CHRISTMAS, A TIME FOR GREETINGS... AND TAX-DEDUCTIBLE GIFTS

Giveaways, gift certificates, events. With Christmas approaching, is it worth making voluntary purchases to reduce your tax burden?

Find out with us!

The primary goal should be to project a positive image of yourself and your business. These types of operations constitute a free service, and expenses for parties and receptions organized for company events and various holidays are considered entertainment expenses.

"It's important that these events are attended not only by employees, but also by customers, suppliers, and institutional representatives," emphasizes Elena Agostinelli, Dwa Consulting's consulting area, "and when it comes to freebies, it's always best to make purchases of less than or equal to 50 euros, even with cumulative invoices specifying the value of each item, so that the VAT is fully deductible."

Professionals, on the other hand, are less comfortable with this: "It's best if they don't deduct VAT to avoid having to issue a self-invoice upon delivery of the gift. The cost will be fully deductible, but with a maximum of 1 percent of the fees earned in the tax period," continues Dr. Agostinelli. If you decide to give a gift worth more than the fateful €50, the VAT will still be non-deductible and the cost fully deductible, but with a maximum of €10 million. Gift certificates and vouchers, however, are not considered freebies; they have different, even more convenient, rules. This is why many entrepreneurs use them for themselves or to reward collaborators, agents, and others. For freelancers and sole proprietorships, the cost of purchasing these vouchers is 75 percent deductible, again within the 2 percent limit of turnover. Meal vouchers for employees are fully deductible, up to €4 per day for paper vouchers and €8 for electronic vouchers.

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