Business gifts in Hungary
They say it is better to give than to receive. It is certainly nice to present your business partners with something nice, but what written and unwritten rules pertain to business gifts in Hungary? Let’s find out the basics.
What are business gifts in Hungary
Business gifts are presents to your business partners in relation to your business activity. Giving business gifts is not usually expected, but it is a nice gesture toward your partners, especially on memorable or festive occasions, such as Christmas or the anniversary of your partnership.
How to choose a business gift
Just like when choosing a gift for someone you know outside your business, you should consider who you are presenting your gift to. Relevant aspects may include the corporate culture at your partner’s company, and your partner’s age, gender, position, or even religion. You should avoid gifts the receiver might find embarrassing or offensive. For example, while a bottle of fine liquor is usually a safe bet, you should choose something else if you know the receiver does not drink alcohol.
Another important aspect is the value of the business gift. While there is no official upper limit to it, the business gift cannot be too expensive, meaning something the receiver would not be able to afford. Apart from how embarrassing it is to receive such a gift, it can arouse suspicions of bribery, which is best to avoid.
What can or cannot be a business gifts
Business gifts in Hungary are defined as products or services provided for free or with a discount, or vouchers redeemable specifically for a given product or service. Money or vouchers that are accepted widely cannot be given as business gifts.
You are not allowed to present as business gifts any of the following:
- Money or vouchers widely accepted for a range of products or services;
- Bills or securities, or any rights related to them;
- Pearls, precious stones, or semi-precious stones;
- Precious metals;
- Jewelry or coins.
Taxing business gifts in Hungary
Similar to items used for the representation of the company, you must pay taxes after business gifts you buy your partners.
- Personal income tax: 15%
- Social contribution tax: 15.5% (waived until 31 December 2021)
The tax base is 118% of the value of the item you want to present as a business gift.
Consult your heart – and your accountant
Business gifts in Hungary are great for expressing your appreciation of the business relationship you have with your partners. They are not really expected, so they do not have to be anything big if you want to make this nice gesture. If that is the case, make sure to also consult your accountant, who will be able to calculate how much the business gift will cost you after taxes.
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