The Tax Regimen For Corporate Gifts - Income Tax, Regional Tax (IRAP) And VAT

The Tax Regimen For Corporate Gifts - Income Tax, Regional Tax (Irap) And Vat

SUMMARY

1 Introduction

2 Income Tax and Local Tax (IRAP)

2.1 Corporate gifts to Clients

2.2 Corporate gifts to employees

2.3 IRAP (Regional Tax)

2.3.1 Gifts to Clients

2.3.2 Gifts to employees

2.4 Artists and Professionals

2.4.1 Gifts to Clients

2.4.2 Gifts to employees

3 VAT

3.1 Gifts of goods produced by the enterpri

3.1.1 Coveyance's documentation

3.1.2 Free samples

3.2 Gifts of goods not produced by the enterprise

3.3 Gifts to employees

4 Gifts made by "purchase's vouchers"

1 INTRODUCTION

The awareness of gifts by enterprises and professionals represents an usual habit, particularly under festivities and anniversaries.

Here below we summarize the most important aspects of the tax regimen of those transfers within the area of income, regional taxes and VAT.

2 INCOME AND REGIONAL TAXES

Costs suffered for gifts' distribution can assume a different income nature if goods are delivered to:

clients; employees or workers assimilated to employees. 2.1 GIFTS TO EMPLOYEES

In general, costs suffered for gifts delivered to clients are deductible:

entirely, if the unitary value of gifted goods addressed to a single subject doesn't exceed Euro 50,00 (limit increased by the Financial Law for 2008 starting from the fiscal year following the one ending on December 31st 2007; until that date the limit was fixed at Euro 25,82). within the year in which costs are suffered under the limits foreseen by the Ministry Decree dated November 19th 2008, if the value of the gift exceed Euro 50,00 or substitutive vouchers are distributed (since they are considered representation expenses). In order to determine the "unitary value" of the delivered gift, the following rules must be respected:

the gift must be evaluated in its whole (i.e. Christmas Box), and not with reference to single items included in the gift; the purchasing cost includes accessorize costs (transportations, un-deductible VAT, etc.). In particular, considering that VAT is not deductible just for gifts with a unitary value exceeding Euro 25,82, the amount paid for gifts is totally deductible only if the amount taxable for VAT is:

48,08 euro, if VAT rate is 4%; 45,45 euro, if VAT rate is 10%; 41,67 euro, if VAT rate is 20%; 41,32 euro, if VAT rate is 21%. 2.2 GIFTS TO EMPLOYEES

In general, the cost suffered by the employer to purchase goods to be gifted to employees is deductible from corporate income according to the rules...

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