Corporate Gifting in Ireland: A Practical Guide for HR & Finance Teams

What corporate gifting covers, and where the line sits

Corporate gifting is a loose term. In most Irish companies it ends up covering staff Christmas rewards, spot bonuses for a project that went well, long service awards, thank-you gifts to clients, referral gifts, and whatever the sales team hands out at a trade stand. Those all come out of a budget somebody in finance has to sign off.

For tax purposes only one distinction matters: is the recipient an employee, or is the recipient somebody outside the company?

Employees fall under the Small Benefit Exemption. An employer can give up to five non-cash benefits per employee in a tax year, and the combined value of those benefits cannot exceed €1,500. Give a single benefit worth more than €1,500 and the whole benefit becomes taxable, not just the excess. Cash and anything convertible to cash is excluded, which rules out bank transfers, cheques and prepaid cards that can be used at an ATM. The benefit cannot come out of salary sacrifice, and the cut-off is 31 December.

Everyone else falls under section 840 of the Taxes Consolidation Act 1997, which disallows business entertainment for income tax and corporation tax alike, and applies the same treatment to gifts. Sole traders and partnerships are caught as well as companies. A hamper to a client is entertainment as far as Revenue is concerned. It comes out of profit that has already been taxed. Entertainment provided for genuine members of staff, a Christmas party for example, is carved out of the section, which is why the two halves of a gifting budget part company here.

Plenty of companies run both out of one line called "gifting". That is where the trouble starts, because one half of the line has a tax break attached to it and the other half has a permanent add-back.

Why the split matters more than the spend

Take a €1,500 staff reward. Delivered as a qualifying non-cash benefit, the employee keeps all €1,500. No PAYE, no USC, no PRSI, and no employer PRSI on top. Deliver the same €1,500 as a cash bonus and most of it goes to the Revenue before it reaches anyone, so you either pay a great deal more to land the same value or the employee gets a fraction of what you intended.

Getting the vehicle wrong has the same effect. A prepaid card that can be emptied at a cash machine is cash-convertible, so it fails the test, and the reward becomes taxable pay. This is the most common way a well-meant gift turns into a payroll correction.

There is also a reporting duty that catches finance teams out. Since 1 January 2024, benefits given under the Small Benefit Exemption must be reported to Revenue under Enhanced Reporting Requirements, on or before the date the benefit is provided. It is not an annual return you tidy up in January. The benefit details Revenue asks for are short, the value and the date it was provided, but every submission also has to identify the employee: PPS number, Employment ID, first name, family name, date of birth and address. Whoever runs the gifting programme needs to be able to produce all of that at the point of sending, which is a question worth asking any gifting supplier before you sign with them.

Client gifts have no equivalent relief, so the honest way to budget them is at gross cost. There is one more thing to check: VAT. Revenue treats a business gift of goods costing €20 or less excluding VAT as carrying no VAT liability, and a gift above that threshold as liable on the full amount rather than the excess. A run of small gifts to the same person can still be caught. Vouchers work differently again, under the single-purpose and multi-purpose voucher rules that have applied since 1 January 2019. A multi-brand gift card is a multi-purpose voucher, so no VAT arises when it is issued or passed on, and the retailer accounts for the VAT when the recipient redeems it. A single-retailer voucher can instead be a single-purpose voucher, where the VAT falls due at issue. None of that is a planning tool, and it is worth putting in front of your accountant before a large client campaign.

Running a gifting programme without creating work

Decide the occasions before you decide the budget

Most gifting budgets are written the other way around, and the money then gets spent in December because nothing earlier was planned. Five benefits a year per employee is the ceiling, not a target, but it does allow for a pattern: a milestone, a strong quarter, a work anniversary, a Christmas reward. Spreading it means the gesture lands when the reason for it is still fresh, and it stops December turning into a scramble against a hard 31 December cut-off.

What to actually check in a gifting platform

The pitch decks all look the same. These are the things that show up later:

• Fees: purchase fees, handling fees and dormancy fees all reduce what the recipient gets. Handling charges of €2.50 and monthly inactivity fees in the €1.50 to €3 range are common on multi-store cards. If the card loses value while it sits in a drawer, you paid for something the employee never received.
• Cash convertibility: this is a compliance question, not a preference. If the card can be used at an ATM or refunded to cash, it will not qualify under the exemption.
• Validity: a voucher with an expiry date must run for at least five years under the Consumer Protection (Gift Vouchers) Act 2019, and the recipient cannot be forced to spend it in a single transaction.
• Delivery: email, SMS and mobile wallet delivery remove the printing and the chasing, and they work the same for an office-based team and a remote one.
• Choice: a single-retailer card is a guess on behalf of somebody else. A multi-brand card moves the choice to the person receiving it.
• Bulk and controls: can you send in bulk, split spend across purchase orders and departments, restrict who can issue, and pull order and invoice history without emailing an account manager?
• Reporting: you need a file that supports the Enhanced Reporting Requirements submission, not a PDF receipt.
• Support and reissue: gift cards get sent to the wrong address and to people who have left. Ask what a resend costs.

For reference, an OptionsCard carries no fees at any point, holds its value for five years, and lets the recipient swap the value for gift cards from over 70 Irish and international brands covering over 2,800 retail and online stores, or for a Hollr Reward Mastercard if they would rather spend anywhere. Business accounts can send in bulk, manage multiple purchase orders and budgets, control access by department, and download tax reporting files monthly or annually. Orders up to €25,000 can be placed online against an invoice.

A checklist before approving the spend

• Is the recipient an employee or a third party? Note it on the requisition.
• If employee: how many benefits has this person already had this year, and what is the running total against €1,500?
• Is the benefit non-cash and non-convertible?
• Is it being reported under Enhanced Reporting Requirements on or before the date it is sent?
• If a third party: has it been budgeted at gross cost, with no deduction assumed?
• Does the recipient organisation have a gifts policy that caps or bans what you are about to send?

Where corporate gifting goes wrong

The expensive mistakes are boring ones.

Leaving everything to December is the first. The exemption is a per-year allowance with a hard stop, so a company that has used none of it by late November either rushes a decision or loses the year. Worse, a business that has already given four small benefits and then wants to give a fifth larger one finds the €1,500 ceiling arrives sooner than expected.

The second is treating the gift card market as interchangeable. Two cards with the same face value can deliver very different amounts to the recipient once handling and dormancy fees are applied, and one of them may not qualify for the exemption at all.

The third is silence on the client side. Many Irish employers, most public bodies and most regulated firms have written policies on what staff may accept. Sending a €250 card to somebody who has to declare or decline it creates an awkward conversation rather than goodwill. A quick check of the recipient organisation's policy costs nothing.

The last one is documentation. Enhanced Reporting Requirements changed the assumption that employee gifts are informal, and the record has to exist at the point of giving rather than being reconstructed later.

One caveat on all of the above: this is a general guide for HR and finance teams, not tax advice. The Small Benefit Exemption rules are set out on revenue.ie, and anything unusual, particularly around client gifts, VAT and directors, should go to your accountant before the money is committed.

Want to run staff rewards and client gifting without the December scramble? Sign up at app.optionscard.ie/register and you can send single or bulk rewards, manage budgets by department, and pull the reporting your payroll team needs. If you would rather talk it through first, email us at sales@optionscard.ie.