Businesses may provide gifts and samples to their clients or prospective customers in the course of their business activities. Goods that you give away for free are treated as a supply that you make to the recipient.
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Claiming input tax for purchase of gifts

You may incur GST when you purchase the gifts from GST-registered suppliers or import the gifts into Singapore. You can claim the GST incurred on the gifts as input tax, provided that all the conditions for claiming input tax are met.

Accounting for output tax on gifts

When you give away gifts for free (for example, to your customer or your staff), you will need to account for output tax based on the Open Market Value (OMV) of the gifts if:

  1. The total cost of the gift(s) is more than $200 (excluding GST);
  2.  The gifts are given to the same recipient for the same occasion; and 
  3. You have claimed input tax on the purchase or import of the gift(s). If you imported the gift(s) with GST suspended under a GST scheme such as the Major Exporter Scheme (MES), input tax is still regarded as claimed. 

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

To account for output tax, you can either:

  1. Bear the output GST and pay the amount to IRAS. You should report the value of the gifts (excluding GST) in Box 1: Total value of standard-rated supplies and the corresponding GST amount in Box 6: Output tax due; or
  2. Issue tax certificates to the recipients and request them to pay the output GST to you. The recipients (if they are GST-registered) may claim the GST paid as input tax, if the conditions for claiming input tax are met.

 

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).

Example 1: Gifts exceeding $200 in total given for the same occasion but to different customers

You gave New Year hampers to your customers.

  • Hamper 1 (cost $150 + GST $13.50) was delivered to Customer C on 5 Jan 2025; and
  • Hamper 2 (cost $150 + GST $13.50) was delivered to Customer D on 15 Jan 2025.

Even if you had claimed input tax of $27 on the hampers, you are not required to account for output tax since the cost of each hamper given to the two different customers is not more than $200.

Example 2: Gifts exceeding $200 in total given to the same customer but for different occasions

You gave two hampers to Company D:

  • Hamper 1 (cost $150 + GST $13.50) was delivered on 1 Jan 2025 for New Year’s Day; and
  • Hamper 2 (cost $150 + GST $13.50) was delivered on 29 Jan 2025 for Chinese New Year.

Even if you had claimed input tax of $27 on the hampers, you are not required to account for output tax since the cost of the gift for each occasion is not more than $200.

Example 3: Gifts exceeding $200 in total given to different departments of the customer’s company for the same occasion

You gave New Year hampers to two departments in Company B, who is your customer:

  • Hamper 1 (cost $150 + GST $13.50) was delivered to the Sales department on 5 Jan 2025; and
  • Hamper 2 (cost $150 + GST $13.50) was delivered to the Shipping department on 15 Jan 2025.

The hampers given to the two departments are regarded as a gift of goods to Customer B.

 

If you had claimed the GST of $27 incurred on the hampers as input tax, you will also need to account for output tax of $27 since the cost of the gifts is more than $200. However, if you did not claim the GST incurred on the hampers, you need not account for output tax on the gifts.

    Example 4: Gifts exceeding $200 in total given to the same customer for the same occasion but in different accounting periods

    You gave two New Year hampers to Company A:

    • Hamper 1 (cost $100, GST $9) was delivered on 28 Dec 2024; and
    • Hamper 2 (cost $200, GST $18) was delivered on 2 Jan 2025.

    If you had claimed the GST of $27 incurred on the hampers as input tax, you will need to account for the output tax of $27 (i.e. 9% of $300), since the total cost of the gifts given to the same customer for the same occasion is more than $200.

    You should account for output tax for each hamper in the accounting period when the gift is given, as follows:

    • $9 in accounting period ending 31 Dec 2024; and
    • $18 in accounting period ending 31 Mar 2025.

    However, if you did not claim the GST incurred on the hampers, you need not account for output tax on the gifts.

      Example 5: Gifts exceeding $200 in total where the cost is lower than the OMV

      You gave your customer a New Year hamper that you bought from your long-standing supplier at $327 (cost $300 + GST $27). The publicly listed price of the hamper is $436 (cost $400 + GST $36).

      As the cost of the gift is more than $200, you are required to account for output tax if you had claimed input tax.

      Even though you had claimed input tax based on the cost of the goods (i.e., $27), you are required to account for output tax based on the OMV of the gift (i.e., $36).

        Tax certificate

        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 to the recipient if:

        1. The recipient is GST-registered; and
        2. The recipient pays you for the output tax.
        The tax certificate, similar to a tax invoice, can be used by the recipient to support his input tax claims.

        The tax certificate should include the following:

        1. The words "Tax Certificate";
        2. A description of the goods and the deemed GST amount based on the open market value of the goods; and
        3. The statement "Deemed GST on this supply is paid by the recipient."

        Samples

        You may incur GST when you purchase or import goods that are given away as samples. You can claim the GST incurred on the goods as input tax, provided that all the conditions for claiming input tax are met.

        GST is not chargeable on commercial samples if they are:

        1. Given to an existing or potential customer; and
        2. In a form not normally available for public sale. They should be easily distinguished from actual products available for sale and marked with words such as "Not for sale" or "Sample only".

        If the above conditions are not met, you would be deemed as making a supply to the recipient. You would therefore need to account for output tax on these goods given away for free. Please refer to the GST treatment for gifts. 

        Catalogues that are given free 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.

        FAQs

        1. If I purchased goods to be given away as gifts, can I claim the GST incurred on the purchase?

        The input GST can be claimed if you can satisfy all the conditions for claiming input tax. However, you will need to account for output tax based on the Open Market Value of the gifts, if the cost of the gift is more than $200 (excluding GST).

        2. If I am entitled to claim the input tax incurred on the purchase of goods but chose not to, do I need to account for output tax when the goods are given away for free?

        No, you are not required to account for output tax.

        3. If the recipient of my gifts is not paying for the deemed GST output tax, do I need to issue him with a tax certificate?

        No, you are not required to issue a tax certificate to the recipient of the gifts.

        4. If I give a $300 gift voucher to my customer, do I need to account for output tax?

        No, you are not required to account for output tax on cash vouchers that are given for free as the gift of the voucher is considered a supply of a right and therefore a supply of services. Deeming of output tax is not required for the provision of free services.

        5. If my customer buys a product of a certain value, he will get another one for free. Should I consider the free product as a gift or part of the sales? Do I have to account for GST on the free product?

        The free product is treated as being sold as a package. You will need to account for GST on the price paid by the consumers.

        For example, if you sell a product for $100 and give away a second one for free, you will be treated as having sold 2 items at the price of $100. In this case, you should account for GST on the total consideration of $100 for the 2 items.

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