Are promotional gifts deductible for my company?

Are promotional gifts deductible for my company?

24 November 2022 – reading time: 2 minutes
You want to thank the people you often work with by sending them a bottle of champagne. You’re sending your clients, or better yet, potential clients a spectacular mug with your logo on it in hopes of a future collaboration. These are two examples of promotional gifts you can send to promote your company.

Totally deductible?

While these are definitely business costs, you can’t fully deduct them for your company. According to the tax authorities these are mixed costs: business costs with a private nature. Similar to the costs for food and drinks you have to make up for the private part of the costs in your tax declaration. There are two ways to do so:

1. The first €5.600 is not deductible. Everything above that amount is fully deductible.
2. The costs are deductible for 80% (73,5% in the VPB, corporation tax). This means you have to add 20% of the costs of the promotional gifts to your income in your tax declaration.

And how about VAT?

It depends whether or not you can deduct the VAT for promotional gifts. Basically you can’t deduct VAT for these costs. But, when you give a type of promotional gift the receiver would be able to deduct himself; then you are allowed deduct the VAT.

An example:

Suppose you send your webdesigner a voucher for the cinema as a gift. He wouldn’t be allowed to deduct the VAT for a cinema voucher himself, so the VAT is not deductible. But when you give him a great mouse (where would a webdesigner be without one?) Then you are allowed to deduct the VAT.


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