What's the difference between promotional items, premiums and business gifts?
The end of the year is the perfect time to show your appreciation to your customers, staff and other business associates by giving them a bottle of wine, chocolates or a personalized gift.
In order to determine whether your gift is tax deductible, a distinction is made between promotional items, premiums and business gifts. We explain the difference here.
Promotional items
Promotional articles aim to increase brand awareness of a company. They are intended for wide distribution and have little value to recipients. Also, products used as promotional items carry a company's name, trademark or logo permanently and prominently. Examples include pens, calendars, lighters and gadgets.
Summarized:
- Printed with company logo
- Low value for the receiver
- Distributed in large numbers
- Not specific to certain customers
Premiums
Premiums are intended to promote sales. An example is a gift the customer receives when purchasing a certain item or a certain amount. Items used in this way do not need to have a company name or logo.
Summarized:
- Receiving the premium depends on purchase amount
- Receiving the premium depends on number of products purchased
- Premium is stated on the invoice together with the purchased item
Please note premiums may not be given away for free without the customer making a purchase.
Business gifts
Business gifts are all gifts for a limited category of customers or other business associates which do not bear the name or logo of a company. Examples include drinks, flowers, chocolates, luxury items (such as valuable pens) and timepieces. Consumables such as wine and chocolate are always business gifts, even if the company is printed on the label or on the packaging.
Summarized:
- Not printed with company logo
- For limited group relationships
- Consumables (e.g. wine, chocolate)
