The competition that exists in the market for almost any product forces sellers to look for different ways to promote their products. One of the most used and effective of them is to provide customers with various discounts, bonuses, premiums, the end result of which is to reduce the cost of products (or for customers to receive other benefits). In turn, the possibility of receiving discounts encourages purchasers of goods to purchase from this particular supplier.
However, when moving towards the goal, it is important for both parties - both the seller and the buyer - to correctly formalize the contractual relationship and subsequently correctly reflect the sale and receipt of such goods in their accounting. This article will discuss how to avoid mistakes when performing such operations.
Concept and types of discounts
The procedure for concluding a purchase and sale agreement and the definition of the main concepts used when signing it are regulated by Chapter 30 of the Civil Code of the Russian Federation. However, the code does not contain the concept of a discount (premium, bonus). There is also no clear definition of them in the Tax Code. Based on the established practice in civil circulation, the following definitions can be derived:
- discount is a reduction by the seller of the price of a product compared to the prices he usually applies;
- A premium, or bonus, is the free provision by the seller of an additional volume of goods or the payment to the buyer of a certain amount of money.
The choice of a particular of these methods of stimulating the buyer to purchase depends on the seller and is determined by his marketing policy. Discounts (bonuses) conditionally provided to customers can be divided into the following types:
- Discounts and bonuses, divided depending on the conditions for which they are provided:
- provided for completing a certain volume of purchases;
- provided for compliance with certain payment conditions (for example, a discount for full or partial prepayment, a discount for early payment);
- for the acquisition of new types of goods;
- for the purchase of seasonal goods during “off-season” times, etc.
- Discounts and bonuses depending on the time of their provision:
- provided at the time of shipment of the goods to the buyer;
- provided a certain time after shipment, usually based on an analysis of the buyer’s purchasing and payment discipline.
Since according to sub. 19.1 clause 1 art. 265 of the Tax Code of the Russian Federation, expenses in the form of a premium (discount) paid (provided) by the seller to the buyer as a result of fulfilling certain terms of the contract are classified as non-operating expenses of the seller, which reduce its taxable profit, such expenses must meet the general characteristics provided for in paragraph 1 of Art. 252 of the Tax Code. Namely, they should be:
- economically justified;
- documented.
The economic justification for such expenses will be their focus on generating income from the activity in connection with which such expenses were incurred. As a rule, confirmation of this focus will be a document on the seller’s marketing policy, which establishes:
Firstly, the main goals of providing discounts to customers (increasing sales volumes, if discounts increase depending on the growth of purchases, or reducing payment terms, if the largest discount is provided with a minimum deferred payment or prepayment);
secondly, conditions for their provision, for example, what volume of goods and for what period must be purchased to receive a discount in a certain amount, an indication of the possibility of providing discounts if the buyer violates contractual terms, the possibility of summing up discounts, etc.;
thirdly, the procedure for their provision - a specific type of incentive for buyers and the timing of their provision.
thirdly, the procedure for their provision - the specific type of incentive for buyers and the timing of their provision.
At the same time, such recording will also serve as documentary evidence of expenses incurred when providing discounts (bonuses), but only if the general conditions for providing incentives related to a given buyer are reflected in the agreement with him. That is, the contract must contain clear instructions on all of the above points, and also additionally define:
1. Moments (dates) at which the buyer is considered to have fulfilled the conditions for receiving discounts (bonuses).
So, if discounts are provided for the purchase of a certain volume of purchases in a certain period (for example, a quarter), such points may be:
- signing by the parties of the next specification;
- shipment of products from the seller’s warehouse according to the dates on the bill of lading or bill of lading;
- date of actual arrival of the products at the buyer's address.
In the absence of such instructions, questions may arise between the parties (as well as from the tax authorities). For example, products were removed from the seller’s warehouse on March 30 (1st quarter of the year), and arrived at the buyer’s warehouse on April 4 (2nd quarter). Does the buyer have the right to demand a discount for having fulfilled the condition of purchasing a certain volume? And does the seller have the right to provide him with such a discount and take it into account as part of his expenses? The answer to these questions should be contained in the terms of the contract.
If a discount is provided for compliance with payment terms, the contract must clearly indicate which date is the payment date. This can be either the date the funds are written off from the buyer’s current account, or the date they are credited to the seller’s account, since money is not always written off and credited on the same day.
2. On the basis of what documents will the buyer’s compliance with the conditions for using discounts (bonuses) be established?
It seems the simplest to use as confirmatory:
- to confirm the volume of purchases - specifications, or primary accounting documents, namely: a bill of lading (with a note from the buyer about receipt of the cargo specified in it), a bill of lading.
- to confirm payment discipline - statements from the selling bank or buying bank confirming the debiting of money from the account or its receipt.
Specific documents confirming the right to receive discounts will be determined by the parties depending on how they determined the moment the buyer fulfills his obligations under the contract.
