Why client gifts are not simply a courtesy
A Christmas hamper, an invitation to a sporting event, or a gadget bearing your company logo can strengthen a business relationship. For a Swiss SME, however, every gift to a B2B client affects three distinct areas: the tax deductibility of income or profit tax, VAT treatment, and the criminal risk linked to active or passive corruption.
The law does not prohibit gifts of modest value in the normal course of business. However, donations, subsidies, and undue advantages do not qualify as expenses justified by commercial use under Art. 58 para. 1 lit. b and Art. 59 LIFD (Federal Direct Tax Act). A poorly documented gift may be added back for tax purposes, trigger a prior tax correction, or, in the most serious cases, constitute corruption of public officials (Art. 322ter SCC) or private-sector corruption (Art. 322octies SCC).
This guide helps business owners, sales managers, and fiduciaries define clear criteria, record transactions correctly in accounting, and use tools such as Accountex to maintain traceability and compliance throughout the year.
Gift, promotional giveaway, or representation expense?
Before purchasing or booking an entry, classify the transaction: the category determines tax treatment, VAT, and reputational risk.
| Type | Typical examples | Tax treatment (guidance) | Compliance risk |
|---|---|---|---|
| Promotional giveaway | Pens, mugs, power banks with visible logo, free samples of your own product | Marketing expense; generally deductible if aimed at promotion and of modest value | Low, if not linked to contractual decisions |
| Courtesy gift | Bottle of wine, artisan chocolate, generic gift voucher for a client contact | Deductible only if of modest value and customary in the sector; otherwise tax add-back | Medium: assess relationship with recipient's decision-making power |
| Representation | Business lunch, invitation to an event with hospitality, concert tickets with an active client | Deductible if linked to business activity and justified by commercial use (Art. 27 and 58 LIFD); burden of proof rests on the taxpayer | Medium to high if excessive or poorly documented |
| Donation / undue advantage | Cash contribution, expensive trip, gift linked to award of a contract | Not deductible; possible add-back under Art. 58 para. 1 lit. b LIFD | High: possible criminal offence; non-deductibility under Art. 58 para. 1 lit. b and, if corrupt, Art. 59 para. 2 lit. a LIFD |
The distinction does not depend on the name you give the expense item, but on its substance: presence of company branding, promotional purpose, sector custom, and absence of expected consideration regarding the recipient's commercial decisions.
Tax limits: what is deductible and what must be added back
In Switzerland there is no universal, binding legal threshold for client gifts, as exists in other European jurisdictions. The principle remains that of an expense justified by commercial use.
Legal entities (LLC, Ltd.)
Benefits to third parties not linked to business activity are not deductible. Gifts of modest value, customary in the business relationship, may be accepted as commercial expenses. Administrative practice and case law often point towards modest, proportionate amounts per recipient and per year, unless sectors follow different customs.
Once the threshold of customary practice is exceeded, the tax authority may reclassify the expense as an unjustified benefit to third parties and add it back under Art. 58 para. 1 lit. b LIFD, increasing taxable profit.
Sole proprietors and partnerships
Similar rules apply to giveaways under Art. 27 LIFD: representation expenses and meals with clients are deductible if justified by commercial use and documented; there is no federal percentage limit, but the authority may challenge disproportionate amounts.
At cantonal level, more restrictive guidance may exist. Always document commercial purpose, recipient, and amount for every transaction.
Note: client gifts ≠ employee gifts
Gifts to staff follow salary rules (salary certificate): from 2026, customary gifts in kind up to CHF 600 per employee and calendar year remain outside the salary certificate; cash gifts are always remuneration. Do not apply the same rules to client accounts: a Christmas hamper for the team goes to personnel costs; the same hamper for an external buyer is a commercial expense with a different tax profile.
VAT: annual threshold and input tax correction
For VAT purposes, free supplies to clients fall within Art. 31 para. 2 lit. c MWSTG (VAT Act) (self-supply / supply without consideration). If there is no business motive, the company must correct the input tax previously deducted on purchase.
For gifts up to CHF 500 per recipient and per year, a business motive is presumed. For promotional giveaways and samples intended to generate taxable revenue, the presumption applies regardless of amount, provided there is a clear promotional purpose.
| Scenario | VAT impact |
|---|---|
| Branded gadget distributed to 200 clients (CHF 30 each) | Input tax deductible; treated as promotional giveaway |
| Gift hamper CHF 350 for a key contact | Below CHF 500/year/person: business motive presumed; no ordinary correction required |
| Weekend CHF 1,200 for the same contact in the same year | Cumulative threshold exceeded: proof of business motive required; if absent, input tax correction on unjustified gifts |
| Own product supplied free of charge | Assess at production cost or market price; verify whether it qualifies as promotional sampling |
Keep an annual register per recipient with the cumulative value of supplies made. Accountex lets you link every warehouse outflow or purchase to a client contact, making it easier to monitor the VAT threshold at year-end.
