A Closer Look - Common tax issues related to New Year’s parties and New Year’s gifts - December 2025
25 December 2025
New Year’s parties and New Year’s gifts given to employees
At this time of year, many companies tend to host New Year’s parties for their employees. Companies should keep in mind the following tax issues related to New Year’s parties and New Year’s gifts given to employees.
1. New Year’s party held for employees
1.1 For companies
| Type of tax | Issue | Tax treatment | Reference |
| Corporate income tax | Are costs incurred for holding a New Year’s party deductible expenses for corporate income tax purposes? | Those costs can be deductible expenses if a company has a clear policy of holding a New Year’s party for its employees, and the party was held in accordance with that policy, and was for all employees, without preferential treatment of some employees. | Ruling No. Gor Kor 0706/9276 dated 9 November 2005 |
| VAT | Is input VAT on the costs incurred for holding a New Year’s party claimable for VAT purposes? | Such input VAT can be claimable if a company has a clear policy of holding a New Year’s party for its employees, and the party was held in accordance with that policy, and was for all employees, without preferential treatment of some employees. | Ruling No. Gor Kor 0706/Por./9052 dated 6 September 2007 |
1.2 For employees
| Type of tax | Issue | Tax treatment | Reference |
| Personal income tax | Is the New Year’s party a fringe benefit for employees, subject to personal income tax? | If a company has a policy of holding a New Year’s party for employees, and the party is held in accordance with that policy, and is for all employees, it will be considered as income provided to employees in a ceremony or on occasions in accordance with established customs, and thus is exempt from personal income tax. | Ruling No. Gor Kor 0706/9276 dated 9 November 2005 |
2. Gifts given to employees
2.1 For companies
| Type of tax | Issue | Tax treatment | Reference |
| Corporate income tax | Are the costs of New Year’s gifts given to employees deductible expenses for corporate income tax purposes? | If a company has a clear policy of giving New Year’s gifts to its employees, and the gifts were given in accordance with that policy, and were given to all employees, without preferential treatment of some employees, the costs of those gifts are deductible. Otherwise, they will be considered private expenses, and are non-deductible. | Section 65 ter (3) of the Revenue Code |
| VAT | Input VAT: Is the VAT paid on the costs of New Year’s gifts given to employees claimable for VAT purposes? | Such input VAT can be claimable if a company has a clear policy of giving New Year’s gifts to its employees, and the gifts are given in accordance with that policy, and are given for all employees, without preferential treatment of some employees. | Ruling No. Gor Kor 0706/9052 dated 6 September 2007 |
| Output VAT: Are New Year’s gifts given to employees subject to VAT? | Giving New Year’s gifts to employees is considered as sales for VAT purposes and therefore subject to the VAT. Accordingly, the company is required to pay 7% VAT on the value of the gifts given to employees (cost of purchase). However, the company does not have to prepare a tax invoice for such gifts if the company does not collect the VAT on such gifts from employees. Nevertheless, the company must include such gifts together with the VAT in the output VAT report. | Section 77/1(8) of the Revenue Code Clause 2(10) of the Departmental Instruction No. Paw. 86/2542
Clause 7(6) of the Notification of the Director-General of the Revenue Department regarding VAT (No. 89) |
2.2 For employees
| Type of tax | Issue | Tax treatment | Reference |
| Personal income tax | Are New Year’s gifts given to employees assessable income of the employees, subject to personal income tax? | If a company has a policy of giving New Year’s gifts for employees, and the gifts are given in accordance with that policy, and given to all employees, it will be considered income provided to employees in a ceremony or on occasions in accordance with established customs, and thus exempt from personal income tax. | Section 42 of the Revenue Code |
VAT Implications of Promotional Gifts to Customers
A company may promote its sales by giving products or gifts to customers on certain occasions. In such cases, the company should consider the VAT implications of gifts given to customers.
1. Output VAT
The Revenue Department provides guidelines on gifts given to customers in the Notification of the Director-General of the Revenue Department regarding VAT No. 40 (“the Notification”).
Normally, gifts to customers are considered goods sold, which are subject to VAT. However, under Clause 2(6) of the Notification, the value of goods distributed or given away as gifts in certain situations do not have to be included in the VAT computation. The value of gifts given to customers does not have to be included in the VAT computation if:
- the gifts are given in a ceremony or on occasions in accordance with established customs such as New Year’s, an opening ceremony for a company, office, or showroom, or the introduction of new products;
- the name, trade name, or trademark of the company is permanently affixed (such as printed or spray-painted on) to the gift;
- the gifts are articles that are usually given in general business practice, such as calendars, diaries, glasses, keychains, pens, or goods of a similar nature; and
- the price or value of the gifts is “reasonable”. However, the Notification does not define the term “reasonable”.
2. Input VAT
If the gifts given by a company to its customers comply with the guidelines set out in the Notification, VAT from the purchase of such gifts is claimable.
However, if a gift or fruit basket is given to a customer with a business card attached to the basket, the VAT from the purchase of such a gift or fruit basket is considered input VAT arising from entertainment expenses. In this case, the input VAT cannot be claimed under Section 82/5(4) of the Revenue Code. However, the cost of the gift or fruit basket, along with its VAT, can be deducted as an entertainment expense for corporate income tax purposes, provided that the following conditions under Ministerial Regulation No. 143 of the Revenue Code are met:
- The entertainment expense is necessary in general business practice.
- The person entertained is not an employee, unless employees are obligated by their duties to participate in the entertainment (i.e., the person entertained must be a client).
- The entertainment expense is beneficial to the business.
- The cost of articles given to those entertained does not exceed THB 2,000 per person on each occasion.
- The entertainment expense does not exceed 0.3% of the amount of gross taxable income or sales or the amount of paid-up capital as at the end of the accounting period, whichever is greater. However, total entertainment expenses deducted must not exceed THB 10 million.
- The entertainment expense is approved or authorized by a director, partner, or manager, or one of their delegates.
- There is evidence of the entertainment expense in the form of receipts or similar documents issued by the recipient.
While New Year’s parties, employee gifts, and promotional giveaways are common business practices, the related tax implications can be complex and highly dependent on proper policies, documentation, and compliance with Revenue Department’s guidelines. Key factors such as having clear internal policies, ensuring equal treatment of employees, assessing VAT obligations correctly, and distinguishing between employee benefits and customer entertainment are critical to securing tax deductibility and avoiding unexpected tax exposures.
How Forvis Mazars can help
Forvis Mazars Thailand can assist companies in reviewing and structuring New Year’s parties, employee benefits, and gift-giving arrangements to ensure compliance with Thai tax laws. Our services include advising on corporate income tax deductibility, VAT input and output tax treatment, personal income tax implications, and the preparation or review of internal policies and supporting documentation. We also support businesses in managing VAT and tax risks related to promotional gifts and entertainment expenses.
If you require further clarification or tailored advice for your specific circumstances, please feel free to contact us.
Our tax team would be pleased to assist you.
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