In addition to the specified documents, the parties can also draw up a bilateral act (in any form) stating that for a certain period the buyer has fulfilled the terms of the contract, which is confirmed by the following documents, and list all the above documents.
3. When providing incentives for the purchase of agreed volumes of products, especially if such a volume is expressed in the purchase of products for a certain amount, it is also advisable to determine:
- whether this amount includes the amount of VAT charged to the buyer or not;
- Will there be an increase in this volume if the seller increases the price per unit of product (for example, when signing the contract, a unit of product cost 10 rubles and the buyer undertook to purchase 1,000 rubles worth of products during the quarter. But after signing the contract, the seller unilaterally, when the contract allows similar actions, increased the price of a unit of production to 20 rubles, and the buyer, in order to comply with the condition on the volume of purchases, only needs to purchase a smaller quantity of products).
In addition, if the seller, in addition to the discounts provided for in the contract, conducts various promotions that also provide benefits for buyers in order to stimulate them to purchase, it should be established whether the volume of goods purchased as part of such promotions is included in the total volume required to provide contractual discounts.
For example, the section on discounts (or an appendix to the contract) may look like this:
The Seller provides the Buyer with a discount on the purchased products in relation to the wholesale price applicable to the Seller according to its price list.
At the time of signing this agreement, the amount of the discount provided to the buyer is ____%.
The discount provided in accordance with clause 2 of this agreement can be unilaterally changed by the seller at the end of each calendar quarter, depending on the buyer’s compliance with the following conditions:
The date of fulfillment of the buyer's obligations to purchase products for the purpose of establishing the volume purchased in the reporting quarter is the date of shipment by the seller to the buyer of the products on the basis of the specification agreed by the parties or the seller's application, determined by the date the seller signed the invoice. The date of payment by the buyer for the goods is the date when funds are credited to the seller’s bank account.
The discounts provided for in clause 3 of this agreement are not cumulative. If, based on the results of the reporting quarter, the buyer is entitled to several types of discounts, the seller provides him with the largest possible one.
Within no later than 3 calendar days from the end of the reporting quarter, the parties draw up an act on the buyer’s fulfillment of the conditions for providing discounts, which records the volume of goods purchased by the buyer, indicating the documents provided for in clause 4 of this agreement and the discount determined by the seller according to the rules of clause 3 provided to the buyer for the next quarter.
If the buyer violates the terms of payment for goods purchased at a discount, the seller has the right to unilaterally refuse to provide the buyer with discounts in accordance with this agreement. Such a refusal is formalized by notification to the seller and is valid from the date the buyer receives the relevant notice.
Accounting for discounts and bonuses
Discounts at the time of shipment
The simplest and most transparent way is to take into account discounts that are provided to the buyer at the time of shipment of products to his address, i.e. at the time of registration of primary accounting documents for such shipment. In this case, the shipping documents indicate the price of the product, taking into account the discount provided to the buyer according to the contract, since this is the procedure for determining the price established by the contract signed between the parties. And according to paragraph 1 of Art. 424 of the Civil Code of the Russian Federation, the execution of the contract is paid at the price established by agreement of the parties. At the same time, according to paragraph 1 of Art. 248 of the Tax Code of the Russian Federation, income (for the purposes of calculating income tax) is determined on the basis of primary accounting documents and other documents confirming the income received by the taxpayer. For the purpose of determining revenue in accounting, the seller will also take into account exactly the amount presented to the buyer, since according to clause 6.5 of the Accounting Regulations “Income of the Organization” PBU 9-99 (approved by order of the Ministry of Finance of the Russian Federation dated May 6, 1999 No. 32n ) the amount of receipts and (or) receivables is determined taking into account all discounts provided to the organization.
Discounts after shipment
However, an enterprise can choose for itself such a system of providing discounts in which the buyer has the right to receive it only after he fulfills certain conditions of the contract, and such a discount is provided to him, relatively speaking, “after the fact.” Those. Initially, all primary accounting documents were drawn up and accounted for the full cost of the goods, and subsequently the seller makes a decision to reduce the price of the product. In this case, it is necessary to keep in mind that appropriate changes must be made to the already prepared primary accounting documents. The procedure for making such changes in relation to invoices is determined by the “Rules for maintaining logs of received and issued invoices, purchase books and sales books when calculating value added tax” (approved by Decree of the Government of the Russian Federation of December 2, 2000 No. 914) .
