When are corporate gifts tax deductible?

From holidays to corporate parties, there are many occasions to give gifts to clients, business associates and employees. But what about the tax deductibility of these corporate gifts?

Promotional gifts for customers and business partners

Promotional gifts are deductible business expenses. 50% of the costs you may deduct from taxable profit. On what is left, you then pay taxes. 

You retain the right to VAT deduction when purchasing promotional gifts, under a number of conditions: 

  • The purchase price of the gift is max. €50 (excl. VAT)
  • You have proof that the goods were given as a commercial gift (e.g. a list of all beneficiaries and their gift)
  • It is not about tobacco products or spirits

The VAT authorities allow the deduction for only one promotional gift per customer and per calendar year. So if you give out multiple gifts to customers throughout the year, you may only exercise the right to deduct VAT for one gift.

What about promotional items?

Corporate gifts that serve as promotional material are eligible for VAT deduction upon purchase and are 100% tax deductible if:

  • The promotional item has little value
  • The name or logo of your company is clearly and permanently displayed
  • The gift is widely distributed among the general public

Consumables such as wine and chocolate do not fall under the rules of these promotional items, but follow the rules of promotional gifts.

Gifts for employees

The VAT on employee gifts is deductible if the purchase price of every gift is less than €50 (excl. VAT). In addition, it must be given to all your staff members or their children (within a certain age category). Tobacco products and spirits are excluded. 

Important to know: you may only one gift per employee per calendar year deduct the VAT.

Corporate gifts for your staff are basically a form of remuneration. You should actually pay attention to this pay social contributionsHowever, these gifts are exempt from social contributions if you meet the following conditions:

  • You give the gift on the occasion of a celebration or milestone, such as New Year, Easter or retirement.
  • It is a social benefit that all employees enjoy.
  • You respect the maximum amount:
    • Sinterklaas, Christmas or New Year: €40 per employee per year
    • Birthday: €40 per employee per year
    • Honorable distinction: €120 per employee per year
    • Wedding: €245 
    • Pension: €40 per year of service, with a minimum of €120 and a maximum of €1.000

Looking for gifts for customers or employees?

Take a look at our gift boxes. We have a wide range for every occasion and budget. We can also custom corporate gifts