Tax implications of paying a retro bonus as an additional batch of goods/services
Posted: Sun Dec 22, 2024 6:56 am
VAT. If the bonus is an additional product (work, service), then VAT is not charged on the retro bonus if the following conditions are met:
the price of the main product is indicated taking into account the cost of additionally provided goods (works, services);
When calculating VAT from the main transaction, the cost of additional goods (works, services) is taken into account.
To confirm, it is necessary to submit relevant documents, such as calculations of the cost of goods (works, services).
In their absence, the transfer of additional goods will be considered gratuitous (clause 12 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated 30.05.2014 N 33). For such an operation, the seller is subject to VAT.
However, its acceptance for deduction by the vietnam telegram buyer is not allowed. Since the buyer received the goods free of charge, VAT is not charged. The invoice issued during this transfer is not entered into the purchase book by the buyer (subparagraph "a" of paragraph 19 of Section II of the Rules for maintaining the purchase book, Letter of the Ministry of Finance of Russia dated 13.12.2016 N 03-03-05/74496).
Income tax. A bonus paid by increasing the volume of goods delivered without changing the cost of previously purchased goods is reflected in non-operating income as property received free of charge (clause 8, part 2, article 250 of the Tax Code of the Russian Federation). There are clarifications on this issue from the Ministry of Finance of the Russian Federation (Letters dated 28.12.2012 N 03-01-18/10-200 (clause 3), dated 19.02.2015 N 03-03-06/1/8096).
In the event that a product receives a retro bonus, it is assessed at its market value (Letter of the Ministry of Finance of Russia dated 19.02.2015 N 03-03-06/1/8096). Income is received on the date of signing the acceptance certificate for the goods (invoice) (subparagraph 1 of paragraph 4 of Article 271, paragraph 2 of Article 273 of the Tax Code of the Russian Federation). When selling a bonus product, it is allowed to reduce the income from the sale by the amount of income reflected when it is received free of charge (subparagraph 2 of paragraph 1 of Article 268, paragraph 2 of Article 254 of the Tax Code of the Russian Federation).
Tax implications of paying a retro bonus in the form of debt write-off
According to paragraph 1 of Article 421 of the Civil Code of the Russian Federation, individuals and organizations are not limited in any way when concluding an agreement and can independently determine its terms if there are no relevant laws or other legally binding regulations on this matter (paragraph 4 of Article 421 of the Civil Code of the Russian Federation).
In the event that the buyer is rewarded with a discount while maintaining the cost of the goods, the seller has the opportunity to pay the bonus in cash or by reducing the buyer's debt for previously delivered goods (or consider the provided bonus as an advance payment for future deliveries of goods), that is, to offset it on the basis of Article 410 of the Civil Code of the Russian Federation.
Tax implications of paying a retro bonus in the form of debt write-off
Source: shutterstock.com
VAT. If, when assigning a bonus to the buyer for compliance with the terms of the supply agreement, the cost of the shipped goods is not reduced, then a reduction in the VAT tax base by the seller by the amount of the bonuses received, as well as a reduction in the amount of VAT tax deductions by the buyer, is not allowed. In this case, the calculation of VAT when providing bonuses is made regardless of how exactly they were provided.
Income tax. The tax base for income tax is formed taking into account taxable income from the sale of goods (works, services) and property rights, as well as non-operating income (clause 1 of Article 274, clause 1 of Article 248 of the Tax Code of the Russian Federation).
After purchasing the goods, the company must include the amount of the premium due to it under the supply contract in the calculation of taxable profit as non-operating expenses. This is also indicated in the letters of the Ministry of Finance of the Russian Federation dated 19.12.2012 No. 03-03-06/1/668, dated 27.09.2012 No. 03-03-06/1/506, dated 07.05.2010 No. 03-03-06/1/316.
When determining the tax base using the accrual method, income is considered to be received in the reporting (tax) period in which it arose, and not at the time of the direct transfer of funds or property to the disposal of the enterprise (clause 1 of Article 271 of the Tax Code of the Russian Federation).
As a rule, the supplier informs the customer about the accrual of bonuses based on the results of purchases by means of a special notice (credit note).
Download a useful document on the topic:
Checklist: How to Achieve Your Goals in Negotiations with Clients
Frequently asked questions about the rebate bonus
Thus, the retro bonus or, more precisely, the “rebate” contributes to a more intensive capture of the market by all its participants.
How to take into account the supplier's retro bonus?
The supplier has the right to indicate a lower amount of income in the reporting period when the buyer was remunerated. Since the reporting for the previous period already includes information on the income received, the clarification will lead to an overpayment of income tax. This can be corrected on the basis of Article 54 of the Tax Code, which allows the possibility of transferring a retro bonus from the income of the previous reporting period to the expenses of the current year. In this case, the accounting and tax reporting will correspond to each other.
If it is unclear which entry is appropriate for the retro bonus, you should select the debit of account 91 “Other income and expenses” and the credit of account 62 “Settlements with customers and suppliers”.
How to correct an error in tax accounting of a retro bonus?
In tax accounting, an error is corrected in the period in which it was made. One could argue that, according to general rules, an error is allowed to be corrected in the current period if it resulted in an overpayment of tax due to a reduction in the tax base. However, this scheme may not be suitable, so you need to act thoughtfully.
Is it possible to pay with bonuses? Does this violate the law?
Rospotrebnadzor does not impose any restrictions on the provision of bonuses and discounts, therefore, the supply of goods at a discount when paid for by bank cards does not contradict the requirements for the protection of consumer rights (Letter of Rospotrebnadzor dated 22.09.2016 N 01/12735-16-31).