Providing bonuses
Providing bonuses
As for VAT, in the author’s opinion, it must be paid even if the sale is not free of charge. Certain doubts may arise when interpreting paragraph 1 of Art. 146 of the Tax Code of the Russian Federation, which determines the objects of value added tax taxation. According to para. 3 of this paragraph, the transfer of goods free of charge is recognized as a sale. Consequently, it will be very tempting for the seller to conclude that since the transfer of goods in the form of bonuses is not free of charge, then there is no sale as an object of VAT taxation. However, in the author’s opinion, such a conclusion contradicts the general rules of paragraph 1 of Art. 39 of the Tax Code of the Russian Federation, according to which sale is any paid transfer of ownership of a product. And if, using the above arguments, the seller proves that the provision of a bonus to the buyer was associated with the reciprocal fulfillment of his obligations to the seller, then there is compensation for the sale of the bonus product for VAT purposes.
Control of discounts
Since the provision of discounts entails a decrease in revenue for the seller compared to selling the goods at the price usually used by him (without discounts), such transactions may attract close attention from the tax authorities. According to the rules of paragraph 2 of Art. 40 when monitoring the completeness of tax calculations, tax authorities can check the correctness of the application of prices for transactions in which prices deviate by more than 20% upward or downward from the level of prices applied by the taxpayer for identical (similar) goods for a short period of time. If it is established that the taxpayer exceeds this 20% threshold in relation to market prices for identical goods, the tax authority has the right to make a reasoned decision on additional tax and penalties, calculated in such a way as if the results of such a transaction were assessed based on the application of market prices for such goods. But the taxpayer should remember that when applying this rule, tax authorities must:
- establish market prices for identical or similar goods. Those. even if the difference between the seller’s wholesale price and the discount provided to any buyer is more than 20%, but these prices are within the 20% threshold in relation to market prices, the rules of paragraph 3 of Art. 40 cannot be applied;
- take into account factors such as seasonal production of goods and their sale at the end of the season, expiration dates of goods, fluctuations in consumer demand, etc. Transaction terms such as the volume of goods supplied, deadlines for fulfilling obligations, payment terms, as well as other reasonable conditions that may affect prices should also be taken into account (letter of the Department of Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation dated July 24, 2008 No. 03 -02-07/1-312).
Discounts represent a reduction in the standard price of a product depending on certain positive or negative purchasing conditions for the seller. Discount functions are shown in Fig.
Rice. Discount functions
In world practice, there are about one and a half dozen types of discounts. The most common of them are shown in Fig.
Rice. Main types of discounts
Progressive discount provided to the buyer for the volume of purchase (in value or in kind), quantity or serial number of purchases. There are different mechanisms for generating discounts for the volume of purchase of goods (Fig.).
Rice. Mechanisms for generating progressive discounts
Seasonal discount is provided for the purchase of goods outside the season of its active sale.
Discount for expediting payment provided when paying for goods earlier than the deadline established by the contract.
Discount for trial batches of goods given by the manufacturer to the buyer in order to interest him in the new product.
Special discounts provided on special occasions (holidays, anniversaries, etc.).
Functional discounts are provided by manufacturers to the trade sector for performing certain work (display, pre-sale preparation, storage, etc.).
Goods exchange offset- a discount for returning an old product purchased from this company earlier, which goes toward the purchase of a new product.
Complex discounts are a combination of two or more types of discounts.
Hidden discounts given to the buyer in the form of providing free services, providing free samples, etc.
Extra charges represent an increase in the standard price of a product due to the fulfillment of additional buyer requirements for the product (service).
Markups can be set:
· for increased quality (in exchange trading);
· for the urgency of the service;
· for delivery of goods directly to the place of use, etc.
The table below shows the most common types of discounts from the set price, recommended for use in spa practice.
Topic 16. SALES POLICY OF THE COMPANY. SALES PROMOTION. FORMS OF SALES PROMOTION. CHANNELS OF DISTRIBUTION OF GOODS AND SERVICES.
Sales(distribution, product distribution, bringing the product to the consumer) - an element of the marketing mix that characterizes the activities of the commodity producer aimed at ensuring the physical availability of its products to target consumers. Sales includes the following activities:
Formation of a sales network (selection of distribution channels and resellers);
Warehousing of goods;
Transportation of goods;
Commercial transactions.
The main objectives of the company's sales policy are shown in Fig.
Rice. Objectives of the company's sales policy
When forming a sales policy, a company must answer the following basic questions:
Where and when is it more convenient for the consumer to purchase goods?
What level of service does the consumer expect?
How to interest intermediaries in cooperation?
What will be the distribution costs?
The most likely expectations of consumers regarding the sale of goods:
Finding a product on sale in the right place at the right time in the required quantity;
Timely delivery;
Safety of goods during the distribution process;
The willingness of sellers to quickly replace defective goods;
Suppliers' readiness to meet individual customer requests.
Sales promotion(sales) - incentive measures, as a rule, short term nature that promotes the sale of goods (services). Sales promotion is based on the appeal: “Buy our product immediately." In fact, sales promotion is a complex marketing microprogram created to solve tactical problems (Fig.).
