Tax Calculations Done Right for You
In the life of a business, business gifts can be part of business expenses under certain conditions. They correspond to two types:
- Promotional items of an advertising nature: pens, notepads, key rings, etc.
- End-of-year gifts, usually accompanied by a greeting card, that companies give to their customers and suppliers
They must be offered in the interests of the business. The concept of the interest of the company is often widely interpreted by the tax authorities and it suffices in practice for the gift to be made for the benefit of a client and that it corresponds to the practices of the sector or the profession.
Business gifts that companies give to their customers and suppliers are authorized by the tax authorities but are subject to strict regulation. If they are not “exaggerated”, they can be considered as an expense (and therefore deducted from the profits) and their VAT can be recovered.
In the following cases, VAT on business gifts is irrecoverable:
- The unit value of the gift is greater than 60 € incl.
- The cumulative unit values of gifts offered to the same person during a year exceed € 60 including tax
- The unit value of the gift corresponds either to the purchase price or to the cost price when the company manufactures the object itself.
On the other hand, whatever the amounts, business gifts can be considered as expenses, while remaining within reasonable limits: the price of the gift must be in proportion to the importance of the customer and the turnover that it generates. , it must correspond to the uses of the profession. If the price is deemed excessive by the Administration, it may then be reintegrated into operating profit. Make calculations with the 1099 tax calculator there.
In the event that the manager of a company himself offers a gift to a client out of his personal funds, he can be reimbursed by the company if the gift respects the rules set out above. These refunds are not subject to income tax if they have been deducted from corporate tax by the company. If this is not the case, they must then be considered as additional remuneration and are therefore taxable.
All gifts exceeding € 3,000 must appear on the detailed statement of overheads to be attached to the declaration of results. Amounts not mentioned in this document may give rise to a fine of 5% of their amount or of 1% for deductible expenses.
VAT recovery is possible for visitors over 15 from a non-EU country. They must have spent more than 175 € in the same store during the last 3 months.
For the reimbursement of VAT, an invoice must be provided by the department stores concerned or the “duty free” stores. The amount of the refund can be found under the heading “Refund amount”. Affected visitors should hold their invoices at the airport when they leave the EU and return the pink copy within 3 months of their departure using the stamped envelope given when making their purchase.