Customer gifts: what tax limit in 2026?

Offering customer gifts is one of the most widespread business practices in France. Yet the customer gifts tax limit 2026 remains one of the most misunderstood topics among business owners. Contrary to popular belief, there is no single threshold governing the entire taxation of business gifts. In reality, two distinct regimes coexist: VAT deduction on one side, and expense deductibility on the other.

The maximum is 73 euros including VAT per beneficiary and per calendar year for VAT to remain deductible. The cap is set by Article 28-00 A of Annex IV to the CGI (order of 9 June 2021); it is revisable every five years and no revaluation order has been published to date. But this cap is not enough to guarantee the deductibility of the expense for corporate income tax or income tax purposes.

The tax deduction for business gifts follows a dual regime. For VAT, the €73 threshold, set by Article 28-00 A of Annex IV to the French Tax Code, allows full recovery of tax on low-value gifts. For income tax, the expense must meet the standard criteria of Article 39 of the CGI: business interest, non-excessiveness and commercial justification. The customer gifts cap of €73 only concerns VAT — it does not automatically authorize deduction for corporate tax or income tax.

The French tax administration defines a business gift as a low-value item offered to a client, prospect or business partner as part of a loyalty or prospecting effort. To qualify, the gift must meet several cumulative conditions:

• bear the brand or name of the donating company (visible inscription, logo or mark);
• have a promotional or advertising character;
• be given free of charge, without direct considération.

A gift basket, a bottle of champagne or a personalized item distributed during the end-of-year holidays typically falls into this category. Conversely, a restaurant invitation or a show ticket falls under entertainment expenses, subject to a separate regime.

This amount of 73 euros including VAT corresponds to the ceiling below which a business gift is considered a very low value item, under Article 28-00 A of Annex IV to the French General Tax Code. It was revalued in 2021 (previously set at 69 euros) and has not been modified since.

When is VAT deductible?#

VAT on the purchase of a customer gift is deductible where the value of the item does not exceed 73 euros including VAT. The French tax guidance words the limit as follows: very low value goods are those "whose unit value does not exceed the amount set by Article 28-00 A of Annex IV to the CGI, per item and per year for the same beneficiary" (BOI-TVA-DED-30-30-50, § 90).

The prudent reading, and the one the profession applies, is cumulative: gifts made to the same beneficiary over the calendar year are added together. Three 30-euro tokens given to the same client during the year therefore breach the cap, whereas a single 65-euro gift does not. Keeping a record per beneficiary is the only way to demonstrate this in an audit, and it is also what separates a documented gift policy from a series of one-off purchases.

Concrete example: a company gives each of its 50 main clients a gift box worth 65 euros including VAT. The corresponding VAT is fully recoverable. If the same box is priced at 78 euros including VAT, VAT deduction is excluded for the entire amount.

What happens above 73 euros?#

When the unit cost of the gift exceeds the €73 threshold, VAT is no longer deductible. The company must then record the VAT as a non-recoverable expense. This treatment applies to the entire amount, not just the excess portion.

The €73 threshold does not settle the question of tax deductibility of customer gifts with regard to income tax. For a business gift to be accepted as a deductible expense, it must satisfy the requirements of Article 39-1 of the CGI.

Direct business interest#

The expense must be incurred in the interest of the business and be directly related to the corporate purpose. Giving gifts to active clients or identified prospects generally meets this condition. On the other hand, gifts given to relatives without proven business links will be reclassified.

Non-excessive nature of the expense#

The administration examines the total amount of business gifts in relation to turnover and company size. An SME that would spend several thousand euros on customer gifts without relation to its business volume exposes itself to a tax reassessment.

Commercial justification#

Each expense must be justifiable by an identifiable commercial intention: client portfolio loyalty, new product launch, thank-you after a contract. Lack of traceability is the primary reason for rejection during a tax audit.

This distinction is often a source of errors. The applicable tax regime is not the same depending on the classification.

Entertainment expenses (business meals, event invitations, room rentals for client evenings) follow a more restrictive regime. VAT on these expenses is generally not deductible, in accordance with BOI-TVA-DED-30-30-50. The expense remains deductible if the company demonstrates the commercial interest of the expense.

Several traps await companies that do not master the business gifts regime:

• confusing the VAT threshold with a universal deduction permit: the €73 only concerns VAT, not the deductibility of the expense;
• not identifying the beneficiary: the administration requires being able to link each gift to a specific client or prospect;
• offering disproportionate gifts: a €500 gift to a client whose annual revenue is €2,000 will systematically be reclassified;
• forgetting VAT on self-produced gifts: when a company offers a product from its own stock, it must record a self-supply (Article 257 of the CGI) and charge VAT;
• neglecting accounting traceability: without a nominal invoice, delivery note and attribution proof, the expense will be rejected.

Case 1: End-of-year gift boxes#

A SARL buys 80 gourmet boxes at 55 euros including VAT each to give to its clients. VAT is deductible because the €73 threshold is not exceeded. The expense is deductible as commercial costs, provided the supplier invoice and the list of beneficiaries are kept.

Case 2: Premium gifts#

A consulting firm offers its main client a watch worth 350 euros including VAT. VAT is not deductible (threshold exceeded). The expense may be admitted if the firm demonstrates the commercial interest of this exceptional expense. In practice, this type of gift is frequently challenged by the administration.

Case 3: Promotional giveaways#

Pens, notepads or USB drives customized with the company logo, with a unit value of 5 to 15 euros, are fully deductible in VAT and as an expense. These items represent the simplest and least tax-risky case.

The quality of your documentation is your best protection in case of an audit. Here are the documents to keep systematically:

• purchase invoice detailing the nature, quantity and unit price of gifts;
• named list of beneficiaries with company name, address and business relationship;
• internal policy note defining the business gift policy (attribution criteria, annual budget, validation process);
• proof of delivery: delivery note, receipt confirmation or distribution certificate.

Hayot Expertise Advice: On customer gifts, documentation matters as much as the amount. Without clear documentation or business justification, even a modest expense can become questionable during a tax audit.

Unlike gifts offered to staff (subject to URSSAF caps, notably the 5% threshold of the monthly Social Security ceiling for end-of-year gifts), business gifts offered to clients or prospects do not fall under the benefits-in-kind regime. No social contributions are due on these expenses, which remain purely fiscal.

However, if a gift is given to a director or partner of the client company, the administration could see it as an indirect benefit subject to contributions. Caution is advised in these situations.

We help qualify entertainment expenses, gifts and their VAT/accounting treatment before closing. From defining an internal business gift policy to preparing for a tax audit, we secure your practices.

Secure your entertainment expenses

(Official sources: BOFiP BOI-TVA-DED-30-30-50, exclusions from deduction rights; Article 28-00 A of Annex IV to the CGI and the order of 9 June 2021, the 73-euro cap; Article 39-1 of the CGI, deductible expenses; Article 257 of the CGI, self-supplies; legifrance.gouv.fr)