Anti-corruption rules: when a gift becomes a criminal offence
The Swiss Criminal Code punishes anyone who offers an undue advantage to an employee, agent, or auxiliary of a private company to induce them to perform an act contrary to their duties or in the exercise of discretionary power (Art. 322octies SCC). Corruption of public officials (Art. 322ter SCC) is prosecuted more strictly and tolerates very low or no value thresholds.
Companies may face criminal liability if they fail to adopt adequate organisational measures to prevent offences within their sphere (Art. 102 para. 2 SCC). A generic code of conduct is not enough: operational rules, spending limits, mandatory approval, and a centralised register are required.
Red flags
- Gift before or during a tender process
- Recipient is sole decision-maker on a significant contract
- Payment in cash or via third parties
- Absence of written commercial justification
Acceptable practice
- Symbolic value customary in the sector
- Corporate gift, not personal to the decision-maker
- Internal transparency and prior approval
- Register with date, recipient, and amount
Public sector
- Maximum caution with administrations and state-owned enterprises
- Check the client's internal codes of conduct
- Prefer anonymous promotional giveaways of minimal value
- When in doubt: abstain and consult legal counsel
Compliant accounting under Swiss standards
Under proper bookkeeping (Art. 957 et seq. CO and Swiss GAAP FER), every gift must be posted to the correct account, with supporting documentation and reference to the beneficiary.
| Transaction | Typical account (SME chart of accounts) | Minimum documentation |
|---|---|---|
| Branded promotional items | 6600 Werbeaufwand / Advertising expenses | Supplier invoice, distribution list, photo of branded material |
| Courtesy gift to client contact | 6640 Repräsentationsaufwand or dedicated sub-account | Receipt/invoice, recipient name, company, occasion, internal approval |
| Warehouse product supplied free of charge | 6600 Marketing or 5200 Inventory change (at cost) | Warehouse issue note, valuation, link to client in CRM |
| Tax non-deductible portion | Add-back in tax return (not account 6900 Spenden unless a genuine donation) | Note to financial statements or year-end tax reconciliation schedule |
Record the transaction on the delivery date, not on purchase, if gifts remain in promotional storage. If you pay with a company card, link the transaction to the client contact in Accountex: this simplifies bank reconciliation and preparation of the gift register for internal or fiduciary review.
Retain supporting documents for ten years (Art. 958f CO). In the event of a tax audit or criminal proceedings, the chronological register per recipient is often decisive proof of absence of corrupt intent.
Internal policy: seven rules for your SME
A written policy, approved by management, reduces the risk that individual sales staff exceed acceptable limits without oversight.
- 1Set an annual cap per contact — for example CHF 100 total per client/year for non-promotional gifts, unless approved by the sales director.
- 2Require prior approval for amounts above the threshold or for public-sector clients.
- 3Prohibit cash and undocumented reimbursements for client gifts; use traceable payment methods only.
- 4Maintain a centralised register with recipient, company, value, date, commercial reason, and approver.
- 5Prefer branded giveaways when the goal is visibility, not influencing a negotiation.
- 6Train the sales team on prohibitions during tenders, contract renewals, and sensitive negotiations.
- 7Review the policy annually and update it based on cantonal tax precedents and any internal reports.
Practical examples for Swiss SMEs
IT consulting firm (8 employees)
At Christmas, sends 40 branded pens and notebooks (CHF 25 each) to IT contacts at major clients. Expense booked as marketing, VAT deducted, no tax add-back expected. Gift register updated in Accountex with «promotional» tag.
Outcome: compliant
Wholesale business (GmbH)
The sales manager offers a CHF 450 golf set to a distributor's buyer during renewal of a framework contract. Below CHF 500 VAT/year, but a high value for a single contact. Commercial context documentation and manager approval required; reputational risk if the gift precedes signing.
Outcome: requires further review and documentation
Construction company (LLC)
Thank-you lunch CHF 180 for three municipal contacts after a public contract. High-risk sector: check municipal regulations, limit amount, record participants and topic. Prefer a collective institutional invitation rather than an individual gift.
Outcome: maximum caution — public sector
Food manufacturer
Free samples of the new product (value CHF 12 each) sent to 500 retail outlets. Treated as promotional sampling: warehouse outflow at cost, VAT unproblematic, full deductibility as marketing expense.
Outcome: compliant
Operational checklist before every B2B gift
- ✓Have I classified the transaction (promotional, courtesy, representation)?
- ✓Is the recipient not a public official or, if so, have I checked the applicable rules?
- ✓Does the cumulative annual value for this person remain within internal VAT and tax limits?
- ✓Is there a documentable commercial link, with no link to an imminent decision?
- ✓Have I obtained the internal approval required by the policy?
- ✓Have I recorded expense, recipient, and supporting document in Accountex with the correct counterpart account?
- ✓At year-end, is the gift register aligned with the tax reconciliation schedule?
A disciplined approach to B2B gifts does not limit business relationships: it makes them defensible before the tax authority, the auditor, and — if necessary — the criminal authorities. With clear criteria and traceable data in accounting, courtesy towards clients remains a reputational investment, not a hidden liability.