Rules on buying corporate gifts

S

Scouser

Registered User
Messages
128
Are there any guidelines or rules on limited companies purchasing gifts for clients?
 
Paddy199 said:
No. Revenue however disallow it.
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Hi paddy199. How do you mean disallow it? From time to time, and especially around Christmas, I may receive a small hamper or bottle of wine from some companies as appreciation for work carried out for them during the year. Are you saying that these companies cannot deduct such gifts as expenses?
 
Absolutely. Allowable for accounts but not for Revenue. There are many adjustments between the profit per the accounts and the taxable profit figure.

Entertainment expenses are specifically disallowed by statute (section 840 TCA 1997). Staff christmas costs are allowable by concession. All other entertainment, gifts, etc are disallowable.
 
An important point here is that the company is allowed to pay for it however they are not allowed claim it in their corporation tax calculation.
Meaning that they lose out on relief of 12.5% if they have a taxable profit.
 
Thanks all, I didn't think they would be tax deductible, just wanted to know if they could be bought from the company account.

X
 
Just so I'm clear on Corp tax, if a company let's say had zero profit but had non tax deductible expenses of 100 Euro they would pay 12.5% on the 100, is that right?
 
Correct. Disallowable expenses are added back to your profit/loss per the accounts, thereby increasing your taxable profits or turning a loss per the accounts into a smaller loss or a taxable profit.
 
voucher

a company can buy its employees a voucher for max 250 euro anytime in the calender year, is this correct, usually as a tax free xmas bonus.
 
Correct.
Small benefits

Where an employer provides an employee with a small benefit (that is, a benefit with a value not exceeding €250) PAYE, PRSI and Levies need not be applied to that benefit. No more than one such benefit given to an employee in a tax year will qualify for such treatment. Where a benefit exceeds €250 in value the full value of the benefit is to be subjected to PAYE, PRSI and Levies. This concession does not apply to cash payments regardless of the amount
 
Some organisations have policies that prevent their staff from accepting gifts, sometimes gifts above a certain threshold in value. Some organisations will pool all gifts recieved and share them around, to avoid any suggestion of 'buying influence'.
 
Corporate gifts are given to encourage the clients to continue business with the company. These gifts are best to promote a company’s brand in the market in a very effective way. This helps the company to maintain the brand name in the current market.
 
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