In the context of its commercial relations, a company is often led to make business gifts to its partners (mainly customers).Fiscal and social rules regulate the business gifts granted by companies to their partners, which is why we have written this user guide that deals with the use of business gifts, then the tax and social legislation that frame them.
The use of business gifts
Making business gifts to key partners, usually at the end of the year or for a particular occasion, is a practice commonly used by businesses. This is something commonplace in certain sectors of activity, to such a point that the partner sometimes expects his gift every year. Now that the Premium Gifts are there then the options will be there.
Making a business gift makes it possible for the company to please a partner, maintain contact and generate business when the marketing strategy is well thought out. This action also has the advantage of being able to devote only a small budget per gift.To increase the impact of the business gift on the recipient, you can also customize it. Choosing to offer personalized gifts may take more time, but the return on investment, direct or indirect, is generally much better.
Taxation of business gifts
Business gifts made by a company are subject to special tax measures. Here are the rules applicable to VAT, deduction of taxable profit and declarations.
VAT on business gifts
First, for the company to recover the VAT on business gifts, the unit value of the gift must not exceed 69 euros per person per year. Otherwise, the VAT is not recoverable.This rule only applies to business gifts, advertising samples are subject to a different rule. You can opt for Popular Premium Gifts online now.
Deduction of business gifts
Purchases of business gifts are deductible from taxable profit if they are made in the interest of the business and are of a normal nature, valued according to the practices of the profession, the size of the business and the nature of the business.
Importance of the partner
An SME who offers a car to a customer with whom it generates a small turnover performs an act that does not have a normal character. This example is a little excessive but presents the idea of the normal nature of the business gift.
Like all expenses in general, it is necessary that the expense is reasonable and committed in the interest of the company to be deductible. Fiscally, it is sometimes necessary to be wary anyway when the company distributes.
Declaration of business gifts exceeding 3,000 euros
Finally, the company is required to declare annual business gifts worth more than 3,000 dollars.
This declaration materializes on:
- The statement of overhead costs (form 2067) for companies and the 2031 declaration for sole proprietorships.
- Business gifts and the right to work
- Business gifts are also framed by the law at the level of labor law.
When an employee receives a business gift because of his / her belonging to a partner company of the one who has granted it to him, it is necessary that this last one is in contact with the customers and / or carries out a commercial activity.Otherwise, this gift can be considered as a benefit in kind and therefore subject to social charges.