During the holiday season, many companies are considering giving a gift to their customers and employees. Gifts that obey specific tax rules that it is important to know well in order to avoid any risk of recovery.
Regardless of the beneficiary (customer, supplier, employee, etc.), the VAT on gifts is normally not deductible, even if the operation is carried out in the interest of the company. However, by way of exception, this deduction is allowed in the case of goods of very low value, that is to say when the purchase price or unit cost of the gift does not exceed 73 € TTC per year. and by beneficiary. And be careful, because the tax administration includes in this value the distribution costs payable by the company (packaging costs, shipping costs, etc.).
Note: if, during the same year, the company offers several gifts to the same person, it is the total value of these goods which must not exceed 73 €. An amount which, it should be noted, was reassessed on January 1, 2021 (€ 69 previously) and will be applicable for 5 years, i.e. until 2025.
Deductibility of taxable income
Gifts to customers are a charge deductible from taxable profits, whether income tax or corporate income tax, when offered in the direct interest of the business and which ‘they are not of excessive value.
Important: the company must be able to prove the usefulness of business gifts for its activity (retaining a customer, for example) and, in particular, to name the beneficiaries. It is therefore recommended to keep all the necessary supporting documents (invoices, name of customers, etc.).
Gifts offered to employees are also deductible, like any benefit in kind.
In practice: when the total amount of business gifts exceeds € 3,000 over the financial year, you must, in principle, enter them on the statement of overheads, under penalty of a fine. In practice, sole proprietorships fill in a special framework of appendix 2031 bis in their declaration of results. As for companies subject to corporation tax, they must attach detailed statement No. 2067 to the income statement. Gifts offered to employees can also be included if they are among the best paid people in the company.