Corporate gifts

Business gifts and VAT: the €73 rule explained

Offering a wine gift set to clients or partners at year-end is a well-established practice. From a tax perspective, two questions arise: is the expense deductible from taxable income, and is VAT recoverable? The answers are not the same.

VAT: recoverable up to €73 incl. VAT per beneficiary per year

VAT on a business gift is recoverable only if its unit value does not exceed €73 incl. VAT per beneficiary per year. Three specific points matter:

• the threshold applies inclusive of all taxes, delivery and packaging fees included when billed with the gift;
• it is annual and cumulative: if you offer two €40 gifts to the same client during the year, the total exceeds €73 and VAT is no longer recoverable on the second gift;
• exceeding the threshold means VAT is completely unrecoverable, not just on the excess amount.

For this reason, many companies calibrate their client gift sets just below €73 incl. VAT.

Deductibility: a matter of corporate interest

Independent of VAT, the cost of the gift is deductible from taxable income if it is incurred in the company's direct interest and is not excessive given its size and the business relationship. There is no single numerical ceiling: tax authorities evaluate on a case-by-case basis.

Supporting documentation to retain

To secure the deduction, retain:

• the supplier's invoice;
• the list of beneficiaries by name, along with their company;
• the business relationship (client, referrer, partner).

When the total amount of gifts exceeds a certain annual threshold (€3,000 to date), they must be declared on the detailed statement of overhead expenses attached to the tax return.

In practice

For a large client base, the simplest solution is to select a main gift set under €73 incl. VAT, reserving larger sets for a few key contacts while foregoing VAT recovery on those.

At Pinot & Chardo, our Signature gift sets are designed to stay below this threshold, including delivery where possible. Discover our corporate wine and champagne gift sets.

This information is general in nature and does not replace professional advice from your accountant.