A Comprehensive Guide to Employer Gift Tax Laws

Tax on gifts is a mysterious concept that most organizations—let alone individuals—don't know much about. On personal terms, most gifts aren't considered taxable unless they involve large sums of money or assets that has good value. But in the corporate hemisphere, the gift tax is a ubiquitous headache for accountants, HR, and CFOs.

In the modern age of people engagement through extrinsic motivation, monetary and non-monetary gifts come handy in keeping employees charged up. But the bonus of these gifts is not just on the employer for the sake of gift tax, but it comes on the receiver's shoulders ass/he must figure it out too.  

The global tax system is divided into sovereign boundaries. Each country has its own Internal Revenue Services (IRS) that decide its tax laws, and the tax system always provides clean ways for entities to make the most tax exemptions. Hence, every country has its tax benefits to offer when it comes to gifts.  

What is gift tax?  

The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether or not the donor intends the transfer to be a gift.  

Let's go through the tax laws of these 15 countries to figure out exemptions on employee gifting:  

1. الهند  

Tax Exemption Limit: 50,000 INR Per Capita P/A  

The Income Tax Department of India clearly states that any gift received by an individual from the employer, business partner, friend, kin, or anyone else is exempt from tax up to 5,000 INR for every financial year.  

If the gift value exceeds 50,000 INR, it'll be added to the employer's salary income and taxed accordingly on the total cost of the gift. For detailed information, check out the Official Income Tax Department Website.  

2. الولايات المتحدة  

حد الإعفاء الضريبي: 25 دولارا للفرد P / A  

As per the Internal Revenue Service (IRS) of the USA, "You can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year". Since most gifts given to employees are cash-based or cash substitutes (gift vouchers and branded currency), the IRS labels them as fringe benefits. The fringe benefits, in addition to the usual compensation, are taxable.  

Non-taxable fringe benefits are necessary amenities given by the employer to employees for their healthy being. As per the Global Payroll Association, insurance, accident, health benefits, and even dependent care assistance are some of the few non-taxable fringe benefits. These are excluded from some types of taxes if not all.   

As branded currency and gift vouchers are taxable, their value must be recorded by the employers to pay the proper taxes. Gift card taxation happens the same way as all supplemental wages, subject to federal income, Social Security, and Medicare taxes withholding Federal Income Tax on Gift Cards.

Since branded currencies and cash aren't de minimis fringe benefits, one would have to withhold the Federal Income (22%) and Social Security/Medicare(7.65%) from the given amount along with local and state taxes. The employer can either:‍  

جرب طريقة النسبة المئوية واحجب المعدل الثابت للدخل الفيدرالي والضمان الاجتماعي (29.65٪) من هدية الموظف ؛ أو  

Gross up the value and add above 29.5% to the total gift value. Here's an example from Patriot explaining the grossing up method. Either way, gifts would be taxable as long as they are cash or cash equivalents. For more information, check out the official IRS website of the US Government.  

3. المملكة المتحدة  

The United Kingdom has no tax exemptions on gifts except trivial benefits. According to the IRS of the United Kingdom, there's no need to pay tax on an employee's benefits if all of the following benefits apply:  

• يكلف صاحب العمل 50 جنيها إسترلينيا أو أقل لتوفير  
• إنه ليس نقدا أو قسيمة نقدية  
• إنها ليست مكافأة على عمل الموظفين أو أدائهم  
• ليس من حيث عقدهم  

Note: The only way the tax on gifts is exempted is to make it a trivial benefit if ALL OF THE ABOVE conditions apply. Please go through the Tax on Trivial Benefits Guide on the Official GOV.UK website. As for vouchers exchangeable for cash, they are taxable in employees' hands and add up to their other earnings. However, for non-cash coupons, certain exemptions (the list you can check out here) are disregarded while calculating an employee's earnings. Apart from these exemptions, it's all taxable income.  

يتم احتساب كل من القسائم المذكورة أعلاه كأرباح ، لذلك يتعين على صاحب العمل:  

• Add their value to the employee's other earnings.  
• Deduct and pay PAYE tax* and Class 1 National Insurance through payroll.  
• *PAYE tax is exempted in case of non-cash vouchers.  

4. أيرلندا  

Tax Exemption Limit: €1500 Per Capita P/A  

‍In the Republic of Ireland, a Small Benefit Exemption (SBE) must not be in cash and the combined value of the five benefits cannot exceed €1,500. If more than five benefits are given in a year, only the first five benefits may qualify for the tax exemption.

Unused allowance amounts cannot be carried over. Also, note that this exemption amount is only deemed tax-free if they're gifted in terms of vouchers or benefits, which can be used to purchase goods and services.  

The vouchers, if redeemed for cash, are taxable. The employer can provide long service awards to employees who are not taxable at all. The award is made to mark long service of not less than 20 year and should be tangible (that is, not vouchers, bonds or cash). The cost should not more than €50 for each year of service.  

