VAT on business gifts: deductible up to €227 per relationship/year. WKR 2026: 2% free space, 80% final levy if exceeded. EU gifts: 0% VAT for B2B. Cadeo choice gifts from €15, invoice in the company name.
VAT, Final Levy & Cross-Border Gifts — The Complete Tax Guide for Business Gifts [2026]
You want to surprise your team or clients with a great gift. But behind every business gift lies a web of tax rules: VAT thresholds, WKR free space, profit deduction and — if you operate internationally — cross-border VAT as well. In this guide, we list all the rules for 2026, with calculation examples and practical tips to give smartly from a tax perspective.
VAT on business gifts is deductible as long as you stay below €227 per relationship per year. Gifts to your own employees fall under the WKR — if you exceed the free space (2% up to €400,000, then 1.18%), you pay 80% final levy. For cross-border B2B gifts within the EU, 0% VAT applies via the reverse-charge scheme. A choice gift through Cadeo simplifies administration: one invoice in the company name, from €15 per recipient.
1. The tax landscape of business gifts in the Netherlands
Business gifts are not a simple tax item. The Tax Authority distinguishes between three situations: a gift to an external relationship (client, supplier, partner), a gift to your own employees, and a gift that crosses the border. Each situation has its own rules, thresholds and pitfalls.
For relationship gifts to external parties, VAT deduction (the BUA threshold of €227) and profit deduction (mixed costs) play the main role. For employee gifts, everything revolves around the work-related costs scheme: free space, final levy and the €25 rule for personal gestures. And for international gifts, you need to consider the reverse-charge scheme, customs formalities and local VAT rates.
| Situation | Tax regime | Main threshold |
|---|---|---|
| Gift to client/relationship | VAT deduction + profit deduction | €227 excl. VAT per relationship/year |
| Gift to own employees | WKR free space | 2% / 1.18% of payroll |
| Personal gesture | Outside WKR | Max €25 incl. VAT |
| Gift to an EU country (B2B) | Intra-Community / reverse charge | 0% VAT, recipient accounts for it |
| Gift outside the EU | Export / customs | 0% VAT, import duties possible |
The good news: once you understand the structure, you can make the most of your gifting budget. In the next sections, we walk through each regime step by step — including calculation examples and tips you can apply right away. More about the work-related costs scheme in detail can be found in our WKR guide.
2. VAT on relationship gifts — explained: the €227 threshold
VAT on relationship gifts is deductible, but not without limits. The Decree on Exclusion of Input VAT Deduction (BUA) sets a threshold of €227 excluding VAT per relationship per calendar year. Stay below it, and you deduct the full VAT. Go above it, and the deduction is lost on the entire amount — not just on the excess.
Calculation example — VAT deduction for relationship gifts
You send 20 clients a choice gift of €50 each. Total: 20 × €50 = €1,000 excl. VAT. Per relationship €50 — well below the €227 threshold. You deduct the full VAT: 20 × €10.50 (21%) = €210 back from the Tax Authority.
If you later also send that same client a birthday gift of €200? Then the total is €250 per relationship — above the threshold. You lose the VAT deduction on the entire amount of €250.
An important condition: you may only deduct the VAT if the recipient would have been able to deduct the VAT themselves at that time. If you give a gift to a private individual, a VAT-exempt institution or a non-VAT-liable party, the VAT is not deductible anyway — regardless of the amount.
Cadeo tip: keep a gift register
Record what you give each relationship in a calendar year. That way, you avoid unintentionally going over the €227 threshold. In Cadeo, your dashboard shows exactly which relationships have already received a gift and for what amount — ideal for your administration.
Note: the €227 threshold applies per relationship, not per contact person. If you send three contact persons at the same company a gift of €100 each, the company counts as one relationship and the total is €300 — above the threshold. More about the combination of relationship gifts and tax rules can be found in our relationship gifts guide.
3. WKR: free space, final levy & using it smartly
If you give a gift to your own employees — a Christmas hamper, a birthday present, an anniversary gift — it falls under the work-related costs scheme (WKR). The WKR offers employers a "free space" within which you can provide reimbursements and benefits tax-free. In 2026, that free space is:
On the first €400,000
of taxable payroll = max €8,000 free space
On the excess
above €400,000 payroll
Final levy
on every euro above the free space
Calculation example — avoiding final levy
Your company has a payroll of €600,000. Free space: (2% × €400,000) + (1.18% × €200,000) = €8,000 + €2,360 = €10,360.
