What Tax aspects must be taken into account for promotional gifts?

In the case of promotional gifts, taxes play an important role since personal contributions can be considered a form of “enrich-ment” for the recipient and thus fall under the tax liability.

Article 15.e of the Law on Corporate Tax 27/2014 governs the non-deductible ex-penses and clarifies, in principle, that expenses for donations and gifts are not de-ductible.

An exception, however, applies to the following cases:

  • Expenses for services to customers and suppliers, such as invitations to sporting events, but only up to 1% of company turnover.
  • Expenses incurred by company personnel in accordance with the usual practice. For example, if a Christmas basket is given out every year, this would be a permissible case.
  • Expenses that are intended to directly or indirectly promote the sale of goods and the provision of services. For example, wine boxes (and bottles) that a wine-grower company gives to potential customers.
  • Expenses that correlate with revenue. An example of this would be the costs paid by a company for meals and travel for employees of a subcontractor hired to provide certain services.

It must also be considered that business gifts to employees have tax consequences for them, whereby the value must be included as a benefit in kind with corresponding deduction in the respective salary statement.

In this context, the provisions on income tax refer to the provisions on corporate tax.

With regard to VAT, Article 96 of the VAT Act 37/1992 in item 1 and Sections 5 and 6 states that objects or services in-tended for services to customers, employees or third parties are not deductible.

It must also be considered that business gifts to employees have tax consequences for them, whereby the value must be included as a benefit in kind with corresponding deduction in the respective salary statement.

In this context, the provisions on income tax refer to the provisions on corporate tax.

With regard to VAT, Article 96 of the VAT Act 37/1992 in item 1 and Sections 5 and 6 states that objects or services in-tended for services to customers, employees or third parties are not deductible.

The following are no such objects or services and are therefore deductible:

  • Free samples and product samples with-out recognisable commercial value: Items that are representative of a product group and can only be used for promotional purposes due to their presentation or quantity. For example, perfume samples that some magazines distribute free of charge.
  • Free deliveries of printed materials or objects of a promotional nature: They may not have their own commercial value and must be indelibly marked with the advertising lettering (company logo). Their value must be less than EUR 200.00 per recipient and year.


Autor: Fernando Lozano
Autor: Claudia Cascant