Corporate gifts are a very common practice, whether they are gifts to customers – to acquire new ones, or to retain existing ones – or to employees, to recognize and reward their work.
But what is the tax treatment of gifts to customers and corporate gifts? Let’s find out together.
To assess the deductibility of corporate gifts and those to customers, it is necessary to establish whether or not they can be included in the entertainment expenses, or it is necessary to verify the presence of the characteristics of:
- Free: there is no consideration or consideration given by the recipients of the goods
- Promotional or public relations purposes: they spread the activity carried out on the market, or spread and consolidate the image of the company.
- Reasonableness: they can create, even if only potentially, future economic benefits for the company.
The expenses relating to freely distributed goods with a unit value not exceeding € 50 are fully deductible, regardless.
For the deduction of VAT: Legislative Decree 175/2014, art. 30) and art. 2, comma 2, n. 4), DPR n. 633/72, which allow 100% VAT deductibility if it is for goods with a unit cost of up to 50 euros that are sold free of charge.
- Gifts to customers of goods not covered by the business activity can be classified in all respects as entertainment expenses.
- Corporate gifts to employees of assets not covered by the business activity, on the other hand, can be classified as expenditure for work performance.