Client Gifts: Taxation Rules for Professionals and 2025 Regulatory Updates
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With the holiday season approaching, many professionals become more attentive to client gifts, staff gifts, corporate dinners and related expenses. Beyond their relational and reputational purpose, these costs carry significant tax implications, as similar transactions may be treated differently under Italian tax law.
Moreover, from 18 June 2025 new rules apply, affecting deductibility conditions and mandatory traceability of payments.
This guide provides a clear, updated overview of the tax regime applicable to self-employed professionals and professional practices, offering practical guidance for the correct management of gifts, dinners, events and related costs.
1. Gifts to Clients
Client gifts—goods purchased by the professional and transferred free of charge—fall under representation expenses governed by Art. 54-septies of the Italian Income Tax Code (TUIR).
For professionals, these expenses are deductible up to 1% of taxable fees earned during the tax year.
1.1 Gifts Below €50
Client gifts with a unit value below €50 fall within the 1% deductibility limit. Their VAT is recoverable upon purchase. The subsequent free transfer is non-taxable for VAT purposes (out of scope).
For combined packages (e.g. Christmas baskets), the €50 value must refer to the total gift, not the individual items within it, as clarified by the Italian Revenue Agency.
1.2 Gifts Over €50
Gifts with a unit value exceeding €50 qualify as representation expenses deductible within the 1% ceiling, but VAT is non-deductible.
The free transfer remains non-taxable for VAT purposes.
1.3 The “Relevance to Business” Requirement (Inerenza)
To be deductible, a gift must be demonstrably connected to the professional activity.
Supreme Court ruling No. 26553/2025 confirmed that it is not enough to prove that the item could fall under representation expenses: the professional must show it was used for promotional and non-personal purposes, directly linked to the business.
1.4 Cash Basis Principle
For self-employed professionals, representation expenses (including gifts) are deductible in the year they are paid, regardless of economic accrual.
Example:
Purchase and payment in December 2025 for wine bottles intended for a January 2026 anniversary event → deductible in 2025.
2. 2025 Update: Mandatory Traceable Payments
From 18 June 2025, deductibility of gifts is conditional upon the use of traceable payment instruments.
2.1 Allowed Instruments
- bank/postal transfer
- credit, debit and prepaid cards
- cheques
- certified digital payments (PayPal, Satispay, Apple Pay, Google Pay)
- foreign digital payments if traceable
2.2 Non-Allowed Instruments
- cash
- unregulated trade credit systems
- software or systems simulating traceability
2.3 Applicable Also to Foreign Expenses
Traceable payment requirements apply even when the gift is purchased abroad.
2.4 Proof of Traceability
Given that inspections often occur years later, documentation should be carefully retained.
Accepted evidence includes:
- invoice showing payment method
- POS receipts
- bank statements
- digital payment confirmations
3. Gifts to Employees and Collaborators – Deductibility and Fringe Benefits
Unlike client gifts, gifts to employees do not qualify as representation expenses.
Under prevailing doctrine, they are considered employment-related costs and therefore fully deductible for the professional.
3.1 Tax Treatment for Employees
Gifts are normally taxable as employment income but may fall under fringe benefit exemptions (2025 thresholds):
- €1,000 for employees without dependent children
- €2,000 for employees with dependent children
If the threshold is exceeded, the entire value becomes taxable.
3.2 Eligible Fringe Benefits
- gift vouchers
- reimbursement of household utility bills
- primary residence rent reimbursements
- primary residence mortgage interest reimbursements
4. Dinners, Christmas Events and Hospitality: Are They Deductible?
Meals, Christmas dinners and internal staff events usually do not qualify as representation expenses.
They may be deducted as personnel-related expenses, inherently connected to professional activity.
4.1 Why They Are Considered Relevant (Inerenti)
Circular 34/2009 recognises business-related hospitality as it:
- strengthens team cohesion
- improves workplace environment
- is customary in professional studios
4.2 Deductibility Limits
Food and beverage expenses are deductible:
- at 75%, and
- within 2% of professional fees earned.
4.3 Events Involving Clients
Meals or events involving clients or prospective clients are considered representation expenses and therefore deductible within the 1% limit of annual fees.
5. Special Regimes: “Minimi” and Flat-Rate Regime (Forfettario)
5.1 “Minimi” Regime (Residual)
For professionals under the former minimi regime:
- gift, meal and hospitality expenses are fully deductible if relevant;
- 1% deductibility cap does not apply;
- €50 per-gift threshold remains for practical interpretation.
5.2 Flat-Rate (Forfettario)
For flat-rate taxpayers:
- gift expenses are not analytically deductible;
- income is determined via coefficiente di redditività;
- gift deductibility rules are irrelevant.
6. Gifts and IRAP for Professional Firms
Since 2022, individual professionals are no longer subject to IRAP.
Remaining IRAP taxpayers include:
- professional associations
- associated professional firms
6.1 Tax Treatment
- Client gifts → follow IRPEF deductibility rules (1%)
- Employee gifts → generally non-deductible for IRAP, unless specific rules allow deduction
Conclusion
The regulatory framework for professional gifts evolved in 2025, particularly regarding traceable payment obligations and the correct qualification of expenses.
Proper planning allows professionals to:
✔ avoid non-deductible costs
✔ optimise employee fringe-benefit strategies
✔ correctly handle customer events and hospitality
✔ remain compliant with tax limits and documentation obligations
For tailored evaluation or to implement an internal gift & representation spending policy, contact Studio Genise.