Corporate Gifts: Are They Tax Deductible or Not? A Clear Answer

Deducting corporate gifts for tax purposes

In general, corporate gifts are deductible at 50% as business expenses. This applies to gifts with a value of up to €125. This means that when choosing a personalised premium gift, such as a luxury bottle of olive oil or a beautiful candle, you can deduct 50% of the cost from your taxable income. Specific rules apply for higher amounts, which we explain further below.

Calculation example:

Suppose you run a sole proprietorship with a taxable income of €100,000 and you give away corporate gifts worth €1,000, such as personalised bottles of whisky or olive oil from makeyour.com. In that case, you may deduct 50% of this €1,000, reducing your taxable income to €99,500. At a tax rate of 50%, you save €250 in taxes. This applies to corporate gifts deductible in 2024.

Are your corporate gifts tax deductible above €125?

For corporate gifts above €125, such as an exclusive personalised gift set, these are 100% deductible, provided a fiche 281.50 is drawn up in the recipient's name. Please note: the recipient will then be taxed on the value of the gift, which may be less desirable.

Which corporate gifts are 100% tax deductible?

There are exceptions where corporate gifts are 100% deductible. This is possible in the following situations:

1. Foreign business trip

When you hand out personalised gifts, such as luxury bottles of gin or wine, during a business trip abroad, these are 100% deductible. However, this only applies if you hand over the gifts abroad. If these are given to foreign business relations in Belgium, deductibility remains at 50%.

2. Promotional items

If you choose personalised products printed with your company name or logo, such as candles or power banks, these are 100% deductible. It is important that your name or logo remains clearly visible on the gift. Good news, then, because all corporate gifts from makeyour.com are deductible, given that they are always personalised.

3. Corporate gifts above €125, provided a fiche 281.50 is drawn up in the recipient's name.

Is VAT deductible on corporate gifts?

VAT is, in principle, not deductible, but there are exceptions. For corporate gifts or Christmas hampers to be VAT deductible, they must meet certain conditions:

• The value of the gift is less than €50 excl. VAT.
• The gift is intended for a business relation.
• It cannot be used as a promotional item.
• The gift is not a tobacco product or alcoholic beverage.
• The VAT deduction for corporate gifts is only valid for one corporate gift per customer per year. So if you give multiple gifts per year to the same customer, you can only exercise the right to VAT deduction for one gift.

Is VAT deductible on samples or promotional items?

Do you offer personalised products as samples to introduce your customers to your range? Or do you have your logo engraved on gadgets such as keyrings or our mini personalised products? These products fall under the category of promotional material, for which different, more favourable tax rules apply.

Promotional material is 100% tax deductible, and you can also fully reclaim the VAT. However, this only applies when the product has a limited value, is widely distributed among the public, and your company name or logo is clearly and permanently visible.

How often may you give a corporate gift to your customers?

You may give only one gift per customer relationship per year if you want to recover the VAT. For a value under €49.99, the VAT is fully deductible. For gifts above that amount, you bear the VAT yourself. From a tax perspective, a corporate gift up to €125 is 50% deductible. If it is worth more than €125, it is 100% deductible for you, but the customer must pay tax on the gift.
 

At makeyour.com, we ensure that your corporate gifts not only make an impression, but also comply with tax regulations, including the deductibility for corporate income tax. Whether it concerns personalised bottles of drinks, printed promotional items, or exclusive gifts, our handy step-by-step guide helps you make the most of the tax opportunities in 2024.