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‘Tis the season for giving – and for plenty of business owners, that means giving gifts to staff and clients. On the personal front, there are many opportunities to donate to worthy causes at Christmas time, and of course, throughout the year, as well.
Not only do making donations help you feel good, but many are tax deductible, proving an extra incentive to give a little. Yet not all gifts and donations are tax deductible.
Want to know what’s tax deductible with gift giving and donations and most importantly, what’s not? Read more from the Gold Coast Tax Accountants at Crest, to find out.
Are GoFundMe donations tax deductible?
Only donations made to Deductible Gift Recipient (DGRs) are tax deductible. You can check an entity’s DGR endorsement by searching their ABN on ABN Lookup. Unfortunately, donations made to personal GoFundMe fundraisers (rather than a charity fundraiser) are not usually DGRs and therefore are not tax deductible.
On the other hand, GoFundMe charity fundraisers, which are so far only available in the US, UK, Australia and Canada, are tax deductible, with tax receipts automatically issued by GoFundMe’s charity partner, PayPal Giving Fund.
Of course, you can always check with your Gold Coast Tax Accountant, if you’re unsure if any of your donations or gifts are tax deductible.
What donations aren’t tax deductible?
In a nutshell, anything that provides you with a benefit, like the cost of raffle tickets, fund raising dinners, membership fees or events like corporate golf days. Nor are donations made under a salary sacrifice arrangement, or under a will.
As mentioned above, donations to an entity that is not an endorsed DGR aren’t deducible either.
Answering your questions on gifts for employees and clients
It’s been a long, hard and likely unpredictable year for your business. Regardless, it’s always well received to thank your employees and clients by showing them how appreciated they really are with a gift.
We’ve compiled some key points you need to know to be tax-savvy with corporate gift giving this Christmas time.
Employers giving gifts to employees
Yes – this is allowed, but there are certain tax implications to be mindful of. For non meal entertainment gifts like Christmas hampers, theatre tickets or wine:
If a gift is valued at over $300:
- Fringe Benefits Tax is payable
- The cost of the gift is tax deductible
- GST credits are claimable
If a gift is valued at under $300, the “minor benefit exemption” may apply which means:
- No Fringe Benefits Tax payable
- The cost of the gift is not tax deductible
- GST credits are not claimable
More on the minor benefit exemption
The minor benefit exemption may apply to a benefit provided to an employee or associate if all of the following apply:
- The taxable value of the benefit is less than $300
- The type of benefit is provided infrequently and irregularly
- It’s difficult to value the benefit & associated benefits
Keep in mind that the minor benefit exemption doesn’t apply to all types of benefits provided to employees – for example it can’t be used for meal entertainment fringe benefits where the 50/50 split method is used.
What about giving gifts to clients or suppliers?
Here’s the good news – non entertainment gifts given to clients (like Christmas hampers or wine)
- Do not attract Fringe Benefits Tax
- Are tax deductible
- GST credits are claimable
What about recreation type gifts, like theatre or movie tickets?
- Do not attract Fringe Benefits Tax
- The cost of the gift is not tax deductible
- GST credits are not claimable
Need further clarification? Your local Gold Coast Tax Accountant will help you understand tax-effective strategies for you, and your business.
Seek clarity this silly season. Contact Crest Accountants today.
Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice.
