Deduction for expenses related to gifts

This applies to you if you run a business and have expenses related to gifts.

• consider whether the business is entitled to a deduction for the expenses
• enter the expenses into the accounts
• keep documents showing the expenses you’re claiming a deduction for

The business can claim a deduction for expenses related to gifts. The gift must be a benefit in kind – in other words, it must provide an economic advantage, but it must not be a monetary gift.

Gifts to employees

Examples of gifts that will make the business entitled to a deduction:

• gift cards that cannot be exchanged for cash
• free telephone, broadband or newspaper subscription
• membership at a fitness centre
• an economic advantage from third parties that is received during the employment
• anniversary and other employment-related gifts, amounting to no more than NOK 4,000
• gifts with a value of no more than NOK 8,000 for employees who have been employed for at least 20 years, thereafter every tenth year
• gifts with a value of no more than NOK 5,000, for example Christmas gifts or gift cards
• personnel discounts amounting to no more than NOK 10,000
• personnel discounts amounting to no more than NOK 15,000, if there have been no other gifts given

Example:

Someone who’s been an employee for 20 years receives a gift card with a value of NOK 10,000. NOK 2,000 will be taxed as salary income, whereas NOK 8,000 will be a tax-free gift.

The employer gets a deduction for the entire amount. NOK 2,000 is a salary expense, and NOK 8,000 is a gift expense.

Example:

An employee receives a Christmas present with a value of NOK 8,000. NOK 3,000 will be taxed as salary income, whereas NOK 5,000 will be a tax-free gift.

The employer gets a deduction for the entire amount. NOK 3,000 is a salary expense, and NOK 5,000 is a gift expense.

Gifts for work contributions by people who are not employed by the business

The business can claim a deduction for expenses related to thank-you gifts for an individual work contribution where remuneration has not been agreed. The gift must be a benefit in kind, and if the value does not exceed NOK 500 it’ll not be taxable for the recipient.

Gifts to others

Generally, the business can only claim deductions for gifts to people who are connected to the business. You must consider whether the business’ expenses for a gift makes you entitled to a deduction.

In some cases, gifts may be considered advertising, welfare measures, representation, or dividend on shares.

Donations to voluntary organisations

The business may be entitled to deductions for monetary donations to certain voluntary organisations.

See requirements for deductions for donations to voluntary organisations