For more information, refer to the Revenue Commissioners, Ireland.  

5. بولندا  

The National Revenue Administration of Poland has the ZFŚS, i.e., Company Social Benefits Fund. This fund houses a separate bank account for every worker and has an employee's and employer's contribution. The ZFŚS is allocated to leisure, healthcare, entertainment, sports, recreation, along with other expenses.   

Any purchase of gifts that ZFŚS finance is tax-free. Meanwhile, the purchase of gifts partly from the ZFŚS and partly from current assets won't make it tax-free—no matter how much the amount is.

However, if the employee funds the benefit partially along with the ZFŚS taking care of the other part, an exemption shall be applied for them. For detailed information, we advise you to connect with the designated tax office in Poland.  

6. فرنسا  

حد الإعفاء الضريبي: 169 يورو للفرد P / A  

The Ministry of Economics and Finance is the supreme tax collector in France. According to its instructions, the gift voucher value for every employee shouldn't exceed more than €169 per employee per year. The amount is exempt from the tax irrespective of the occasion.  

هناك بعض الاستثناءات عند تجاوز هذه العتبة:  

The gifts are given for an event that marks a significant milestone, e.g., wedding, birth, retirement, Mother's Day, Father's Day, etc. If the gift voucher is given for the event (s)mentioned above, one cannot redeem it for food or fuel (the voucher's value should still be €169 per event and calendar year)  

Cultural events that promote the country's colors and traditions. For a detailed check, have a look at the France Tax Authority's website.‍  

7. إسبانيا  

Spanish gift and inheritance tax is levied on goods and rights acquired by Spanish tax residents by inheritance, legacy or other type of succession, or by donation or other inter vivos legal transfers with no charge.  

Spanish gift and inheritance tax is also levied on goods and rights acquired by Spanish non-residents in the manners stated above, whatever their nature, which are located, may be exercised or should be complied with in Spain.

However, if a DTT has been signed between Spain and the non-resident's country of residence, taxation will depend on the DTT applicable.  

The tax liability will depend on different matters such as the relationship between the taxpayer and the donor/deceased, or the taxpayer's previous wealth.  

8. النرويج  

حد الإعفاء الضريبي: 1000 كرونة نرويجية للفرد P / A  

The Norwegian Kroner (NOK) is the currency that does rounds in Norway, and as a general rule, gifts up to NOK 5,000 every year are tax exempted. This applies to all kinds of occasions where employers give gifts.   

The tax exemption rules for gifts can therefore now be used for example to give employees a free telephone and / or internet. The rules can also be used in connection with the employee's benefit of a free car, free housing, interest benefit, etc.  

For more information, refer to the Norwegian Tax Authority's website.  

9. هولندا  

In a general sense, there's no separate clause for the Dutch corporations signifying the gift tax rules for employees, so we will focus on what it says altogether.    

That depends on the relationship between donor and recipient. And on the purpose for which the money is used.   

The annual exemption for all other persons in 2025 is €2,690. It therefore makes no difference to this donation whether the donor is a grandparent, an uncle or an aunt, a brother or sister or not related at all.  

The recipient does not pay gift tax on gifts up to the annual exemption and does not have to file a tax return.  

If the value of that gift is higher than the annual gift tax exemption, then it is mandatory to file a tax returnv. In 2025, the exemption is €2,690. This exemption applies per donor per year. This means that in 2025 you may receive €2,690 tax-free from different people.  

If you donate to a charity and the charity is an ANBI, SBBI or support foundation SBBI, usually no gift tax has to be paid. Sometimes the organization does have to file a declaration of a gift to apply for the gift exemption.  

10. الدنمارك  

Employees who receive employee benefits from their employer are generally required to be taxed on the market value of the benefit. However, there are exceptions for employee benefits that fall under de minimis threshold and benefits that have been made tax-free.  

De minimis threshold for minor employee benefits:  

The de minimis threshold for minor employee benefits has been adjusted to DKK 1,400 (DKK 1,300 in 2024) in 2025.  

This means that employees who receive such minor employee benefits (e.g., Christmas gifts, cinema tickets, a box of chocolates, etc.) will not be taxed on them if the total value does not exceed DKK 1,400.  

Employers are not required to report such minor benefits, even if the threshold is exceeded. However, if the value of an individual benefit exceeds the threshold, it must be reported.  

If the threshold is exceeded, it is generally the employee's responsibility to declare the total value of the benefits on their tax return.  

An employer's Christmas gifts to employees are included in the above de minimis threshold.  

However, if an employee receives a Christmas gift from their employer, the gift is not taxed if its value does not exceed DKK 1,000 in 2025 (DKK 900 in 2024). This applies even if the total value of minor employee benefits during the year exceeds DKK 1,400.  

