Belgian stricter rules on business gifts

VAT on business gifts: changes to deduction

Until now, gifts given to clients for commercial purposes did not require VAT to be accounted for unless the value of the gift exceeded €50. This threshold was taken into account on a ´per gift´ basis. As from June, the threshold is computed on an annual basis including all gifts given to a client or supplier.

This means deduction of VAT and obligation to pay VAT will apply in all goods given free of charge within a commercial relationship where the annual value of these goods exceeds €50. These changes were published in the Circular letter issued by the Government on 29 May 2017. As there was no starting date stated on the letter, we may imply that 2017 business gifts would already be subject to the new rules, particularly those gifts given away after the publication of the changes.

VAT obligations extend to other materials

Given the low value is calculated on an annual basis, VAT obligations may extend to leaflets, brochures and other commercial materials given to a client throughout the year. You should review these processes to ensure that potential risks are identified and mitigated in advance.