Rice. Main tasks of sales promotion
There are two forms of sales promotion - price and non-price(rice.).
 |
Rice. Forms of sales promotion
Coupons- certificates issued to customers giving the right to receive a certain discount when purchasing a specific product. There are the following types of coupons:
Inserted into the product packaging;
Distributed by sales agents;
Sent by mail;
Printed in newspapers;
Distributed through magazines and their supplements.
The advantages and disadvantages of the main non-price methods of sales promotion are shown in the table.
Companies, as a rule, do not set just one price, but create an entire pricing system that reflects differences in demand and costs by geography and the requirements of specific segments
look at abstracts similar to "Types of discounts"
I. Introduction……………………………………………………………. With. 2
II. A system of discounts as a tool for stimulating sales…. With. 2
1. Discount for cash payment…….………………………… p. 3
2. Discount for the volume of purchased goods……………………… p. 3
3. General (simple) discount…………………………………… p. 3
4. Discount for turnover……………………………………………. With. 4
5. Functional discount…………………………………… p. 4
6. Progressive discount…………………………………… p. 4
7. Dealer discount…………………………………………… p. 4
8. Special discounts………………………………………….. p. 5
9. Export discounts……………………………………………. With. 5
10. Discount for off-season purchases…………………………….. p. 5
11. Discount for expediting payment ………………………………… p. 6
12. Discounts to encourage sales of new products…………… p. 7
13. Discounts for complex purchases of goods……………….. p. 8
14. Discounts for “loyal” or prestigious buyers…… p. 9
15. Discounts for quality…………………………………………… p. 10
16. Discounts for returning previously purchased goods……………… p. 10
17. Discounts on the sale of used equipment
in use…………………………………………………………… p. 10
18. Service discounts……………………………………………. With. 10
19. Club discounts……………………………………………. With. 11
20. Discounts taking into account intercultural communications……….. p. 11
21. Tests……………………………………………………….. p. 12
III. Conclusion……………………………………………………… p. 12
IV. References………………………………………………………….. p. 13
Introduction
Companies, as a rule, do not set just one price, but create an entire pricing system that reflects differences in demand and costs by geography, the requirements of specific market segments, the distribution of purchases over time, order volumes, delivery schedules, guarantees, service. The use of discounts and advertising support for products leads to differences in the profit margin of products.
An extremely useful and flexible tool for a company's marketing policy is a system of price discounts. Born out of the traditional custom for any bazaar of reducing the asking price for a buyer who takes more goods, now the practice of setting discounts has become extremely sophisticated, and the set of top discounts is very diverse.
To reward consumers for certain actions, such as early payment of bills, high-volume purchases, or off-season purchases, many companies are willing to change their original prices. Published prices are primarily for reference purposes and quite often deviate significantly from the prices actually paid by the buyer due to the widespread use of a system of special discounts. There are also Russian-language versions of the term – price deduction and discount.
The amount of discounts depends on the nature of the transaction, terms of delivery and payment, relationships with buyers and market conditions at the time of the transaction. Currently, about 20 different types of discounts are used in international trade.
Discount system as a sales promotion tool
By its commercial nature, a discount can be one of two types:
1) planned discount;
2) tactical discount.
Planned discounts are formed at the expense of the total amount of overhead costs and are usually so disguised that they are sometimes called that -
"disguised". It is precisely this kind of discount that includes the organization by the manufacturer of advertising of its products indicating a list of trading companies that sell these products. Thus, the manufacturing company actually saves its dealers money on advertising their trade names, which by economic nature is equivalent to providing them with an additional discount.
Other types of discounts can be classified as tactical. They are united by an economic source - profit, as well as a common task - creating additional incentives for the buyer to make a purchase.
The use of tactical discounts leads to a reduction in the actual purchase price of a product and, accordingly, to an increase in the buyer's premium. This premium represents the difference between the economic value of the product for the buyer and the price at which he was able to buy this product. Let's look at the main types of discounts.
Discount for cash payments – a reduction in price for buyers who promptly pay bills in cash. A buyer who pays within 10 days receives, for example, a two or three percent reduction from the payment amount. This discount can also be applied partially, for example, only for a percentage of the entire amount received within 30 days.
With a larger supply volume or more expensive equipment, this type of discount can greatly activate the local counterparty, who is interested in selling faster and receiving their considerable income.
Such discounts are widely used to improve the liquidity of the supplier/seller, the rhythm of its cash receipts and reduce costs in connection with the collection of receivables.
A discount for the volume of purchased goods is a commensurate reduction in price for buyers who purchase large quantities of a similar product. Typically, the discount is set as a percentage of the total cost or unit price of a specified volume of supply, for example, a 10% discount for orders over 1000 pieces. Discounts may be offered on a non-cumulative basis (per order placed) or on a cumulative basis (per number of items ordered over a given period).
