Are corporate gifts tax-deductible?
Corporate gifts are an important part of business relationship management. They can be used to strengthen relationships, increase brand awareness, and attract new customers. But are corporate gifts also tax-deductible?
What are corporate gifts?
First let’s cover the basics first, corporate gifts are gifts given to business relationships, such as customers, suppliers, employees, and other business partners. They are intended to strengthen the relationship and increase brand awareness. Corporate gifts can take many forms, such as:
Want to strengthen your relationships? Go a step further with our sustainable corporate gifts.
Corporate gifts tax-deductible
In principle, corporate gifts are tax-deductible as business expenses. This means that you can deduct the cost of them from your income tax. However, the deduction is limited to 50%.
There is a threshold for VAT paid on corporate gifts. If you limit the cost of corporate gifts per recipient per year to € 227 (excluding VAT), then you can fully deduct the VAT on the gifts.
Tips for tax-friendly corporate gifts
If you want your corporate gifts to be tax-deductible, it is important to keep the following tips in mind:
- Limit the cost per recipient per year to € 227 (excluding VAT).
- Choose gifts that are useful and representative.
- Keep a record of the costs of corporate gifts.
Corporate gifts are an investment in your company. They can help to strengthen relationships, increase brand awareness, and attract new customers. However, there are a number of conditions attached to the tax deductibility of corporate gifts. Limit the cost per recipient per year to € 227 (excluding VAT) and choose gifts that are useful and representative. With good record keeping, you can demonstrate the deduction of business gifts to the tax authorities.