The DED precludes the recovery of VAT (also referred to as input VAT) on promotional gifts and staff benefits if they were provided free of charge or below cost by the business. It is irrelevant whether a business had a commercial reason for providing the gifts and staff benefits, for example, client management, staff commitment, etc. The rationale for not allowing input VAT to be recovered is based on the fact that these costs, while business-related, are consumption-oriented, and VAT is a tax specifically designed to tax consumption. A threshold of EUR 227 per recipient applies. It is not necessary to make a DED adjustment if the total purchase and development costs (the cost price) of the benefits are less than EUR 227 (excluding VAT) per annum per recipient. This is a final threshold: if the threshold is exceeded, the input VAT on provisions within the threshold amount are non-recoverable.