The tax authorities allow any gifts offered by enterprises to their clients or suppliers. The company may also deduct the VAT gifts of low value.
Champagne, chocolate, books… It is common, on the occasion of the end of the year festivities, companies to offer some of their customers and prospects, just as some of their suppliers, gifts to develop and preserve their business relationships.
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These operations result in a double tax treatment, on the one hand in terms of expenses deductible from the taxable income, and on the other hand, in the matter of recovery of deductible VAT related to the acquisition of goods or services intended to be offered. Provided you do not exceed a certain amount, says Mabrouk Sassi, a lawyer at the Court. Details.
the conditions under which gifts are tax-deductible to the result ?
generally, gifts of all kinds (wine, chocolate, books, concert tickets, pens or even promotional items) are in principle deductible from the income of the enterprise provided that their unit value is consistent with the business relationship maintained with their beneficiary.
This means as well as the value of purchase, excluding taxes, may be taken into account in the expenses the company, which shall be deducted from the taxable income, provided, however, that the gift is made in the interest of the company. This is the case when the gift and its value are consistent with the importance and the quality of the business relationship. Only gifts whose value is disproportionate, are likely to be challenged by the administration.
When can we recover the VAT ?
On the plan of the VAT, the rules are more strict since the recovery of the VAT paid on the acquisition of gifts is subject to a condition of a fixed value independent of the importance of the business relationship.
Thus, only those gifts whose value does not exceed the unit value 69 € TTC , allow the business to recover the VAT.
In this regard, it should be noted that for a gift consisting of several items , it is the value of the whole, which must be taken into account in the limit of 69 € TTC since 2016 (€65 previously).
This means that when the value exceeds 69 euros including VAT, the company is not entitled to recover the VAT.
For example, a company makes a gift annual a customer to a value of 60 euros including VAT, the VAT payable is fully deductible. By contrast, if the amount of the gift is 69,80 euros including VAT, the VAT is fully non-deductible because the threshold of 69 euros is exceeded. The full price of the gift must then be placed in charge.
This limit is reviewed every five years in proportion to the monthly index of consumer prices excluding tobacco for all households (and rounded to the higher euro). Next review in 2021 so.
Declare gifts
The mention of these gifts must be included on the fee statement general no. 2067 of the company (or in the ad-hoc declaration n°2031 for an individual business) where the amount of the gifts granted during the year more than € 3000 .
An omission does not lead to reintegration, but subject to a fine of 5% of the amounts not declared (or 1 % if they are actually deductible).
This article has been updated on 04/12/2017. MB.
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Gift business
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Gift normal or exaggerated ? In any case, and in order to guard against a possible challenge by the tax authority, it will always be advisable to build a record to demonstrate the merits of the politics of gifts (objective criteria and relevant to recipients, practices of the profession, relevance of their amount, identity of recipient, invoices, etc.).
To conclude, and concerning the gifts of a significant value, it is fundamental to be able to demonstrate that it is not a commission in disguise, because this will cause the immediate reinstatement of the value of the gift to the profit of the company.
This article has been updated on 04/12/2017. MB.
