Advertising, sponsorship and gifts look similar — a company hands out money or goods and hopes it helps the business. Tax law treats them very differently, and the rules diverge between Slovakia and Czechia. A promotional item is deductible up to 17 EUR in Slovakia but up to 500 CZK in Czechia; a plain gift is never deductible in Slovakia, yet in Czechia it can be deducted from the tax base. Knowing which category applies decides how much tax you ultimately pay.
Why do tax authorities treat sponsorship, gifts and promotional items differently?
All three turn on one question: does the company receive something in return? If it pays for advertising and gets visibility — a logo, a banner, a mention — that is an ordinary deductible expense in both countries. If it gives money with no consideration, that is a gift, treated far less favourably.
Between these poles sit promotional items — small branded objects handed out to promote the business — and the special regime for sponsorship. The classification is not a formality: it decides whether you deduct the amount, reduce your tax base, or pay it out of after-tax profit. Slovak companies can read more in our overview of professional accounting in Slovakia.
When is a promotional item tax-deductible in Slovakia and Czechia?
In Slovakia, a promotional item is deductible under Section 21(1)(h) of the Income Tax Act if its value does not exceed 17 EUR per item. Branding with a logo is not legally required, though it helps prove the advertising purpose. Tobacco and spirits are excluded; wine qualifies up to 17 EUR per item, but for a non-producer only up to 5 % of the tax base.
In Czechia, the limit is 500 CZK per item, net of VAT, under Section 25(1)(t) of the Czech Income Tax Act, and the item must carry the provider’s name or trademark and must not be subject to excise duty. One key change: the exemption for still wine ended on 31 December 2023, so wine no longer qualifies as a promotional item in Czechia. In both countries, exceeding the threshold makes the entire value non-deductible, not just the excess.
Are donations a deductible expense?
In Slovakia, no. A donation — money, goods, or the residual value of donated assets — is not a deductible expense: Section 21 excludes it because it does not relate to taxable income, and the residual value of donated assets is named expressly in Section 21(2)(f). Slovak law offers no deduction from the tax base either. A Slovak company always donates out of taxed profit.
Czechia is more generous. A donation is not a deductible expense under Section 25, but a company can deduct it from the tax base under Section 20(8): the value of a single gift must be at least 2,000 CZK, and the maximum deduction is 30 % of the tax base. This raised limit applies for 2026 as well (for periods ending by 28 February 2027; the standard limit is otherwise 10 %). This is the sharpest difference between the two systems.
When is a sponsorship payment deductible?
The systems again differ in form. In Slovakia, the favourable route is a sport sponsorship contract under Act No. 440/2015 on Sport. The sponsor may deduct the amount only if it reports a positive tax base, only after payment, and only up to the amount the recipient actually spent; the contract must be published in the sport information system.
In Czechia, sponsorship is treated as advertising: because the sponsor receives consideration — promotion, logo visibility — it is a deductible expense under Section 24, with the payment taxable income for the recipient. In both countries the decisive factor is documented consideration; a written contract and proof that the promotion actually took place are essential, or the payment is reclassified as a non-deductible gift. Our note on Slovak tax advisory for companies explains how these decisions fit together.
How does VAT apply to gifts and promotional items?
VAT follows its own logic in each country, but the principle is similar. A low-value promotional item — up to 17 EUR in Slovakia, up to 500 CZK net in Czechia — can be given away without charging output VAT, while the company keeps the input VAT deduction on its purchase. Reasonable commercial samples are treated the same way.
For more expensive gifts, if the company deducted input VAT and later gives the goods away, it must account for output VAT on the free supply. Entertainment — meals and hospitality — carries no VAT deduction in either country.
What counts as entertainment, and why is it not deductible?
Entertainment covers spending that builds goodwill without direct advertising consideration — client lunches, hospitality at meetings, flowers, more expensive partner gifts. It is non-deductible in both Slovakia and Czechia, even when it genuinely helps the business. The only exception is the low-value promotional item described above.
Because of this, companies should separate promotional items from entertainment in the accounts from the outset. Mixing them risks paying tax at audit on amounts that would otherwise have passed as advertising.
How to keep records that survive a tax audit?
The key is provability. For promotional items, keep the purchase document and a short note of who received them and on what occasion. For sponsorship, a written contract, proof of payment and evidence of the consideration — a photo of the logo, a screenshot, a published confirmation — are indispensable. For Czech donations you intend to deduct, keep the donation contract or the recipient’s confirmation.
A company that separates these regimes in advance avoids the most common mistake: having “advertising” reclassified as entertainment during an audit. When the classification of a specific expense is unclear, ask before you book it — a correction after filing is more expensive than a question in advance.
Unsure whether a specific sponsorship payment or company gift will hold up as a deductible expense in Slovakia or Czechia? We will review your contracts and documents and set up records that survive an audit.
FAQ
What is the difference between a gift and a sponsorship payment?
A gift is a gratuitous transfer with no consideration; it is not a deductible expense for the giver, though in Czechia it can be deducted from the tax base. A sponsorship payment is made for advertising with consideration, so it is a deductible expense — in Slovakia via a sport sponsorship contract, in Czechia as advertising under Section 24. What matters is whether you receive something in return.
Up to what amount is a promotional item deductible?
In Slovakia, up to 17 EUR per item; in Czechia, up to 500 CZK per item net of VAT and only if branded and not subject to excise duty. Above the threshold, the whole value is non-deductible. Note that in Czechia the exemption for still wine ended in 2024, so wine no longer qualifies.
Can a company deduct donations from its tax base?
In Czechia, yes — a company may deduct donations for public-benefit purposes of at least 2,000 CZK each, up to 30 % of the tax base (this raised limit applies through periods ending 28 February 2027). In Slovakia there is no such deduction: a donation is always non-deductible and paid out of taxed profit.