Usually companies hold a year-end celebration for their employees where they sometimes hand out gifts. We are not always clear on how we should treat these types of expenses.

The first point that needs to be considered is the deductibility, where the Income Tax Law states that the authorized deductions must be strictly indispensable for the purposes of the taxpayer's activity.

However, the deductibility of these expenses for end-of-year celebrations could be justified if these benefits granted to employees are stated in the Labor or Collective Contracts as social welfare.

If you require an analysis of your expenses due to the festivities, please contact us.