Taxes and Gifts: Treatment

We approach Christmas and many companies are struggling with the choice of gifts to be made to customers and suppliers with whom you are entertained business relationships.

Must keep in mind the fiscal discipline of gifts, as the same has been amended by the 2008 Budget.

Cost

The cost of the assets to be relinquished is fully deductible if less than € 50 (instead of the previous limit of € 25.82).

VAT

Nothing is changed to theme instead of VAT: the tax paid on the purchase of gifts is deductible if the tax per unit is less than € 25.85.

Special attention is given to such other limit as non-deductible VAT must be added to the cost of the asset and may exceed the limit of € 50. If this limit is exceeded is affected the deductibility of the cost incurred for the purchase of the property.

EXAMPLE: Think of a good cost € 42 + VAT 20% (€ 8.4): Since the tax is greater than € 25.82 tax is not deductible and must be added to the cost. At this point the total cost of the asset (€ 50.40) is higher than the limit of € 50 and therefore can not be considered a homage entirely deductible.

To check the cost limit deductible should therefore take into account the effect of non-deductible VAT. In order to guarantee the full deductibility of the cost approach requires that the taxable amount does not exceed the following limits:

rate of VAT own good

Taxable maximum

20%

€ 41.66

10%

€ 45.45

4%

€ 48.07

Of course, as previously stated, in order to recover the VAT it is necessary that the taxable amount of the asset is less than or equal to € 25.82.

Christmas gift basket

With regard to the gifts should be noted that the deductibility of VAT is also permitted in the case of purchase of food and beverages, provided with a unit cost of less than € 25.82.

If the gift is made up of a set of assets constituting a single gift box (consider the common case of Christmas basket), to verify the deductibility of the cost and for the deductibility of VAT you have to consider the cost per unit in its complex, rather than the individual components.

Professionals

The allocation professionals has not changed:

* VAT is deductible if the tax is less than or equal to € 25.82 (as for businesses);

* As regards direct taxation, there is no specific provision that applies to the assets to be relinquished. The cost incurred for the purchase of goods to pay homage spending is therefore considered to represent, then deductible up to 1% of the amount earned in the tax period.

 

23/11/2009

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Translated via software

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Source:

Italian version of ReteArchitetti.it