Communication through objects has become an essential strategy for a company that wishes to develop its activities, to perpetuate its commercial relations and to optimize its visibility. Business gifts can be distributed at any time to different targets: customers, suppliers, etc.
Why offer gifts to your customers?
It is obvious that receiving gifts is always a pleasure. No matter the value, it is the intention that counts. In the professional world, offering gifts to customers allows you to build loyalty, to thank them, to show them how much they mean to the company, but also to show your appreciation. Moreover, it is a good way to perpetuate the business. The advantage? It is a formidable and cheap communication lever! Of course, the gift allows to mark the occasion, provided that it is distributed at the right time and in the right place: at Christmas, during the end of the year celebrations, during a trade show, at the time of the launch of a product or a service.
Business gifts: what are the rules?
We speak of business gifts when it is a present offered to a target without expecting anything in return. Indeed, it is normal that this small gesture was carried out in the interest of your company: to increase the visibility, to create loyalty and to thank customers… On the other hand, the strategy should not oblige the target to buy a service or a benefit. Similarly, the gifts offered must not be illegal or prohibited by legal provisions. If you meet these conditions, the expenses related to the purchase of the promotional items are tax-deductible. However, the price of the gifts must not be excessive and must be proportional to the activity of the company, its size, its turnover… If the amount exceeds 3,000 euros, it should be detailed in the detailed statement of general expenses, a document to be attached to the income tax return. If you fail to do so, you will be subject to a penalty of 5% of the amounts not reported on this table.
What about VAT?
When you purchase your gifts from a specialized company, the products are generally subject to VAT. Normally, the VAT for business gifts is not recoverable, because a product given away for free is not taxable. Why not? Because the good will not be sold, and therefore will not generate any VAT taxable turnover. However, there are exceptions. Indeed, it is possible to deduct the VAT provided that the unit price of the gift does not exceed 69 € per year and per beneficiary. But in this case, you will have to provide the purchase invoices of the gifts as well as a list of the names of the beneficiaries.