Are Eid Hampers Taxable?

Exchanging gifts or what is now popularly known as Hampers, ahead of Eid al-Fitr, is one of the habits that many Indonesians have been doing for a long time. 

In the current era, the habit has become a lifestyle and an effective means of connecting, not only between relatives but also colleagues in the professional environment.

In the tax context, the gift of an item between one party and another party who has an employment relationship can be categorized as part of Benefit in Kind (BiK) or fringe benefits. This is because the income increases one's economic capacity. Therefore, it can be determined as a tax object and on its delivery can be collected as Income Tax. 

Indeed, not all hampers are subject to income tax—only those that meet specific criteria according to the regulations. So, what are the conditions under which a hamper is considered an income tax object?

Gifts for Employees

Firstly, Hampers given by employers or companies to their employees, if the hampers given are not in the form of foodstuffs, beverages, food and/or beverages.

It should also be noted that if the hampers given by the employer to its employees are made of food or beverage ingredients, food and/or beverages, but not all employees, then the Hampers distributed are BiK, which is the object of Income Tax.

The provision of Hampers aforementioned will be subject to Income Tax Article (ITA) 21, which is calculated using the monthly Average Effective Rate (TER) scheme of ITA21. To calculate it, the amount of gross income (salary, THR, and other benefits including hampers) received by employees in the relevant month is multiplied by the monthly TER rate.

For information, the amount of Monthly TER is determined based on the gross income value and the recipient's Non-Taxable Income (PTKP) status. Based on this, there are three categories of TER: TER A, TER B, and TER C.

TER Category	PTKP Status	PTKP
TER A	TK/0 TK/1 dan K/0	IDR54 million IDR58,5 million
TER B	TK/2 dan K/1 TK/3 dan K/2	IDR63 million IDR67,5 million
TER C	K/3	IDR72 million

Hampers for Service Providers

Secondly, taxable hampers are those given by service recipients to service providers. For example, if a company gives gifts to individuals or entities providing services, the hampers are considered gifts from the service recipient to the service provider.

If the recipient of the gift or hampers is an individual, it is subject to Income Tax Article 21 at a progressive rate, in accordance with Article 17 of the Income Tax Law, based on the value of the hampers given. The following are the income tax brackets as determined by the latest provisions under the Law on Harmonisation of Tax Regulations (HPP):

No	Taxable Income	Rate
1	Up to IDR 60 million	5%
2	Above IDR 60 million up to IDR 250 million	15%
3	Above IDR 250 million up to IDR 500 million	25%
4	Above IDR 500 million up to IDR 5 billion	30%
5	Above IDR 5 billion	35%

if the recipient of the Hampers is a Corporate Taxpayer, then ITA 23 shall be withheld at a rate of 15% of the value of the hampers provided.

For the withholding of ITA 21/23, the company that provides Hampers is obliged to make proof of withholding of Income Tax Article 21/23. Furthermore, after making deductions and issuing withholding slips of ITA 21/23, the company is obliged to pay the income tax payable to the State Treasury. (ASP/CHY/KEN)