Published on : 13 February 20202 min reading time
In particular, in all countries, corporate gifts are governed by regulations and legislation, especially tax laws. In the past, companies have tended to offer gifts on the occasion of nativity celebrations. However, the exchange of gifts takes place throughout the year, apart from the birthday party during Independence Day, as well as for the end of the year party and especially Christmas Day. Are there any serious regulations specific to corporate gifts? It is therefore worth explaining the principle of the legislation on corporate gifts.
Principle of corporate gift regulation
In principle, a problem of choice arises when a company transfers gifts to its partners. There are indeed regulations for the distribution of gifts. The business gift box is framed by a tax regime that requires attention. This business gift set is deducted from the company’s net result. It is also deducted when VAT is reclaimed. These gifts represent a deductible expense on the taxable profit if they are distributed in the interest of the company. The regulation of a business gift is always based on many company conditions, such as the company’s status and area of activity. On the other hand, the offer of a gift must be objective in relation to the loyalty of the beneficiaries.
What does the legislation say about corporate gifts?
Not all corporate gifts are governed by the same regulations and legislation. Business gifts are offered as a means of maintaining the professional relationship. These gifts are taxed at a rate of 55% employer’s tax and 20% employee tax. In this respect, exceptions are made for companies offering gifts to their employees as an incentive. This shows that motivation is in the interest of the company. Giving gifts is therefore essential if a company is to make positive progress in its activities.
The limit of the corporate gift regulation
We were able to have the principles of the regulations concerning corporate gifts, so we can have exceptions. The law is therefore being called into question. However, there are limits to this rule when we talk about the notion of less valuable goods. Business gifts entitle the deduction of VAT, especially when their unit price per year does not exceed 69 euros including all taxes. This means, therefore, that every rule has its exception.