Businesses, as the Christmas holidaysthey have the habit of offer freebies to your customers.
In order to understand how to fiscally treat the costs associated with these gifts, it is necessary distinguish between goods that fall within the company’s own activity and goods that, however, do not fall within that activity.
In the first case, that is goods that fall within the company’s own businessas they are produced or marketed by the supplying company itself, the costs incurred are included among the entertainment expensespursuant to thearticle 108, paragraph 2, TUIR.
It follows that it is necessary to apply i deductibility limits linked to revenues or typical operating income, highlighting that the deduction And complete for a unit value not exceeding 50 euros.
In detail, see following tablewhich indicates, based on the amount of revenues and typical operating income, the maximum amount and the deductible spending limit.
I finished Ivathe free transfer of an asset that is the object of the activity taxable VATregardless of the unit cost, a less than the tax relating to the purchase has not been deducted.
In this case the not revenge And mandatory and, therefore, the company can pay the taxalternatively:
- issuing a self-invoice for gifts, to be noted in the VAT sales register;
- noting the operation in the appropriate gift register.
In the second case, that is goods that do not fall within the company’s own businessthe costs incurred for the purchase are included among entertainment expensespursuant to thearticle 108, paragraph 2, TUIRand are treated as indicated in the first case.
I finished Ivathe deductibility of tax on the purchase of goods that constitute entertainment expenses is permitted if the the cost of the single good does not exceed 50 euros.
Furthermore, it does not constitute a transfer of goodspursuant to thearticle 2, paragraph 2, n. 4), Presidential Decree 633/1972the free transfer of goods not the object of the business activity:
- with a unit cost not exceeding 50 euros;
- for which the tax deduction was not made at the time of purchase.
It follows that:
- for the goods of unit cost exceeding 50 euros, the VAT paid on the purchase is non-deductiblewhile the subsequent free transfer is irrelevant for VAT purposes (outside VAT range);
- for the goods of unit cost less than 50 euros, VAT paid on the purchase is deductiblewhile the subsequent free transfer is irrelevant for VAT purposes (outside VAT range).
Finally, with regard to the determination of the tax base hard work for them joint-stock companies e the cooperativethe costs for gifts are deductible for the amount allocated to the income statement.
Differently, for them commercial partnership freebies not they are deductible for Irap purposes.
Ded questions to explore the various facets of the topic:
1. What are the key principles for companies to follow when treating the costs associated with corporate gifts?
2. How does the nature of the gift (whether it falls within the company’s own activity or not) impact the tax treatment?
3. What are the distinguishing features between goods that fall within a company’s own business compared to those that don’t?
4. Can you explain the deductibility limits linked to revenues or typical operating income for gifts that fall within a company’s own business?
5. What happens when corporate gifts exceed the deductible spending limit?
6. How does VAT work for gifts that don’t fall within a company’s own business?
7. What happens when the cost of a single gift exceeds 50 euros under the VAT exemption rule?
8. Can you provide an example of how to handle corporate gifts in practice, taking into account the different scenarios and tax implications?
9. What challenges do companies often face when it comes to corporate gifting, and how can they navigate these issues effectively?
10. How do the tax rules for corporate gifting differ for joint-stock companies, cooperatives, and commercial partnerships?