You give 80 employees a Christmas gift of €75. Total: €6,000. Including a staff outing (€3,000) and birthday gifts (€2,000), you reach €11,000. You exceed the free space by €640.
Final levy: 80% × €640 = €512 extra tax. You pay this through the payroll tax return in the following year.
The trick is to plan ahead. At the beginning of the year, map out which employee expenses you expect: Christmas hampers, anniversaries, birthdays, the summer outing. That way, you know how much space remains and avoid an expensive surprise. In our WKR tax guide, you will find a complete step-by-step plan for making the most of your free space.
Cadeo tip: control the budget per gift
With a choice gift through Cadeo, you set the exact amount per recipient in advance — from €15. No surprises afterwards, and the invoice is immediately your WKR administration. With the GaaS model, you only pay for gifts that are actually redeemed.
4. Profit deduction for relationship gifts — Income Tax vs Corporate Income Tax
In addition to VAT deduction, you can also deduct the costs of relationship gifts from your profit, in part. The Tax Authority treats relationship gifts as mixed costs: partly business-related, partly personal. How much you may deduct depends on your business structure.
| Business structure | Deduction percentage | Example (€1,000 in gifts) |
|---|---|---|
| Income tax entrepreneur (sole proprietorship, general partnership, limited partnership) | 80% of the costs | €800 deductible, €200 not |
| Corporate income tax liable (BV, NV, foundation) | 73.5% of the costs | €735 deductible, €265 not |
There are conditions. The gift must be occasional (not a structural payment), there must be no quid pro quo, and the recipient must be an existing relationship. A thank-you gift after a successful collaboration? Perfect. A monthly "gift" that is effectively payment for services? Then the tax authorities will treat it as costs and different rules apply.
Note: combining VAT + profit deduction
VAT deduction and profit deduction are two separate schemes that run alongside each other. For the same gift, you can both reclaim the VAT (if you stay below €227) and deduct 80% or 73.5% of the costs from your profit. It pays to use both.
For gifts to your own employees, it works differently: those fall under the WKR and are not deductible as relationship gifts. The costs are still deductible as business expenses, but the tax treatment runs through payroll tax. Keep the two streams — relationships and employees — separate in your administration. More about budgeting for business gifts can be found in our budgeting guide.
5. Cross-border gifts — EU & beyond
Operating internationally? Then the tax puzzle becomes much more complex. Fortunately, the basic rules are clear once you distinguish between EU countries and the rest of the world.
Within the EU: reverse-charge scheme
If you send a business gift to a VAT-liable recipient in another EU country, the intra-Community supply applies. You invoice with 0% VAT and the recipient accounts for the VAT in their own country (reverse charge). Conditions: the recipient has a valid VAT identification number, you can show that the goods actually crossed the border, and you include the delivery in your Intra-Community Supplies Return (ICP).
Example — Gift to a Belgian client
You send a choice gift worth €75 to a Belgian company (VAT-liable). You invoice €75 with 0% VAT and state "VAT reverse-charged" on the invoice. The Belgian company declares 21% Belgian VAT in its own return. You include the delivery in your ICP return.
Outside the EU: export
If you send a gift to a country outside the EU, the 0% rate for exports applies. The recipient may face local import duties and VAT. For a business gift from the Netherlands, the sender is responsible for the export declaration at customs. It is wise to check in advance which costs the recipient may incur — the surprise should be positive, not a customs bill.
Cadeo tip: international gifts without customs hassle
Cadeo delivers in the Netherlands, Belgium, Germany and the rest of the EU. The recipient chooses for themselves and enters the delivery address — no customs paperwork, no import duties, and an English-language portal is available. Ideal for remote and international teams.
6. The personal gesture — the €25 rule many employers miss
Not every employee gift has to count against the free space. The Tax Authority recognises the personal gesture: a small gift for a special moment, which falls outside the WKR. Think of flowers when someone is in hospital, a cake when someone passes an exam, or a funeral bouquet.
The conditions are strict: the invoice value is a maximum of €25 including VAT, the gift is customary in society for such occasions, and there is a personal reason (birthday, birth, marriage, illness). A Christmas hamper does not count as a personal gesture — it goes to the whole team and is therefore a benefit under the WKR.
Combining smartly saves free space
Give a personal gesture of €25 for a birthday (outside the WKR) and reserve your free space for the larger Christmas gift. That way, you use both schemes optimally. Read more in our guide on automating your gift policy.