For more information, you can visit the official website for tax authority of Denmark.  

11. ألمانيا  

Inheritance and gift tax are levied on transfers of property by reason of death, gifts during lifetime, and transfers for certain specified purposes (gift tax), as well as on the net worth of certain family foundations and trusts.   

The tax is generally assessed on the net worth of the property transferred after deducting certain exemptions as well as personal exemptions depending on the family relationship. Taxable transfers of property are subject to tax at graduated rates (ranging between 7 percent and 50 percent).  

Tax exemption and other benefits  

Depending on the tax class of the person concerned, they are entitled to a tax-free allowance. According to Section 16 ErbStG, the acquisition remains tax-free in the following cases of unlimited tax liability:  

• Spouses and civil partners: €500,000,  
• children and children’s children (if the parents are deceased): 400.000 €,  
• grandchildren: €200,000,  
• all other persons who are assigned to tax class II or III: 20.000 €.  

Therefore, the amount of the tax-free allowance in Germany depends on the tax class and the personal relationship between the donor and the gifted person/acquirer. In principle, the closer the relationship between the parties concerned, the higher the tax-free amount. In addition, the exceptions set out in Section 13 ErbStG, which guarantee tax exemption, must be observed. This is particularly relevant for gifts of real estate.  

حد الإعفاء الضريبي: 44 دولارا للفرد في الشهر  

12. سنغافورة  

حد الإعفاء الضريبي: 200 دولار سنغافوري لكل هدية P / A  

بموجب قوانينها الضريبية ، تعرف مصلحة الضرائب في سنغافورة الهدية بأنها هدية "كبيرة" في حالة تجاوز قيمتها 200 دولار لكل هدية لكل عام. لاحظ أنه يمكن لأي شخص الحصول على هدايا متعددة بمبلغ 200 دولار دون فرض ضرائب عليه. إذا كانت طبيعة المنفعة أو الهدية حزنا ، أي بمناسبة الخسارة ، فإنها تعفى من أي ضريبة. هذه الهدايا لا تخضع للضريبة أبدا ، حتى لو تجاوزت قيمتها 200 دولار سنغافوري. لاحظ أن القواعد المذكورة أعلاه تنطبق على الهدايا النقدية وغير النقدية.  

For more information, visit the Official Website of the Singaporean IRS.‍  

13. أستراليا  

حد الإعفاء الضريبي: 300 دولار للفرد P / A  

The Government's Australian Taxation Office (ATO) signifies in their fringe benefits tax guide that all the non-entertainment gifts given to the employees are exempted from the fringe benefits tax—the condition being that its total cost is less than $300 (plus GST) per person.  

As branded currency such as gift vouchers are a part of the non-entertainment category, the employer can claim a tax deduction and GST credit. The same exemption on minor benefits applies to gifts separately provided to the staff member's spouse, and yes—it comes with a favorable tax outcome. Entertainment expenditure incurred on non-employees like customers and clients is subject to neither fringe benefits tax nor income tax deduction or GST credit.  

14. نيوزيلندا  

حد الإعفاء الضريبي: 300 دولار للفرد في الربع  

‍The Inland Revenue department of the Government of NZ signifies that if gifts and prizes are provided, or goods and services are subsidized or discounted, then fringe benefits tax is not payable to the limit given above. If the monetary value of gifts and subsidies goes over the $300 mark, it has to be charged under the Fringe Benefits Tax. As for employers, the maximum exemption on gifts can be claimed up to $22,500 per annum.  

بعض العناصر المعفاة من الضرائب لأصحاب العمل هي:  

• Work apparel/uniform.  
• Lease paid on car parking within/apart from the premises.  
• Frequent flyer schemes tied to the organization.  

For a detailed view on the topic, visit the Official Website of the Inland Revenue Department, New Zealand.  

15. الصين  

There's no tax exemption in China for gifts given by the employer to employees. It's added to the employee's income for tax purposes, and the tax is levied accordingly. However, the exchange of gifts between individuals doesn't call for a gift tax as there's no specific gift tax law in the People's Republic of China.  

16. Indonesia 

Indonesia does not have a specific "gift tax”. However, gifts may be subject to income tax if received in connection with employment, business, or services. Gifts between family members are generally not taxed, but documentation may be required to prove the relationship. 

For more information on taxes in Indonesia, visit the Directorate General of Taxes, Indonesia. 

17. Philippines 

The Philippines imposes a donor’s tax on gifts. The current rate is 6% on gifts exceeding PHP 250,000 per year, whether given to individuals or organizations. The donor is responsible for filing and paying the tax. 

There is no inheritance tax in the Philippines. However, an estate tax of 6% is imposed on the assets of the decedent taxpayer. 

18. UAE 

The UAE does not levy gift tax. There are no personal income taxes or inheritance/gift taxes for individuals. However, certain property transfers may incur registration fees. 

