Tax Treatment of Gifts: Value Limits and Required Bookings

• Gifts are considered as gratuitous benefits that should not be seen as a reward for a specific service from the recipient
• Different VAT consequences depending on the value of the gift
• Physical objects are usually given as gifts, but other services or economic benefits can also be given
• If the recipient provides a service in direct economic or temporal connection to the gift, it is no longer considered a gratuitous benefit but rather a payment for a service
• In such cases, the gift would be subject to VAT as consideration for a service provided by the recipient
• The text provides an overview of the VAT treatment of gifts, specific value thresholds, and necessary bookings.

Source: datenbank.nwb.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---