Client and Employee Gifts in a GmbH 2026: €50 Limit and Correct Bookkeeping in Germany

Gifts are part of running a GmbH: wine baskets at Christmas, flowers for a birthday, small tokens for key clients. But not every gift is deductible, and not every gift can be passed on tax-free to the recipient. Germany’s Wachstumschancengesetz raised the deduction limit for gifts to business partners from €35 to €50 in 2024, and it still applies in 2026. Here is the full guide for GmbH and UG founders.

Key points at a glance

• Business partners: up to €50 net per recipient and fiscal year is deductible. It is a hard limit (Freigrenze), not an allowance, and has been €50 instead of €35 since 2024.
• Branded promotional items: up to €10 net per piece, fully deductible and outside the €50 limit.
• Employees: €60 gross per personal occasion plus €50 gross monthly benefit in kind, both tax-free and combinable.
• Shielding the recipient: flat tax of 30 % under § 37b EStG (plus solidarity surcharge and possibly church tax), capped at €10,000 per recipient and year.
• Cash gifts are always taxable. Only gifts in kind stay privileged.

Gifts to business partners: the €50 deduction limit

Your GmbH can deduct gifts to clients, suppliers or other business partners up to €50 per recipient and fiscal year as a business expense (§ 4(5) sentence 1 No. 1 of the Income Tax Act, EStG). Three rules apply:

• It is a hard limit (Freigrenze), not an allowance: spend €50.01 and you lose the deduction in full, not just the extra cent.
• If your GmbH can deduct input VAT, the limit is net; if not, it is gross.
• All gifts to the same recipient in a fiscal year are summed.

Example: you give a client a bottle of wine in May for €30 net and chocolates in December for €25 net, total €55. The €50 limit is breached, and both gifts become non-deductible. Had December been only €20 net, the total would have stayed at €50 and the deduction would have survived.

Incidentals such as wrapping or a greeting card do not count toward the €50, as long as they have no own usable value. An engraved bottle or a case with real value does count.

Promotional items: under €10 net

Branded promotional items below €10 net per piece, the classic giveaways such as pens, mugs or notebooks with your logo, do not count toward the €50 limit. They are fully deductible and posted to a separate account (SKR03: 4630, SKR04: 6610). The only requirement: they must clearly read as advertising (visible logo). You do not need a recipient list for promotional items, because they fall outside the flat-tax scheme.

Overview: all limits at a glance

So you do not mix up the three routes: recipient and value decide which limit applies and whether it is net or gross.

Flat taxation under § 37b EStG

A gift triggers tax for the recipient, client or employee alike. To shield your business partner from having to declare it, the GmbH can take on a flat 30 % tax under § 37b EStG. This is usually the cleaner route because:

• The recipient keeps the gift tax-free and often never even notices.
• You can deduct the flat tax itself as a business expense, to the extent the gift was deductible.
• The flat tax applies uniformly across all gifts in a fiscal year: either all of them or none.

Two ceilings matter: the flat tax is capped at €10,000 per recipient and fiscal year, and a single gift above €10,000 cannot be flat-taxed at all. Add 5.5 % solidarity surcharge and possibly church tax on top of the flat tax. You report it with your monthly payroll tax filing.

Worked example: a gift of €25 net plus 30 % flat tax (€7.50) plus 5.5 % solidarity surcharge (€0.41) makes about €32.91 in business expenses, fully deductible because the gift itself sits under the €50 limit.

Gifts to employees: small attentions and benefits in kind

For employee gifts, German tax law distinguishes two categories that can even be combined.

Small attentions for personal occasions: up to €60 gross

Birthday, wedding, the birth of a child, work anniversary: gifts in kind up to €60 gross per occasion are exempt from wage tax and social security for the employee (R 19.6(1) of the Wage Tax Guidelines, LStR). Cash gifts do not qualify, they are always taxable. And note: Christmas is not a personal occasion. A Christmas gift therefore does not run through the €60 attention rule, but through the monthly benefit in kind, the company event or the flat tax under § 37b.

Monthly benefits in kind: up to €50 gross

Independent of any occasion, you can pass each employee benefits in kind up to €50 gross per month tax- and social-security-free (§ 8(2) sentence 11 EStG), e.g. fuel vouchers, prepaid benefit cards or meal vouchers. This €50 per month and the €60 per occasion are two separate limits: an employee can receive the benefit in kind and an occasion gift in the same month. For a clean line between benefits in kind, read our guide to non-cash benefits in a GmbH.

Christmas party: €110 per company event

Company events such as the Christmas party carry their own allowance of €110 gross per employee and event, for up to two events per year. Unlike the hard limits, only the amount above €110 becomes taxable, not the whole cost. Food, drinks and the surrounding programme count in on a pro-rata basis.

Posting: which account, which input VAT?

In GmbH bookkeeping, gifts are split by recipient and value. The reason: the deductible and the non-deductible part must stay cleanly apart for corporate tax.

For non-deductible gifts (over €50 net) the input VAT recovery is also excluded (§ 15(1a) UStG). In Norman, the AI detects gift receipts automatically and proposes the correct account, including a flat-tax accrual, because both SKR03 and SKR04 chart-of-accounts logic is built in. If you want a closer look at the SKR03 and SKR04 accounts, you will find the comparison there.

Documentation: what you must keep on file

For the tax office to accept your gifts, you document for each one:

• Recipient name and address (mandatory for business partners).
• Occasion (e.g. “Ms. Müller birthday, key client XY”).
• Value with receipt (till receipt or invoice).
• Posting on a separate account as listed above.
• Recipient list for the flat tax, without it § 37b does not apply.

If you give regularly, a simple gift log helps, or a digital receipt workflow. For the broader question of what counts as a GmbH business expense, see our dedicated article. And for business meals instead of gifts in kind, separate rules apply, which we explain in GmbH entertainment expenses.

Frequently asked questions

Are gifts to clients deductible for the GmbH?

Yes, up to €50 net per recipient and fiscal year as a business expense. Above this hard limit the deduction is lost in full. Promotional items under €10 net per piece are fully deductible and do not count toward it.

Is the €50 limit net or gross?

Net, if your GmbH can recover input VAT. If it cannot (e.g. with exempt turnover), the gross amount applies.

Does the client have to declare the gift?

In principle yes, since it is business income. But if the GmbH takes on the flat 30 % tax under § 37b EStG, the gift stays tax-free for the recipient. The flat tax then applies uniformly to all gifts of the year.

Are Christmas gifts to employees tax-free?

Not through the €60 attention rule, because Christmas is not a personal occasion. A Christmas gift stays tax-free only through the monthly €50 benefit in kind, within the Christmas party (€110) or through the flat tax under § 37b.

What happens if I exceed the €50 limit by a few cents?

You lose the business-expense deduction for the entire gift, not just the excess amount. So keep an eye on the total of all gifts per recipient across the year.

Can I deduct the flat tax under § 37b myself?

Yes, but only to the extent the gift itself was deductible (that is, under €50 net). For a non-deductible gift over €50, the flat tax on it is not deductible either.

Conclusion

€50 for business partners, €60 per occasion for employees, €50 monthly as benefits in kind: three thresholds, three accounts, three posting logics. A single cent over the line and the entire gift becomes worthless from a tax perspective. With Norman you post gifts automatically to the right account, monitor the limits per recipient and keep the flat tax in view. So a friendly gesture does not turn into a costly surprise at the next tax audit.