At this time of year, Christmas dinners and Christmas-boxes with which companies give their workers are very common, but are they deductible for the employer?It is very frequent that after the Christmas holidays that the company has a lot of bills from Christmas dinners and Christmas-boxes that have been purchased as gifts for the workers, there is a doubt if the cost and VAT of these invoices is Deductible.We proceed to the analysis of both VAT and Expenditure:VATAs a general rule, the VAT for both Christmas dinners and Christmas-boxes will not be deductible for the company.The law of VAT says that VAT is not deductible on purchases of goods and services that are intended for employees.There are 2 exceptions to this rule, advertising gifts of low value and objects intended for the commercial activity of the company that are given to the workers.CostAs for the expenditure of the Christmas-boxes and dinners, it can be deductible, the Law of the Tax of Societies states that the donations that are made to the personnel of the company according to the customs of the same can be deductible.The company will show that this cost is a custom, so that after the first year we can justify the nature of the expense with the justifications of the previous year.We will have to take into account that the delivery of Christmas-boxes has the consideration of salary in kind, by the market value of the same, and that they should appear in the payroll of the worker. Said remuneration entails the corresponding withholding and personal income tax on the part of the company.On the other hand, it must be remembered that the cost of Christmas-boxes given to customers can be understood as attention to customers, and as such deductible provided they do not exceed the limit of 1% of amount turnover.
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