Quantity discounts should be offered to all customers, but in this case the supplier/seller must ensure that the amount of discounts does not exceed its cost savings due to increased volumes of goods sold. These savings can be achieved by reducing the costs of selling (trade processing), warehousing, maintaining inventory and transporting goods. Discounts of this kind can also serve as an incentive for the consumer to make purchases from one seller.
A general (simple) discount is provided from the list price or reference price and is usually 20 - 30%, and in some cases up to 40%. Such discounts are widely practiced when concluding transactions on machinery and equipment, in particular, on standard types of equipment. Discounts from the reference price are also used when supplying industrial raw materials and average 2–5%. A simple discount includes a discount provided when purchasing goods in cash -
“cash discount”. It is given to sellers in cases where the reference price includes short-term credit and the buyer agrees to pay in cash. This discount is usually 2–3% of the reference price or corresponds to the loan interest rate on the financial market.
A discount for turnover, a bonus discount, is provided to regular customers on the basis of a special power of attorney. In this case, the contract establishes a scale of discounts, depending on the turnover achieved during a certain period (usually one year), as well as the procedure for paying amounts based on these discounts. For some types of equipment, bonus discounts reach 15-30% of turnover, and for raw materials and agricultural goods they are usually calculated at several percent.
Functional discount. Manufacturers offer functional discounts
(also known as retailer discounts) to those participants in the distribution process who perform certain functions in selling goods, storing them and keeping records. Manufacturers may offer different functional discounts to different sales channels because they provide different types of services to them, but by law, manufacturers must offer the same functional discounts to all members of a given channel.
Progressive discount - a discount for quantity or serialization is provided to the buyer subject to the purchase of a predetermined and increasing quantity of goods. Serial orders are of interest to manufacturers, since the production of the same type of product reduces production costs.
Dealer discounts are provided by manufacturers to their permanent representatives or sales intermediaries, including foreign ones. These discounts are common on cars, tractors and some standard equipment. Dealer discounts on cars vary depending on the make of the car and average
15 – 20% of retail price.
Special discounts (extra discount) are provided to privileged customers whose orders are particularly interested in sellers. The category of special discounts also includes discounts on trial batches and orders.
(discount for a trial lot), intended to interest the buyer, and discounts for regularity or stability of orders (discount for a regular purchases), with the help of which manufacturers strive to retain a regular clientele.
Export discounts (export rebate) are provided by sellers when selling goods to foreign buyers in addition to the discounts that apply to buyers on the domestic market. Their goal is to increase the competitiveness of a particular product in the foreign market.
Discount for off-season purchase is a measure of reduction in the standard selling price that is guaranteed to the buyer if he purchases seasonal goods outside the period of the year for which they are intended. The purpose of using discounts for off-season purchases is to encourage buyers to purchase these goods before the start of the next season, at the very beginning of it, or even out of season. This ensures faster asset turnover and allows manufacturers of seasonal goods to reduce seasonal fluctuations in the utilization of their production facilities.
With a well-established system of seasonal discounts, manufacturers have the opportunity to organize and complete the production of goods for the next season long before it begins and promptly begin preparations for the manufacture of products for the next season.
The amount of seasonal discounts is usually quite small and is determined by:
1) on the part of the buyer - the amount of costs for storing the goods purchased in advance before the start of the sales season
(including fees for loans attracted for this purpose);
2) on the part of the manufacturer - the amount of costs and losses that he would have to incur if the manufactured goods were stored until the start of the season in his own warehouses, and production was either stopped due to the deadening of working capital in finished product inventories, or was maintained through additionally attracted loans to replenish working capital.
Consequently, the amount of discounts should provide the buyer with savings greater than the increase in his costs of storing goods until the seasonal increase in demand. On the other hand, the manufacturer can provide such discounts - for an amount no greater than the amount of its losses due to the slowdown in capital turnover as a result of storing goods in its own warehouses before the start of the season and not receiving sales revenue.
The logic of discounts for off-season purchases requires their differentiation in time: the earlier the product is purchased before the start of the season, the larger the discount should be.
Discount for expediting payment. The main purpose of discounts for speeding up payment
– reducing the repayment period of accounts receivable and accelerating the turnover of the company’s working capital. Therefore, this commercial tool can be attributed to a greater extent to the sphere of management than pricing itself. But since such discounts are set in relation to prices, price specialists, together with financiers and accountants, traditionally determine them.
A discount for accelerating payment is a measure of reducing the standard selling price, which is guaranteed to the buyer if he makes payment for the purchased batch of goods before the deadline established by the contract.
The payment acceleration discount scheme includes three elements:
1) the actual quantitative amount of the discount;
2) the period during which the buyer has the opportunity to take advantage of such a discount;
3) the period during which payment of the entire amount of debt for the delivered consignment of goods must be made, if the buyer does not exercise the right to receive a discount for accelerated payment.
