Business gifts 2022: what taxation applies?

Business gifts enable a company to thank its employees or strengthen ties with suppliers or customers. Business gifts offered in 2022 are subject to specific rules concerning VAT recovery and deductibility from taxable income. Here's a breakdown of the applicable tax rules.

Deduction from taxable income

From boxes of chocolates to high-tech products and trips or holidays, business gifts, traditionally given at Christmas, are becoming more widespread throughout the year. Used as a marketing lever, they are also subject to specific tax regulations.

Corporate gifts given to customers or business relations are deductible from taxable profit provided 3 conditions are met:

  • They must be made in the interest of the smooth running of the company;
  • Their value must remain consistent with the company's size and sales;
  • They must not be prohibited by any legal or regulatory provision.

In the event of an audit, the tax authorities will check that these rules have been respected. It is therefore essential to keep invoices for gifts, which must mention the names of those who received them.

However, if the total value of gifts offered to customers does not exceed 3,000 euros, the company is not required to declare them. Once this threshold has been exceeded, a special statement (no. 2067) must be completed, to be attached to the income tax return for companies, orappendix no. 2031 for sole proprietorships subject to an actual tax regime.

VAT recovery

In principle, VAT is not deductible on business gifts, even if they are made in the interest of the company. However, there are 2 exceptions.

As of January 1, 2021, low-value gifts (less than or equal to 73 euros incl. VAT) are eligible for VAT recovery. This threshold, valid per year and per beneficiary, includes the ancillary costs associated with the gifts (packaging and distribution costs, if any).

Advertising displays are also exempt from the principle of non-deductibility of VAT. These include posters, furniture, signs and billboards.

Gifts offered to customers or employees are subject to a special tax regime, compliance with which is strictly monitored by the tax authorities. The tax authorities reserve the right to reinstate expenses deemed excessive or not incurred in the direct interest of the company.

Before incurring these expenses, it is therefore advisable to find out about the conditions for deducting business gifts from taxable profit, and the conditions for reclaiming VAT. If you have a chartered accountant, he or she will be able to answer your questions.