Customer gifts: what tax limit in 2026?

Updated April 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 régimes coexist: VAT deduction on one side, and expense deductibility on the other.

In 2026, the French tax administration applies a threshold of 73 euros including VAT per item, per beneficiary and per year to assess VAT recovery on low-value gifts. 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 régime. For VAT, the €73 threshold (from Article 298 of the French Tax Code) allows full recovery of tax on low-value unit 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 régime.

This amount of 73 euros including VAT corresponds to the ceiling below which a business gift is considered a low-value gift under Article 298 of the French General Tax Code. It was revalued in 2021 (previously set at 69 euros) and has not been modified since.

When is VAT déductible?#

VAT on the purchase of a customer gift is fully déductible when the unit cost including VAT does not exceed 73 euros per beneficiary per calendar year. This threshold is assessed item by item, not by cumulating all gifts given to the same client.

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 déductible. 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 déductible 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 régime is not the same depending on the classification.

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

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

• 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 déductible because the €73 threshold is not exceeded. The expense is déductible 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 déductible (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 déductible 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 régime. 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: impôts.gouv.fr - VAT recoverable on business gifts, BOFiP BOI-TVA-DED-30-30-50 - exclusions from deduction rights, BOI-BIC-CHG-40-60-10 - general expenses, Article 298 of the CGI - low-value gifts, Article 39-1 of the CGI - déductible expenses, Article 257 of the CGI - self-supplies, CCI Paris Île-de-France - tax régime for business gifts, legifrance.gouv.fr)