Business Gifts: How to Avoid Tax Surprises?
August 2026 - A bottle of wine for a loyal customer, a gift card for an employee, or a promotional gift to kick off the summer vacation: in Belgium, specific accounting and tax rules apply to business gifts.
If you apply these rules correctly, you’ll avoid time-consuming disputes with the tax authorities and potential fines. What should you keep in mind as an SME business owner?
Not every gift is treated the same
Are you giving a gift to a customer, supplier, prospect, or employee? In that case, the recipient helps determine how the gift is treated for accounting and tax purposes. Not only does tax deductibility play a role, but VAT rules also vary depending on the type of gift.
Therefore, check in advance which category a gift falls under. After all, a small token of appreciation is treated differently than a luxurious business gift or a gift card for an employee.
Business gifts are usually only partially tax-deductible
If you buy a gift for a business associate, it is generally considered a business expense. However, you usually cannot fully deduct this expense for tax purposes. In most cases, the tax deduction amounts to 50 percent of the expense.
This applies, among other things, to:
wine or champagne
gift baskets
gadgets with or without a company logo
flowers
luxury goods
For accounting purposes, you record the full invoice amount, but on your tax return, you must adjust for the non-deductible portion.
When can you deduct the VAT?
Specific rules also apply to VAT.
For business gifts, you generally cannot recover the VAT paid. However, there is an important exception for promotional gifts of limited value. Think, for example, of a ballpoint pen, calendar, or USB drive on which your company logo is clearly visible.
Because such items primarily serve a promotional purpose, the VAT is usually deductible.
On the other hand, if you give a more expensive gift that does not have a distinct promotional character, you are generally not entitled to a VAT deduction.
Gifts for Your Employees
Different rules apply to gifts for your employees. You can give your colleagues a gift on certain occasions without it automatically being considered taxable income.
This is possible, for example, on:
Sinterklaas or Christmas
New Year’s
retirement
an honorary award
a wedding
a birth
However, statutory maximum amounts and specific conditions apply. If you stay within those limits, these fringe benefits are generally exempt from taxes and social security contributions. If you exceed the permitted amounts, the benefit may be taxed in full or in part as wages.
Gift cards deserve special attention
Many companies today opt for gift cards. However, not all gift cards are treated the same for tax purposes.
A general-purpose gift card that can be spent freely is often treated differently than a gift card with a specific purpose or a benefit that falls under social exemptions.
Therefore, check in advance which tax and social security rules apply. This will help you avoid unexpected taxes or additional social security contributions.
Ensure Accurate Bookkeeping
Proper record-keeping prevents problems during a tax audit. Therefore, always keep:
the purchase invoice
the proof of payment
the recipient’s name, if applicable
the business reason for the gift
With these documents, you can demonstrate that the gift is indeed a business-related gift.
For accounting purposes, business gifts are typically recorded under general expenses or entertainment expenses. For employee gifts, you usually use a separate expense account to ensure both categories are properly recorded.
Consider the tax implications in advance
A business gift doesn’t have to be expensive to make an impression. Still, it’s worth considering the tax implications beforehand. Choosing a promotional item, a luxury gift, or a gift card can make a big difference in terms of tax deductibility and VAT treatment.
By properly recording your gifts, keeping the necessary supporting documents, and adhering to the applicable rules, you can avoid unpleasant surprises later on. If you’re unsure about the correct way to account for a specific gift, consult your accountant beforehand. This way, you can combine a thoughtful gesture with a tax-compliant approach.