Accordingly, in contracts for the supply of goods, such a discount can be written in the following form: “2/10, net 30” (or in the English version -
"2/10, n/30"). And this will mean that the buyer is obliged to make full payment for the goods delivered to him within 30 calendar days from the date of receipt. But if he makes the payment within the first 10 days of this period, he has the right to automatically reduce the payment amount by 2%, i.e., take advantage of a discount for accelerating payment.
The rate for accelerating payment is usually determined by two factors:
1) the level of such rates traditionally established in a given market;
2) the level of bank interest rates for loans to replenish working capital.
The connection between the discount for speeding up payment and the price of credit resources is quite logical. If a manufacturer cannot achieve acceleration of repayment of accounts receivable, then it has to replenish its working capital mainly through credit. Accelerating payment for shipped goods reduces the need to raise funds and provides savings by reducing the amount of interest payments.
However, usually the level of discount for accelerating payment is significantly higher than the price of credit resources. Let's say the above rate according to the scheme
“2/10, net 30,” which is fairly typical of global trading practice, is effectively equivalent to an effective annual interest rate of 36%. And this is significantly higher than the cost of a loan in most developed countries of the world, where the annual inflation rate does not exceed
10% (say, in 1996, loan rates in European countries were about 7–8%).
This excess of the discount level over the price of loans is justified by the large positive effect that accelerated payment has on the financial condition of the selling company. This effect occurs due to the fact that early payments:
1) accelerate the receipt of funds to the seller’s account and improve the structure of his balance sheet, which is essential for him to obtain loans, and also affects investors’ assessment of the company’s position (including the price of its shares on stock exchanges);
2) reduce credit risks associated with accounts receivable and increase the reliability of financial planning;
3) reduce the company’s costs for organizing collection. accounts receivable.
Discounts to encourage new product sales. Such discounts can be considered as an addition to planned discounts that help promote a new product to the market. As a rule, such discounts in the form of financing a national advertising campaign indicating the names of the trading companies selling the product are not enough. For example, such advertising does not really give buyers information about where they can actually buy the mentioned product in their city (district).
Therefore, dealers and end sellers have to conduct their own advertising campaigns using local media outlets (whose advertising rates are usually lower than those in the national press or national television). This gives them the opportunity to indicate the addresses of their stores in such advertising, which actually provides an increase in sales.
A discount to encourage sales is a measure of reducing the standard selling price, which is guaranteed to resellers if they take for sale new products, the promotion of which to the market requires increased costs for advertising and the services of sales agents.
Discounts for complex purchases of goods. Many firms that sell lines of complementary products use a special type of discount to encourage customers to purchase several products from that line, i.e., bundled purchasing.
A discount for the complex purchase of goods is a measure of reduction in the standard selling price, which is guaranteed to the buyer if he purchases this product along with other complementary goods of this company.
The logic of such a discount is that the price of each product in the set is lower than with an isolated purchase, even from the same company.
An example of using discounts to encourage complex purchasing of goods is the organization of sales of the famous encyclopedia Britannica.
The range of products offered by the publisher of this encyclopedia includes the following items (prices in Dutch guilders as of October 12, 1995):
|Product |Prices when isolated |Share in the total cost |
| | purchase | the entire range of |
| | |isolated purchase |
|Isolated purchase |
|Encyclopedia |8080 |72.3 |
|"Britannica" | | |
|Yearbook "Book of the Year" |250 |2.2 |
|CD-ROM "Encyclopedia |2850 |25.2 |
|"Britannica" | | |
|I T O G O |11180 |100.0 |
|Complex purchase |
|Encyclopedia |4050 |72.3 |
|"Britannica" | | |
|Yearbook "Book of the Year" |123 |2.2 |
|CD-ROM "Encyclopedia |1427 |25.5 |
|"Britannica" | | |
|I T O G O |5595 |100.0 |
Thus, a buyer who wanted to purchase the entire set would receive a discount of 5585 guilders (11,180-5595), i.e. more than 3 thousand dollars, or 50% (5595/11180) of the total cost of the kit elements when purchased separately. Accordingly, with a complex purchase, the prices of each of the individual elements of the set would be lower (assuming the same share of each of the elements of the set in its total cost as with an isolated purchase).
Often, such a set of goods covered by a discount for complexity also includes goods that are not produced by a given company.
For example, companies that sell copiers allow customers to purchase them along with more paper, which ends up being cheaper than purchasing them separately. Similarly, computer companies now include a large set of software in their delivery package to customers, both already recorded on a hard drive and located on a CD-ROM (if the computer has a device for reading such discs).
Discounts for “faithful” or prestigious buyers. A special type of discounts found in commercial practice are discounts for “loyal” or prestigious buyers. Such discounts, as their name suggests, are provided to customers who:
1) or regularly make purchases from this company over a long period of time;
2) or belong to the “prestigious” category, which allows the fact of their purchase of this product to be used for its advertising
These discounts are provided on a purely individual basis and can be issued, for example, in the form of personal buyer cards. Many European food supermarkets have now begun to issue such cards.
