Year-end business gifts: how much can you deduct as a self-employed person?

How much of a client gift is deductible?

A gift to a client, supplier or partner to maintain the relationship is a business gift. The Belgian Income Tax Code only allows 50% of its cost to be deducted: the rest stays at your expense without reducing your taxable profit. Reception costs follow the same rule.

It applies to the self-employed person trading in their own name, who deducts business expenses from personal income tax (IPP), and to the SRL. In a company, the non-deductible part is added to the disallowed expenses in the corporate income tax return: the company pays for the gift, but only part of it reduces its taxable profit.

The gift must also remain a business expense: given in the course of the activity, to someone connected with it. A present to a relative with no link to your clients does not become deductible because it was paid with the business card.

Gift, reception, restaurant: three similar but separate rules

The end of the year often mixes three expenses that the tax authority treats differently. The hamper sent to a client and the reception organised for them are 50% deductible. A business meal at a restaurant is 69% deductible, because only 31% of those costs is excluded.

One exception changes everything: if you recharge these costs to a third party and the invoice states them explicitly and separately, they become 100% deductible again. Think of an event organiser who invoices the meal to their client on a separate line.

What about VAT on your year-end gifts?

VAT follows its own rules. It is not deductible on reception costs nor, with some exceptions, on restaurant and hotel costs. For a gift, the difficulty lies elsewhere: goods bought with VAT deducted and then given away free are in principle a taxable withdrawal, which cancels the benefit.

Only samples and low-value business gifts escape this withdrawal, under the conditions of a royal decree, maximum value included. Before deducting VAT on a hamper, have your accountant check that the gift meets those conditions. If you use the small business VAT exemption, the question does not arise: you deduct no VAT at all. The other rules are on the page about VAT for the self-employed.

Supporting the expense and preparing for year-end

A business gift is supported like any expense: an invoice in the name of your business and a record of the business link, such as the list of clients who received it. These documents are kept for 10 years. Without them, the tax authority can refuse the deduction, even the 50% share.

Do not confuse this with gifts to your staff, which follow other social security and tax rules. And keep a sense of proportion: spending to cut tax never returns more than it costs, since part of the gift is not deducted at all.

To lower your tax before 31 December, other levers weigh more: the supplementary pension premium, to be worked out with the PLCI simulator, and the other deadlines listed in the article on what to do before 31 December. The overview of deductible expenses covers the other expense categories.

For your records, the simplest approach is to keep the list of recipients when you buy, not the following spring when your accountant asks for it. For each gift or meal, note a few details, which are often enough to answer a question from the tax authority:

• The date and the matching invoice.
• The recipient: name of the person and of their business.
• The business link: current client, prospect, supplier, partner.
• The type of expense: gift, reception or restaurant meal, since the deductible percentage depends on it.

Further reading

The pages on this site that explore each of the points covered here in more depth.

• Deductible expenses for the self-employedExpenses deductible in full, in part or not at all.
• Before 31 DecemberPLCI, pension savings, investments: what is at stake at year-end.
• PLCI simulatorWork out the maximum deductible premium before year-end.
• VAT for the self-employedRates, schemes, returns and VAT deduction.
• Business expenses: definitionWhat the self-employed can deduct and how to support it.

Frequently asked questions