Geschenke an Geschäftsfreunde: die 50-Euro-Grenze richtig nutzen

From October onwards, the first Christmas presents for clients and business partners start landing in the bookkeeping, and with them the question of what is actually deductible. The key figure is 50 euros per recipient and financial year under § 4 (5) sentence 1 no. 1 EStG. It looks harmless, but it is a cut-off limit: one cent above it and the entire amount is no longer deductible, input VAT included. Here you get the limit in detail, the record-keeping duties, the flat-rate taxation under § 37b EStG and a checklist for your 2026 gift campaign.

What counts as a gift for tax purposes

A gift is a gratuitous benefit that is not intended as consideration for a specific service by the recipient and has no direct temporal or economic connection with any consideration. It can be an object, but also a service or a voucher.

The following are not gifts in this sense:

• Free extras and discounts tied to a purchase. Here the element of gratuitousness is missing.
• Prizes in raffles and competitions, to the extent that participation constitutes consideration.
• Hospitality. That has its own rule in § 4 (5) sentence 1 no. 2 EStG, with the 70 percent deduction and the strict evidence requirements we set out in our article on entertainment expenses.
• Benefits to your own employees. Those fall under wage tax law, not under the 50-euro limit. More on that below.

The 50-euro limit in detail

§ 4 (5) sentence 1 no. 1 EStG prohibits the deduction of gifts to persons who are not employees of the taxpayer where the acquisition or production costs of the items given to one recipient in the financial year exceed 50 euros in total. The limit was raised from 35 to 50 euros by the Wachstumschancengesetz and applies to financial years beginning after 31 December 2023, so it is unchanged for 2026.

Four details decide the outcome in practice:

1. A cut-off limit, not an allowance. At 50.00 euros everything is deductible, at 50.01 euros nothing is. It is not just the excess cent that is struck out, but the entire expense.
2. Per recipient and financial year, not per occasion. If you send the same client a 25-euro bouquet in May and a 30-euro case of wine in December, you are at 55 euros and lose the deduction for both.
3. Net or gross, depending on input VAT. If you are entitled to deduct input VAT, the net value counts. If you are not, for example as a small business or with VAT-exempt output supplies, the gross value including VAT counts.
4. Packaging and shipping. Under the tax authorities' view, the cost of marking the item as an advertising medium and of packaging is not part of the acquisition cost. Elaborate gift wrapping, by contrast, becomes part of the gift.

The record-keeping duty is often overlooked

Even if you stay below 50 euros, the deduction can fall away. § 4 (7) EStG requires gift expenses to be recorded individually and separately from other business expenses. Anyone booking gifts somewhere between office supplies and advertising costs risks losing the deduction on purely formal grounds.

In practice that means one dedicated account for gifts up to 50 euros and a second for gifts above 50 euros. And the recipient's name has to be apparent from the entry or a document. For a collective entry covering many similar small gifts, a reference to an attached list of recipients is sufficient. If the recipient is not named, the tax office can additionally refuse the deduction under § 160 AO.

Input VAT: § 15 (1a) UStG follows suit

VAT follows income tax law here. Under § 15 (1a) UStG the input VAT deduction is excluded for expenses covered by the deduction prohibition in § 4 (5) sentence 1 no. 1 EStG. So if the gift exceeds 50 euros, you lose not only the business expense deduction but the input VAT as well. For a hamper costing 80 euros net, that is 80 euros of non-deductible expense plus 15.20 euros of lost input VAT.

Flat-rate taxation under § 37b EStG

For the recipient, a gift is in principle taxable business income. That is awkward for the business relationship and practically impossible to control. § 37b EStG therefore allows you to take on the tax yourself.

• Rate: 30 percent of the value of the benefit, plus 5.5 percent solidarity surcharge and flat-rate church tax. In total you land at roughly 33 to 34 percent depending on the federal state.
• Tax base: the expenses including VAT.
• Election: the flat rate has to be applied uniformly to all benefits of a financial year. You can, however, decide separately for benefits to third parties (§ 37b (1) EStG) and to your own employees (§ 37b (2) EStG).
• Upper limits: benefits whose value per recipient and financial year exceeds 10,000 euros are excluded, as are individual benefits above 10,000 euros.
• Notification: under § 37b (3) sentence 3 EStG you have to inform the recipient that you have taken on the tax. A short note on the greeting card or in the covering letter is enough.

Watch out: the flat-rate tax is itself a gift

This is the trap that upsets many calculations. In its judgment of 30 March 2017 (IV R 13/14) the Federal Fiscal Court held that the flat-rate tax assumed under § 37b EStG is a further gift to the recipient. It falls under the deduction prohibition to the extent that the value of the gift alone, or together with the flat-rate tax, exceeds the limit. The judgment concerned the then 35-euro limit, but the same logic applies to the 50 euros.

