2020 is a tough year for everyone but a Christmas and Year End Plan should still be in place to reward all the hard works and efforts; your clients, your employees and yourself have put in to endure this difficult time. Surely, this year will be a bit different from the past years. You might not be able to gather as a big group or hold large parties due to the COVID restrictions and alternative arrangements will be likely. Hence, we are here to remind you of the applicable tax implications.
Thank-you gifts for your loyal clients? Go ahead!
When gifts purchased are not considered entertainment, you can claim 100% tax deductions of the gifts you purchased for your clients to maintain the long-term business relationship. Gifts that are of non-entertainment in nature would generally be things like a voucher, chocolate box, and hamper. There is no limit on the value of the gift as long as the value is reasonable. Still unsure? Give us a call to find out.
Throw a Christmas and Year End Party for your staff (in accordance to the COVID restrictions)
I am sure you are excited to meet your staff in person if you have been working remotely during most of the year. Want to meet them in person and hold a Christmas and Year End Party up to the limit of people in a gathering? Not a problem. Keep in mind of the $300 per head limit to avoid Fringe Benefit Tax (FBT) implications. By the way, did I mention these are not tax deductible?
Gifts to your employees for their hard works via courier
That would be nice! The only thing for you to remember is to keep it below $300 per employee for the total value of gifts purchased. Unfortunately, these gifts are only tax deductible to the employees if they are of non-entertainment nature.
Disclaimer
This publication is intended as a general commentary only and does not purport to be comprehensive. It should not be regarded as tax advice and you should not act solely on the information contained herein. Please contact AscendPoint to further discuss about your circumstances or concerns.