The concept of celebrating a new year was originally instituted in Mesopotamia (Iraq) in 2000B.C. around the time of vernal equinox in mid-March. The early Roman calendar designated March 1st as the commencement of the New Year.
The first time the New Year was celebrated on 1st of January was in Rome in the year 153 B.C. It should be noted that the month of January did not exist until about 700 B.C. when the second king of Rome (Numa Pontilius) added the month to the calendar.
Since 153 B.C. January 1, the New Year was moved from March to January because it marked the commencement of the civil year and the month that the two newly elected Roman consuls began their one year tenure. Julius Caesar, in 46 B.C. reformed the calendar and extended the period of a year from 355 days to 445 days that consisted of 15 months. These changes lead to creation of the Julian calendar and the beginning of the new rationalized calendar, as we now know it.
The month of January is thought, by many, to have been named after the god of transitions and beginnings, Janus, during the reign of the second King of Rome who lived from 753-673 B.C.
In 567 A.D. the Council of Tours abolished January 1 as the beginning of the year. At various times and in various places throughout medieval Christian Europe, the New Year was celebrated on December 25, a day known for the birth of Jesus.
Among the 7th century pagans of Flanders and the Netherlands, it was the custom to exchange gifts on the first day of the New Year. This custom was criticized by Saint Eligius (died 659 or 660). On the date that European Christians celebrated the New Year, they exchanged Christmas presents because New Years' Day fell within the twelve days of the Christmas season in the Western Christian liturgical calendar; the custom of exchanging Christmas gifts in a Christian context is traced back to the Biblical Magi who gave gifts to the Child Jesus.