IRAS | Gifts and samples

If you give away gifts or samples as part of your business, you may need to account for GST depending on the value and whether you claimed input tax.

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When you must account for output tax on gifts

You must account for output tax based on the open market value (OMV) of goods given away for free when:

The total cost of gifts to the same recipient for the same occasion exceeds $200 (excluding GST)
You claimed input tax when you bought or imported the goods. If you imported the goods with GST suspended under schemes like the Major Exporter Scheme (MES), input tax is still considered claimed.

You should account for the output tax in the GST period in which the gift(s) are given.

You do not need to account for output tax if:
a. The total value of your gift(s) (excluding GST) per occasion per recipient is $200 or less; or
b. You did not claim input tax on the purchase or import of the gift(s).

Examples: Same recipient or same occasion

Example 1: Gifts below $200 threshold per customer

You gave New Year hampers (cost $150 + GST $13.50 each) to two different customers. You do not need to account for output tax because the cost of each gift is not more than $200, even if you had claimed input tax on the purchase.

Example 2: Same customer, different occasions

You gave Company A two hampers (cost $150 + GST $13.50 each) - one for New Year's Day and another for Chinese New Year. You do not need to account for output tax because the gifts are given for different occasions, and the cost of each gift is not more than $200.

Example 3: Different departments of the same customer, same occasion

You gave two New Year hampers (cost $150 + GST $13.50 each) to different departments in Company B. These are regarded as gifts to the same recipient for the same occasion, with a total cost of $300.

If you had claimed input tax on the purchase, you must account for output tax of $27 (9% of $300).

Example 4: Gifts given across different accounting periods

You gave two New Year hampers to Company C:

Hamper 1 (cost $100 + GST $9) in December 2024
Hamper 2 (cost $200 + GST $18) in January 2025.

If you had claimed input tax on the hampers, you must account for output tax because the total cost of gifts given for the same occasion exceeds $200. You should account for output tax in the accounting period in which each gift is given:

$9 in accounting period ending 31 Dec 2024
$18 in accounting period ending 31 Mar 2025

Exceptions: Gift vouchers and goods given away with purchases

The gift of vouchers is considered a supply of a right, which is a supply of services. Therefore, deeming of output tax is not required.

If you offer your customer a free product after buying products of a certain value, the free product is treated as being sold as a package. Therefore, you will only need to account for GST on the price paid by the customers. For example, if a customer pays $100 for Item A and gets Item B free, you should account for GST on the $100 which is considered as the total price for Items A and B.

Determining the OMV of goods intended as gifts

When you purchase goods from an unrelated supplier with the intention of giving them away as gifts, you do not need to determine the prevailing market price of the goods at the time they are given away. For ease of compliance, you may use the purchase price paid to your supplier as the OMV to account for output tax.

You do not need to perform additional checks against publicly listed prices or recommended retail prices from other suppliers.

Example: Determining the OMV for goods intended as gifts

You purchased 25 hampers at a discounted price from an unrelated supplier for the purpose of gifting them to your customers at a company event.

You paid $1,090 per hamper (total cost $25,000 + GST $2,250) and claimed input tax in the GST accounting period ended 30 Jun 2025. You gave away the hampers in the accounting period ended 31 Dec 2025.

As the cost of the gifts is more than $200 and you had claimed input tax, you are required to account for output tax on the deemed supply.

As the hampers were purchased with the intention of being given as gifts, you do not need to determine the prevailing market price at the time they are given away (i.e. in Dec 2025).

You may treat the discounted purchase price of the hampers as the OMV and account for output tax of $2,250 in the accounting period ended 31 Dec 2025.

Determining the OMV of goods that were not originally purchased as gifts

If you give away goods that are:

Not originally purchased as gifts; and
Held or used as business assets before being given away,

you must determine the OMV at the time the goods are given away, based on the price of identical or similar goods.

Example: Determining the OMV for goods not originally purchased as gifts

You purchased a laptop at $2,180 (cost $2,000 + GST $180) for business use in Dec 2024 and claimed input tax in the accounting period ended 31 Dec 2024.

In the accounting period ended 31 Mar 2026, you gave your used laptop away for free to your employee.

As the laptop was not originally purchased as a gift and was used as a business asset before being given away, you must determine the OMV at the time of giving away. Based on checks from online sources, you determined that the market price of a laptop of similar age and condition was $900.

Since the cost of the gift exceeds $200 and you had claimed input tax, you are required to account for output tax of $81 based on the OMV of $900 in the accounting period ended 31 Mar 2026.

How to account for output tax

You have 2 options:

Option 1: Pay the GST yourself

Calculate output tax at 9% of the open market value of the gifts(s)
Report the open market value of the gift(s) (excluding GST) in Box 1: Total value of standard-rated supplies
Report the output tax amount in Box 6: Output tax due

Option 2: Ask the recipient of the gift(s) to pay

Calculate output tax at 9% of the open market value of the gifts(s)
Request payment of the output tax from the recipient
Issue a tax certificate to the recipient, if they are GST-registered. The recipient can then claim this as input tax if they meet the conditions for claiming input tax

Tax certificates

Unlike normal transactions, you should not issue a tax invoice to the recipient of the gift. However, if you are recovering the GST from the recipient, you may issue a tax certificate.

You can only issue tax certificates if:

The recipient is GST-registered; and
The recipient pays you the output tax.

The tax certificate can be used by the recipient to support their input tax claims.

The tax certificate must include:

The words "Tax Certificate"
Description of goods and GST amount based on open market value
The statement "Deemed GST on this supply is paid by the recipient"

When you must account for output tax on samples

You must account for output tax based on the open market value (OMV) of samples unless they are:

Given to existing or potential customers, and
Not in a form normally available for public sale and clearly marked "Not for sale" or "Sample only"

If these conditions are not met, you must account for output tax on the samples using the same rules as gifts.

Free catalogues given to customers to promote sales can be treated as commercial samples. You do not need to charge and account for GST when you give these away.