As for discounts for “prestigious” buyers, they are most often not advertised and remain a secret of bargaining between the seller and such buyer.
The reason for such secrecy is the fact that this type of discount is the most blatant manifestation of price discrimination, which is generally inherent in the discount mechanism.
Meanwhile, the legislation of many countries categorically prohibits price discrimination. This forces firms to disguise the discounts they use and to come up with economic reasons why such discounts should not be considered price discrimination.
Discounts for quality. Unfortunately, quite often manufacturers do not show sufficient flexibility in meeting the requirements and offers of the market in terms of packaging, packaging, labeling, technical and operational characteristics of individual units, parts, etc. This negatively affects both sales volume and price.
Once established, a low price is difficult to change, especially in the minds of end consumers. An appropriate marketing technique is to offer a discount for completing the work required to adapt the product to market requirements. In practice, this is a fairly common case of industrial cooperation. It is important to understand that by providing such a discount, the supplier achieves only a temporary result (lower export price - net), but secures positions for its real increase after solving its production problems.
Discounts for returning previously purchased goods from this company (in the amount of 25
– 30% of the list price) are provided to the buyer upon return of an obsolete model of goods previously purchased from this company. Such discounts apply to the sale of automobiles, electrical equipment, rolling stock, standard industrial equipment, etc.
Discounts on the sale of used equipment. In different countries there are opportunities to profitably purchase used machines, mechanisms and other equipment. If, in addition, the maintenance is well organized, then such a purchase is a reasonable alternative to buying new equipment. You can work with new equipment for a long time, while operating costs are low. Prices for used equipment are sometimes up to 50% or more of the original price of the product.
Service discounts. A significant part of industrial products requires maintenance during operation. Unfortunately, many manufacturers underestimate the importance of this factor in the struggle for markets.
A service discount is preferred to creating and maintaining an effective service network, which requires significant investment and effort. This approach to solving the problem would be acceptable if it were possible to monitor the implementation of additional functions by the recipient and a way to evaluate the effectiveness of such a discount. Often, the provision of a service discount reflects, rather, the manufacturer’s neglect of its own economic interests.
Club discounts. There are many national and international discount clubs around the world that provide their members with “club price discounts” on services and goods. Members of such clubs can be individuals and legal entities, and there is associated membership.
The latter is essentially a sophisticated version of a serious hidden agent sales network based on international discount programs.
National and international clubs issue and sell licenses to service enterprises and shops, which undertake to provide price discounts to club members; such discounts are especially common on transportation, car rental, hotel and restaurant services, and insurance.
For club members, there are entire chains of stores selling industrial and other everyday goods at discounts.
Special clubs are aimed at wealthy clients, generating an elite society, where they provide significant discounts on luxury goods and non-traditional services, for example, VIP services.
The main incentive for an enterprise to participate in the discount (club) program is a significant increase in annual turnover due to an increase in sales volume, but with a slight decrease in the profitability of a single transaction.
Club members pay entrance and annual fees, receive a plastic personalized club card, as well as a regional directory of enterprises and stores that offer discounts on goods and services.
The directories provide the names and addresses of sellers providing such discounts, the size of these discounts and conditions (for example, the purchase of two or more types of goods and services), and the type of payment. Upon presentation of the card, a club member receives a price discount from 10 to 50 percent or more upon purchase.
Discounts taking into account intercultural communications. In practical activities, marketing faces a very important circumstance, which should be attributed to the so-called cultural differences, which is also the subject of marketing research.
In Arab, some Balkan countries and some Transcaucasian republics, during trade negotiations it is considered a matter of honor to achieve a large discount on the offer price. And although this circumstance is associated with a complex of Eastern mentality, many importers will not sign an agreement that does not contain a provision on discounts generally exceeding 20 - 30% of the proposed price. Since this fact is known in the marketing and trading environment, some companies consider it necessary to first artificially inflate prices by the expected percentage, and then present it with a discount specified in the contract.
This practice of negotiating price and the peculiar Eastern approach to discounting do not correspond to the philosophy and concepts of market activity of American companies. In the United States, the Federal Trade Commission has long been in force, restricting sellers from arbitrary price increases unless they result in real additional benefits for consumers. However, this does not prevent American companies from taking into account the different approaches and pricing policies of the companies with which they trade, and the specifics of the markets they are targeting.
The main criteria for focusing on one or another method of price modification should be the following: achieving benefits in the long term; receiving the planned (intended) profit from a specific transaction; satisfying the needs of consumers, who ultimately decide which supplier has a place in a given consumer market.
Tests. Offsets refer to other types of discounts from the list price. For example, a goods exchange offset is a reduction in the price of a new product subject to the return of the old one. Trade-in credit is most often used for the sale of cars and some durable goods. Sales promotion credits refer to payments or price discounts to reward dealers for participating in advertising and sales promotion programs.
