The French Ministry of Finance recently released information about the possibility of deducting VAT incurred on gifts presented to customers or clients during the upcoming Christmas season.
Companies may deduct for these gifts from their taxable profit, on condition that the gifts are made in connection with the business’ interest and their value is proportionate in relation to the size and turnover of the business. If the total value of gifts exceeds EUR 3,000, additional reporting requirements will apply.
Moreover, although generally input VAT deductions are not available on gifts, for the holiday and end of year celebrations companies may recover the input VAT on low value gifts they offer to customers. To be eligible for this exception, the price of the gift must not exceed EUR 69 for each beneficiary and it must be dedicated to advertising the business.