There are no gift taxes in Singapore. Gifts given in conjunction with holidays, for the employee's birthday or wedding, or for the birth of the employee's child are not taxable, unless deemed to be significant in value and if the gifts are generally available to all staff. You must file a return on your income tax returns stating the nature and amount of foreign-sourced income that was remitted to Singapore. From the Company's perspective, expenses related to donations to staff are tax-deductible, as they are considered staff welfare costs.
Depending on the situation and the value of the gifts, some gifts given by employers to employees may be taxable in Singapore. Gifts to customers are generally deductible for businesses if they are incurred in revenue production. If property is transferred to another person as a gift and no consideration is paid to the landlord or if the property to be given as a gift will be distributed without a will, intestate succession law, or Muslim inheritance law, current stamp duty rates will apply. Singapore tax authorities will conduct audit checks on all documents related to transfers of goods or shares as gifts.
At this time of year, it's common for companies to give gifts to their customers and customers as an act of goodwill and appreciation for their support of the business. If you are a foreigner thinking about setting up a business or as an individual in Singapore, it is essential to have tax advice on tax residency in Singapore, the source of income and the incentives for your company or personal tax planning. There are several types of tax incentives available to businesses and are provided in the Singapore Income Tax Act (ITA) and the Incentives for Economic Expansion Act (EEIA). It makes clear the tax rights between Singapore and its partner in the treaty on the different types of income derived from cross-border economic activities between the two countries.
GST is charged at 7% for the supply of goods and services performed in Singapore by a taxable person in the course or promotion of his business and the importation of goods to Singapore. These companies can, in turn, claim the GST accounted for as their input tax, subject to normal rules for the recovery of input tax. It is also important for the gift giver to keep all documents related to the transfer of the gifts up to date. As an administrative concession, the IRAS has agreed that if input tax on the cost of gift items is not claimed, the output tax is not required to be taken into account.
When real estate or shares are given as gifts, they are also taxed differently compared to most other gifts.