Providing samples and gifts to prospective clients is a common practice in the course of business development. Besides that, during festive season, companies may purchase hampers or gifts to appreciate their customers for the continued support. The goods that are given away for free are considered as a supply to the client.

Purchasing of Gifts to be given out to client:

Purchasing gifts from a GST-registered company or importing the gifts into Singapore, the GST can be claimed as the input tax when all conditions to claim input tax is met.

Gifts that are given away have to be accounted for the output tax unless:

  1. The gift is less than $200 (exclude GST) or;
  2. You did not claim for the input tax regards to the purchase or import of the gifts.

Example 1:

You give away 2 hampers (Cost: $250 + GST $17.50) to Company A. Both Hampers arrived at the company on 24 Dec 2018.

You have decided to claim input tax of $17.50 for the hampers. Therefore, while filing for the GST return, you will need to account for the output tax of $17.50 since the gift is more than $200.

Example 2:

You give away 2 hampers (Cost: $250 + GST $17.50) to different departments in Company B. You have claim input tax of $17.50 for the hampers. Therefore, you will need to account for the output tax of $17.50, since the gift is more than $200.

Example 3:

You give away 1 hamper (Cost: $180 + GST $12.60) to Company B and Company C respectively. Both Hampers arrived at the company on 24 Dec 2018.

You have decided to claim the input tax of $12.60 for the hampers in the GST return. However, you do not need to account for the output tax as the value to each customer is less than $200.

Giving out Samples to prospective clients

Samples that are given out to customers are required to be different from the actual products. They should be packed in a form that is not available for sale to the public and in a reduced version compared to the actual goods for sale. Wording such as “Sample Only” or “Not for Sale” have to be marked on the samples.

GST is not chargeable on the samples when it is given to actual or potential customers.

Have any Questions?

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