Gifts to business friends and employees
Gifts to business partners and employees in terms of tax law are also called benefits. The legal treatment of a gift in business life depends on the price , scope and reason for the gift .
Concept gift
Gifts are gifts in cash or in kind . The recipient does not commit to any specific consideration. In addition, there is no economic connection to a consideration. This means that if the gift is, for example, one hundred euros, if the recipient concludes a contract, this is not a gift, as there is an economic connection to the consideration.
Gifts in the business sector must always have a business occasion . Donations made privately are not gifts. A private occasion would be a birthday present. However, a gift for a business partner's birthday to draw attention to yourself is a business occasion.
However, the term gift is n't limited to one thing , like a bottle of wine. This also includes an invitation to sports and cultural events, in VIP areas or travel events.
Giveaways are not gifts
Promotional items that do not cost more than 10 euros to purchase are not gifts. These donations are referred to as scatter advertising and are fully deductible. This includes, for example, a balloon that a shop is distributing for the anniversary.
Entertainment expenses
Entertainment costs remain unaffected by the regulation of the flat rate according to § 37b EStG. Hospitality costs fall under the regulation of Section 4 (5) No. 2 EStG.
Flat rate according to § 37b EStG
The donor can set a flat tax rate for his gift. This means that a 30 percent tax will be charged on the cost of the gift. In addition, 5.5 percent of the tax is due as a solidarity surcharge and church tax. The amount of church tax depends on the federal state in which the company is based.
Tax law option
The flat rate is an option under tax law . This means that the person giving the gift has the choice of whether or not to tax the gift at a flat rate. The right to vote can only be exercised once per calendar year for all gifts.
Maximum limits for flat rates
The flat rate tax may only be applied up to a maximum amount of € 10,000 per year per recipient.
Reporting and payment of flat-rate tax
The flat-rate tax is reported in the income tax declaration and then paid at the due time. This also applies to gifts to business friends.
No flat tax
If the option is exercised against the flat-rate tax, the recipient must pay the tax on the gift himself. To do this, the giver must tell the recipient the price of the gift. The price of the gift is the assessment base of the tax, which the recipient pays himself.
Until the 2007 Annual Tax Act, this regulation was the only way to tax a gift. With the Annual Tax Act 2007, the flat rate was put into effect.
The donor's duty to teach
The giver is obliged to inform the recipient whether he has made the flat rate tax for the gift. If he has not made the flat rate, the giver must inform the recipient of the price of the gift.
Gifts in the accounting
Gifts may reduce the profit as long as a gift was not more than 35 euros. A gift over 35 euros must be booked as "non-deductible".
Calculation basis for the 35 euro limit
Gifts can only be booked as deductible if the cost of the gift does not exceed 35 euros. For a company that is entitled to input tax deduction, the 35 euro limit applies to the net amount. Companies that are not entitled to input tax deduction should consider the limit of 35 euros gross. However, transport and packaging costs do not have to be included, unless special packaging is part of the gift.
It is also necessary to book the gifts individually. This ensures that the gift can be assigned to each individual business partner.
Gifts to employees
If an employer gives his employee a gift for no personal reason and without an obligation to provide consideration, the gift is also taxable.
If the employer giving the gift lump-sum the gift, the gift is still subject to social security contributions for the employee receiving the gift.
Attentions to employees
Attentions to employees are benefits in kind due to a personal event. Therefore, attentions are not considered gifts. Attentions are not considered wages as long as they do not exceed a value of 60 euros (until December 31, 2014: 40 euros). This is an exemption limit , which means: if the limit is exceeded even slightly, the entire value counts as wages subject to tax and social security.
Benefits in kind to employees
According to Section 8, Paragraph 2, Clause 9 of the Income Tax Act, an employer can give his employee a monthly allowance of up to 44 euros. This is also an exemption limit. The benefit in kind that is given to the employee for no personal reason and on the basis of his or her work as an employee is not a gift.
Laws and guidelines
- Section 37b of the Income Tax Act
- Section 4 (5) sentence 1 EStG
- R 4.10 Income Tax
- BMF letter of April 29, 2008 (IV B 2-S-2297-b / 07-0001) and May 19, 2015 (IV C 6 - S 2297-b / 14/10001)
Individual evidence
- ↑ Company event as wages? - businesslohn.de ( Memento from October 23, 2013 in the Internet Archive )
- ↑ Hospitality costs fall under the regulation of Section 4 (5) No. 2 EStG. ( Memento from October 23, 2013 in the Internet Archive )
