022 with effect from tax year 3 has nothing to do with the tax and declaration obligation and that is what this is all about.

In the Netherlands, the number of criminals is increasing day by day. It could well be that H&P will also fall into this category by concealing their foreign assets. You wouldn't want to put them on this track with your comment about the increased exemption, would you? Then you take a great responsibility on your shoulders. The comment by H&P (Hans de K) that the “news about 2022” is a “boost” for him worries me.

Tax evasion (because that is what we are talking about after all) is an economic offense and is punishable by a (often high) fine or imprisonment.

The chance of being caught for these types of economic crimes is increasing. A complete data exchange of bank data already takes place within the EU. Think of the CRS which is included in an EU directive. The OECD has developed and rolled out the CRS around the world for the same purpose. More than 100 countries are already participating. Thailand not yet, but how long will it take before Thailand also joins? That could very well be the case within, for example, 8 years and then Leiden (and even the entire Randstad) may be in trouble!

The number of bilateral treaties concluded by the Netherlands is also constantly increasing. In the context of the treaty negotiations with Thailand to arrive at a new treaty for the avoidance of double taxation, the exchange of bank details will certainly also be discussed. But, as Erik also pointed out, the current Treaty also offers the possibility to the Dutch Tax and Customs Administration to request the necessary data from the Thai Revenue Department, in particular to prevent fraud.

As of January 1, 2018, the so-called “disclosure scheme” for previously concealed income from savings and investments abroad has been abolished. If now (or in, for example, 8 years' time) this form of fraud is discovered by the tax authorities, you can count on additional tax assessments that can go back up to 12 years, plus a fine of 300% and tax interest. And then you are lucky that it is completed within the scope of the administrative fines. If it is lifted to criminal law, then you are “further from home”. That "house" could well be the penitentiary "De Marwei" in Leeuwarden.

H&P opened the Thai bank account two years ago. It will also take about two years before the increased exemption will take effect. In view of the expected exchange of bank data between the Netherlands and Thailand in the long term and the possible additional assessment period of 12 years, the question is whether it is wise to conceal the assets placed in Thailand from the Dutch tax authorities, thereby taking a major risk. . I advise against them and all that apart from the unethical behavior associated with tax fraud!

100% additional assessment + 300% fine + tax interest = “Repentance comes after Sin”.