For more information on taxes in UAE, visit UAE Government Portal. 

19. Saudi Arabia 

Saudi Arabia does not impose a gift tax. There are no personal income, inheritance, or gift taxes for individuals. However, Zakat (a religious wealth tax) may apply to certain assets for Saudi nationals. 

20. France 

If the donor is domiciled in France, you must to pay gift tax on all goods received, whether located in France or abroad. 

However, special rules apply for certain goods under strict conditions. 

Money: 

You have to pay tax on donations of money you receive. 

The intervention of a notary is not mandatory for manual donations and family donations of money. 

However, if you receive money for a particular occasion (birthday, wedding, birth, passing an exam, etc.), you don't have to pay anything. This is a customary gift. 

But the amount offered must be reasonable, that is, proportionate to the income of the person offering it. 

Moreover, some gifts of money are exempt from payment of gift tax, subject to conditions: 

• Family donations. 
• Donations to victims of terrorist acts. 
• Donations to law enforcement personnel injured in operations or on duty. 

Movable property: 

You must declare and pay duties based on the estimated value of the property that you receive. 

The estimated value of jewelry, gems, works of art or collectors' items must correspond to at least 60% of that declared, where appropriate, in a contract of insurance against theft or fire. 

If the property is subject to a auction within 2 years after the donation, the (net) sale price will replace your estimate. 

If you receive a high-value good artistic or historical, you are exempt from duties if you do so gift to the State, with its approval. 

These are the following goods, subject to certain conditions: 

• Work of art 
• Book or document 
• Collection object. 

You must address your gift offer the tax department responsible for the donation declaration. 

Real estate: 

Gifts of real estate require the intervention of a notary and one authentic instrument. 

If they wish, the donor can only give you the bare-ownership of good and to retain the usufruct. 

On the death of the donor, you will recover the entire property, without having to pay any additional fees. 

The passed-in nue-property value is calculated according to a tax schedule which depends on the age of the person making the donation. 

Special rules also apply for certain types of goods, in particular in the following cases: 

• Historical monument 
• Rental housing acquired between August 1995 and December 1996 
• New dwelling acquired between June 1993 and December 1994 (or between August and December 1995) 
• Forestry or agricultural goods 

Goods linked to economic activity: 

You are partially exempt rights on the donation of the following goods, under certain conditions : 

• Individual business 
• Shares or business shares. 

Company donations to employees may also benefit from a partial exemption. 

For more details, visit the official website. 

21. Canada 

Gifts from friends or family members, including cash or property, are usually tax-free. 

However, some types of gifts are taxable. Gifts from employers are often considered taxable benefits. If your employer gives you a non-cash gift, like a vacation package or electronics, its value may be added to your income and taxed. 

When it comes to property, the recipient doesn’t pay taxes, but the person giving the gift might. For example, gifting a house or stocks could trigger capital gains tax for the giver if the property has appreciated in value. 

Taxable gifts in Canada 

• Cash gifts from an employer over $500 
• Non-cash gifts from an employer if the total value exceeds $500 
• Gifted property (e.g., real estate, stocks) may trigger capital gains tax for the giver 

Non-taxable gifts in Canada 

• Cash gifts from family or friends 
• Property gifts (e.g., houses, stocks) for the recipient, though the giver may face capital gains tax 
• Small, non-cash gifts from an employer under $500 

Gift tax on property: 

In Canada, if you gift property like a house or stocks, the person receiving it doesn’t pay taxes on the gift. However, the person giving the gift might face a capital gains tax. Suppose you bought a house for $200,000, and now it’s worth $500,000.

If you gift that house, you may have to report a $300,000 capital gain. (This is assuming the giver didn’t designate the house as their principal residence and elected to use the PRE exemption on this house) 

Gift tax on gifts from employers: 

Gifts from employers are often taxable. If your employer gives you a gift that’s worth more than $500, it could be considered a taxable benefit. A taxable benefit means the value of the gift is added to your income and taxed at your regular income tax rate.

For example, if your employer gives you a $1,000 holiday bonus in cash or a high-value item, you’ll likely see it reflected on your T4. 

Smaller gifts under $500 might not be taxable but always check with a tax expert to be sure. 

22. Australia 

Australia does not have inheritance, estate or gift taxes. However, special tax rules apply to: 

• the transfer of assets to a beneficiary from a deceased estate for capital gains tax purposes and 
• the transfer of superannuation entitlements to beneficiaries of a deceased person. 

AUTHOR'S NOTE: This blog is for informative purposes only and should not be construed as professional, financial, or legal advice. The information does not constitute or form part of and should not be interpreted as a direct indication from the designated countries' tax authorities.  
For updated information, please visit the official tax website of your country's government and feel free to correct us if we make an error.  

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