The €25 rule is especially valuable for companies that already use most of their free space for other benefits. By recording birthdays and special moments as personal gestures, you keep WKR space available for the bigger gifting moments. Just make sure you document the reason and the amount properly — the Tax Authority may ask for it during an audit.
Common mistake
A €25 gift card is not a personal gesture. The Tax Authority considers gift cards to be remuneration in kind, regardless of the amount. A bouquet of flowers or a cake worth €25 is fine, a gift card is not. Choose something physical or use the €25 as a WKR benefit.
7. How a choice-gift platform simplifies your tax administration
Most mistakes with business gifts are not caused by intent, but by poor administration. You forget to track how much you gave to one relationship, you miss the WKR threshold, or you forget the VAT reverse charge on an international gift. A central platform solves this.
One invoice
All gifts on one invoice in the company name — straight into your accounts
Budget per recipient
Set the exact amount in advance — never more, never less
Dashboard as proof
Who, when, what amount — automatic audit trail
At Cadeo, it works like this: you set up a campaign with a fixed amount per recipient (from €15). You receive one invoice in the company name, net 30 days. In your dashboard, you can see exactly which recipients have chosen their gift, for what amount, and when. With the GaaS model (Gifting as a Service), you only pay for gifts that are actually redeemed — with a monthly consolidated invoice afterwards.
For your accountant, this is ideal: one invoice per campaign with a clear description, ready to book directly as a WKR benefit (employees) or relationship gift (external relationships). No loose receipts, no unclear payments, no discussion about value. And because the recipient chooses from 1,200+ products from local, impact-driven brands, you know the gift will be appreciated — the 95% redemption rate proves it.
Cadeo tip: separate relationship gifts and employee gifts
Create separate campaigns in Cadeo for client gifts (relationship gift, VAT deductible) and team gifts (WKR). That way, the bookkeeping is split right away and you know exactly how much you spend under each tax regime. Do you already know our compliance guide to gift legislation?
Frequently asked questions about VAT, final levy & business gifts
Yes, provided you stay below the BUA threshold of €227 excluding VAT per relationship per calendar year. In addition, the recipient must also be VAT-liable themselves. If you give a gift to a private individual or a VAT-exempt institution, the VAT is not deductible. If you exceed €227 per relationship, the VAT deduction is lost on the entire amount — not just the excess. So keep a register of all gifts per relationship.
If you go above your free space, you as the employer pay 80% final levy on the amount by which you exceed the threshold. You report that levy through the payroll tax return. The employee does not notice anything — the tax is entirely for the employer's account. It therefore pays to monitor your free space throughout the year and plan large expenses such as Christmas hampers in advance.
Relationship gifts are mixed costs. If you are an income tax entrepreneur (sole proprietorship, general partnership, professional partnership), you deduct 80% of the costs from your profit. If you are liable for corporate income tax (BV, NV, cooperative, foundation), that figure is 73.5%. The rest is not deductible. Note: this is separate from VAT deduction. You can use both schemes alongside each other to make the most of the tax benefit.
That depends on the destination. For a B2B delivery within the EU, the reverse-charge scheme applies: you invoice with 0% VAT and the recipient accounts for the VAT in their own country. The recipient must have a valid VAT number. For exports outside the EU, 0% VAT also applies, but the recipient may face local import duties. For a gift to a private individual in another EU country, distance-selling rules apply and local VAT may be due.
A relationship gift is given to an external party (client, supplier) and falls under VAT deduction and profit deduction. A personal gesture is given to your own employee at a special personal moment (birthday, birth, illness) and falls outside the WKR as long as the value stays below €25 including VAT. Note: gift cards do not count as personal gestures, even below €25. Choose something physical, like flowers or a cake.
Yes, a choice gift through a platform such as Cadeo is treated for tax purposes as a relationship gift when you give it to an external relationship. The invoice value is the amount you set per recipient. As long as the total per relationship per year stays below €227 excl. VAT, the VAT is fully deductible. The advantage of a choice gift: the value is fixed in advance and transparent on the invoice, which simplifies administration.
Keep the invoice, the recipient's name (relationship or employee), the amount, the date and the reason for each gift. For relationship gifts: keep a register per relationship so you can monitor the €227 threshold. For employee gifts: record whether it falls under the WKR or counts as a personal gesture. A choice-gift platform like Cadeo automatically generates an audit trail with all the necessary data in the dashboard — exportable directly for your accountant.
