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11 February 2021

Tax Treatment of Gifts for Employment Records

 

With the Chinese New Year rolling around and the impending deadline for employment income submission, it is wise to check if there were any gifts awarded last year to employees you might have forgotten to include in the tax declaration.

Gifts such as red packets given during Chinese New Year are not taxable if the Ang Bao value is not exceeding $200 and are generally available to all employees. However, once they exceed $200, the full value is taxable. This is also true for gifts, both monetary and non-monetary, given on other festive occasions such as Hari Raya, Deepavali, and Christmas. The cap is applicable per occasion, not throughout the year. 

For instance, an employee received $150 gift for New Year, $288 Ang Bao for Chinese New Year, and $168 gift for Christmas in 2020. Only the full value of Ang Bao ($288) is taxable in this example.

 

Which form to declare the gifts?

Taxable gifts shall be declared in Appendix 8A form and IR8A forms. For non-monetary gifts that exceed $200, you can file this value under Appendix 8A form item “j. Other Non-monetary awards/benefits which do not fall within the above item”. And this amount shall also be reflected together with other benefits-in-kind given to the employee in IR8A form “d) Others > 9. Value of Benefits-in-kind”.

On the other hand, monetary gifts that exceed $200 can be filed directly in IR8A form under item “d) Others > 1. Allowances > (iii) Others”.

You can read more details about Tax Treatment of Gifts on IRAS website:

https://www.iras.gov.sg/IRASHome/Businesses/Employers/Tax-Treatment-of-Employee-Remuneration/Gifts/

 

WhyzeHR HR & Payroll software streamlines the income tax filing process as both Income Tax and Payroll modules are integrated seamlessly. With a few clicks of buttons, employees’ income details will be captured automatically in the relevant tax form.

 

Contact us (6838 0161) to find out how WhyzeHR HR & Payroll system can help you in your employee income tax filing or email your enquiry to enquiry@whyze.com.sg