Payment from employee to retain gifts received from others

Key requirements

A third-party gift received in the course of employment raises an ownership question. To ease the practical difficulty of proving the giver’s intent, IRAS treats a gift retained by the employee as belonging to that employee. Any amount paid to the employer to retain it is treated as a staff-conduct payment and is not subject to GST. If the employee instead surrenders the gift, ownership passes to the employer. A later sale by the employer to another person, including another employee, is taxable and requires GST accounting. Keep the gift-handling record and distinguish the conduct payment from a sale of an employer-owned item. The concession does not make all subsequent disposals of third-party gifts tax-free.