However, providing such a discount often complicates the work of the accounting department, since during the accounting it is necessary to carry out constant monitoring and pay attention to all the details.
the price of the main product is indicated taking into account the cost of additionally provided goods (works, services);
When calculating VAT from the main transaction, the cost of additional goods (works, services) is taken into account.
To confirm, it is necessary to submit relevant documents, such as calculations of the cost of goods (works, services).
In their absence, the transfer of additional goods will be considered gratuitous (clause 12 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated 30.05.2014 N 33). For such an operation, the seller is subject to VAT.
However, its acceptance for deduction by the vietnam telegram buyer is not allowed. Since the buyer received the goods free of charge, VAT is not charged. The invoice issued during this transfer is not entered into the purchase book by the buyer (subparagraph "a" of paragraph 19 of Section II of the Rules for maintaining the purchase book, Letter of the Ministry of Finance of Russia dated 13.12.2016 N 03-03-05/74496).
Income tax. A bonus paid by increasing the volume of goods delivered without changing the cost of previously purchased goods is reflected in non-operating income as property received free of charge (clause 8, part 2, article 250 of the Tax Code of the Russian Federation). There are clarifications on this issue from the Ministry of Finance of the Russian Federation (Letters dated 28.12.2012 N 03-01-18/10-200 (clause 3), dated 19.02.2015 N 03-03-06/1/8096).
In the event that a product receives a retro bonus, it is assessed at its market value (Letter of the Ministry of Finance of Russia dated 19.02.2015 N 03-03-06/1/8096). Income is received on the date of signing the acceptance certificate for the goods (invoice) (subparagraph 1 of paragraph 4 of Article 271, paragraph 2 of Article 273 of the Tax Code of the Russian Federation). When selling a bonus product, it is allowed to reduce the income from the sale by the amount of income reflected when it is received free of charge (subparagraph 2 of paragraph 1 of Article 268, paragraph 2 of Article 254 of the Tax Code of the Russian Federation).
Tax implications of paying a retro bonus in the form of debt write-off
According to paragraph 1 of Article 421 of the Civil Code of the Russian Federation, individuals and organizations are not limited in any way when concluding an agreement and can independently determine its terms if there are no relevant laws or other legally binding regulations on this matter (paragraph 4 of Article 421 of the Civil Code of the Russian Federation).
In the event that the buyer is rewarded with a discount while maintaining the cost of the goods, the seller has the opportunity to pay the bonus in cash or by reducing the buyer's debt for previously delivered goods (or consider the provided bonus as an advance payment for future deliveries of goods), that is, to offset it on the basis of Article 410 of the Civil Code of the Russian Federation.
Tax implications of paying a retro bonus in the form of debt write-off
Source: shutterstock.com
VAT. If, when assigning a bonus to the buyer for compliance with the terms of the supply agreement, the cost of the shipped goods is not reduced, then a reduction in the VAT tax base by the seller by the amount of the bonuses received, as well as a reduction in the amount of VAT tax deductions by the buyer, is not allowed. In this case, the calculation of VAT when providing bonuses is made regardless of how exactly they were provided.
Income tax. The tax base for income tax is formed taking into account taxable income from the sale of goods (works, services) and property rights, as well as non-operating income (clause 1 of Article 274, clause 1 of Article 248 of the Tax Code of the Russian Federation).
After purchasing the goods, the company must include the amount of the premium due to it under the supply contract in the calculation of taxable profit as non-operating expenses. This is also indicated in the letters of the Ministry of Finance of the Russian Federation dated 19.12.2012 No. 03-03-06/1/668, dated 27.09.2012 No. 03-03-06/1/506, dated 07.05.2010 No. 03-03-06/1/316.
When determining the tax base using the accrual method, income is considered to be received in the reporting (tax) period in which it arose, and not at the time of the direct transfer of funds or property to the disposal of the enterprise (clause 1 of Article 271 of the Tax Code of the Russian Federation).
As a rule, the supplier informs the customer about the accrual of bonuses based on the results of purchases by means of a special notice (credit note).
Download a useful document on the topic:
Checklist: How to Achieve Your Goals in Negotiations with Clients
Frequently asked questions about the rebate bonus
Thus, the retro bonus or, more precisely, the “rebate” contributes to a more intensive capture of the market by all its participants.
How to take into account the supplier's retro bonus?
The supplier has the right to indicate a lower amount of income in the reporting period when the buyer was remunerated. Since the reporting for the previous period already includes information on the income received, the clarification will lead to an overpayment of income tax. This can be corrected on the basis of Article 54 of the Tax Code, which allows the possibility of transferring a retro bonus from the income of the previous reporting period to the expenses of the current year. In this case, the accounting and tax reporting will correspond to each other.
If it is unclear which entry is appropriate for the retro bonus, you should select the debit of account 91 “Other income and expenses” and the credit of account 62 “Settlements with customers and suppliers”.
How to correct an error in tax accounting of a retro bonus?
In tax accounting, an error is corrected in the period in which it was made. One could argue that, according to general rules, an error is allowed to be corrected in the current period if it resulted in an overpayment of tax due to a reduction in the tax base. However, this scheme may not be suitable, so you need to act thoughtfully.
Is it possible to pay with bonuses? Does this violate the law?
Rospotrebnadzor does not impose any restrictions on the provision of bonuses and discounts, therefore, the supply of goods at a discount when paid for by bank cards does not contradict the requirements for the protection of consumer rights (Letter of Rospotrebnadzor dated 22.09.2016 N 01/12735-16-31).
However, providing such a discount often complicates the work of the accounting department, since during the accounting it is necessary to carry out constant monitoring and pay attention to all the details.