The safe route: calculate the gift plus the flat-rate tax together to stay below 50 euros. At around 33.75 percent total burden, that means a gift value of about 37 euros. A gift of 37 euros plus 12.49 euros of flat-rate tax comes to 49.49 euros and remains fully deductible.

Promotional items and personal-occasion gestures

Two exceptions noticeably ease matters in practice:

Promotional giveaways. Under the Federal Ministry of Finance circular of 19 May 2015 on the application of § 37b EStG, benefits in kind up to 10 euros count as promotional giveaways and are not included in the flat-rate taxation. What is meant here are pens, notepads, lighters or pocket diaries carrying your logo, that is, classic advertising media. The business expense deduction is preserved and no taxable income arises for the recipient.

Gestures on a personal occasion. Gifts up to 60 euros gross given because of a special personal event, such as a birthday, a wedding or the birth of a child, are not benefits within the meaning of § 37b EStG. Important: Christmas is not a personal occasion. The Christmas present does not fall under the 60-euro rule but under the 50-euro cut-off limit.

Distinguishing gifts to your own staff

The 50-euro limit does not apply to your own workforce, because § 4 (5) sentence 1 no. 1 EStG expressly covers only non-employees. Benefits in kind to employees are fully deductible as business expenses but generally constitute wages for the employee. Here you work with different instruments:

• the 50-euro monthly benefit-in-kind threshold under § 8 (2) sentence 11 EStG, for example via voucher cards, as described in our article on employee voucher cards,
• the 60-euro limit for gestures on a personal occasion,
• the 110-euro allowance for company events under § 19 (1) sentence 1 no. 1a EStG, see our article on the 2026 Christmas party.

Checklist for the 2026 gift campaign

1. Keep a recipient list. A simple register with name, occasion, date and value is enough. It is the single most important piece of evidence in a tax audit.
2. Check the annual total. Before the Christmas campaign, look up who has already received something during the year.
3. Use separate accounts. Book gifts up to 50 euros and above 50 euros on separate accounts, § 4 (7) EStG.
4. Decide on the flat rate. If yes, then uniformly for all benefits to third parties in the financial year, and choose the gift value so that gift plus tax stays below 50 euros.
5. Inform the recipient. One sentence in the covering letter satisfies § 37b (3) sentence 3 EStG.
6. Keep giveaways separate. Record promotional items up to 10 euros separately so they do not burden the calculation unnecessarily.

Who keeps this clean day to day

The 50-euro limit rarely fails because of intent and almost always because of the entry: wrong account, missing recipient, two gifts in the same year not added together. At Buchführungsheld, real bookkeepers set up the right accounts, maintain the gift register and get in touch before a recipient slips over the limit. All at a fixed price, with no hourly billing. If you want to set up your 2026 Christmas campaign properly, book a free initial consultation.

Frequently asked questions

What is the limit for gifts to business partners in 2026?

50 euros per recipient and financial year under § 4 (5) sentence 1 no. 1 EStG. For businesses entitled to deduct input VAT the net value counts, otherwise the gross value. It is a cut-off limit: if it is exceeded, the deduction is lost for the entire amount.

Does the 50-euro limit apply per gift or per year?

Per recipient and financial year. All gifts to the same person are added together within the financial year. Two gifts of 30 euros each to the same client therefore result in a complete loss of the deduction.

Do I have to take on the flat-rate tax under § 37b EStG?

No, it is an election. If you exercise it, it applies uniformly to all benefits of a financial year, though you can decide separately for third parties and your own employees. Without the flat rate, the recipient has to tax the benefit as business income themselves.

Does the flat-rate tax count towards the 50-euro limit?

Under the Federal Fiscal Court judgment of 30 March 2017 (IV R 13/14), the flat-rate tax assumed is a further gift and can cause the limit to be exceeded. So calculate the gift and the flat-rate tax together and keep the total below 50 euros.

Are promotional items with a company logo also affected?

Benefits in kind up to 10 euros count as promotional giveaways under the Federal Ministry of Finance circular of 19 May 2015 and are not included in the flat-rate taxation under § 37b EStG. Typical examples are pens, notepads or pocket diaries with a company imprint. The business expense deduction is preserved.

How do I have to book gifts?

Individually and separately from other business expenses, as § 4 (7) EStG requires. In practice that means two separate accounts for gifts up to 50 euros and above 50 euros, plus the recipient's name, either in the entry itself or via an attached list of recipients.