Conclusion
Summarizing the practice of applied discounts, we can conclude that they help the price perform its stimulating function and help market research. Namely: they help reduce the costs of production, storage, and sales due to increased sales, facilitate the acquisition of regular customers and long-term planning of the company’s activities, stimulate orders of large volumes, and provide advertising assistance to sales on the market.
References:
1. F. Kotler “Marketing, Management”, “Peter”, St. Petersburg, 1999
2. "Prices and pricing", textbook for universities. Ed. V. E. Esipova,
"Peter", St. Petersburg, 1999
3. I. V. Lipsits “Commercial pricing”, BEK, Moscow, 1999
4. P. N. Shulyak "Pricing", "Dashkov and Co", Moscow, 1999
Setting a price is a decision that depends on the chosen marketing pricing strategy. Marketing pricing tactics involve the use of discounts
Discount is the amount by which the price is reduced and, at the same time, the amount by which the seller subsidizes the buyer to stimulate sales
Tactical decisions related to adjusting the base price through the use of discounts depend on the type of discount. The following types of discounts are distinguished:
1 functional (trade) discounts - discounts provided to a trading company for performing the functions of sales, storage, accounting, promotion
2. Dealer discounts - discounts provided to sales intermediaries to cover costs and ensure profit.
3. Progressive discounts - discounts that are established in case of a certain volume of purchases
4. "Skonto" discounts - discounts provided for paying for goods in cash or for early payments. Standard discount "discount": "2/10, net 30" This means that the goods must be paid within 30 days, but the buyer will pay 2% less if he pays within 10 days, if he pays within 10 days.
5. Quantity discounts - discounts provided for the purchase of a certain number of goods
6 bonus discounts - discounts provided to regular customers for a certain volume of purchases over a certain period of time, usually a year. In this case, a certain scale of discounts is established
7. Discounts to encourage sales of new products - discounts provided to intermediaries if they take on new products for sale, the promotion of which requires additional costs
8. Special discounts - discounts that are established for regular and exclusive customers in which the seller is interested
9. Export discounts - discounts that are provided to foreign buyers in addition to those discounts that apply in the domestic market
10 club discounts - discounts provided to members of discount clubs for the purchase of goods
11. Preferential discounts - discounts that are established with the aim of stimulating preferential categories of buyers or stimulating the sale of certain types of goods
12. Promotional discounts - discounts that are established during promotions
13. Holiday discounts - discounts that are established on the occasion of a holiday
14. Seasonal discounts - discounts that are established for purchasing goods during periods of lack of demand. Can be pre-season and post-season
15. Trade-in discounts (goods exchange offset) - discounts that are established on a new product in the event of a return of a similar old product
16. Hidden discounts - discounts that are set in the form of free services or a certain number of free samples
17. Closed (transfer) discounts - discounts that are established in intra-production cooperation of the enterprise
18. Discounts on bargaining - discounts that are established at the final stage of price negotiation
19. Final discounts - discounts that are set for the last batch (unit) of goods
20 complex discounts - discounts that provide for the simultaneous establishment of several types of discounts
21. Negative discounts - price premiums established for a small batch of goods, a higher level of product quality, urgent delivery, delivery directly to the place of use, etc.
Security questions
1 we present and characterize the main elements of the price
2. What is the essence of the concepts “price composition” and “price structure”?
3. How does the price structure differ depending on the length of the distribution channel?
4. Name the characteristics of price classification
5. What types of prices are distinguished based on the “nature of service turnover”?
6. What is the difference between market prices with horizontal fixation of market prices and vertical fixation?
7. Specify the difference between regulated, fixed and parity prices
8. Describe the “E” terms in the system of international trade terms. Inkotnerms
9. Is the use of discounts a strategic or tactical pricing decision?
Discounts are one of the most common ways to stimulate sales. We will analyze in detail the existing classification of discounts, the procedure for their application, which depends on a number of conditions, paying special attention to the provision of discounts in the light of the Federal Law “On the Fundamentals of State Regulation of Trade Activities in the Russian Federation.”
Discounts: types and brief description
In modern economic conditions, a system of price discounts is increasingly used as one of the most important factors in stimulating sales. This allows sellers not only to retain regular customers, but also to attract new ones.
There is no definition of the concept of a discount in civil and tax legislation. In accordance with the concepts of business turnover, a discount is understood as a reduction by the seller of the previously stated cost of a product, which leads to a decrease in its selling price.
Discounts can be divided into two groups:
- provided by the seller to the buyer as a result of a revision of the price of the goods specified in the sales contract (the buyer is given a discount for the purchased goods);
- provision by the seller to the buyer without changing the price of a unit of goods (discounts in the form of a premium, reward, bonus, etc.).
When setting prices for goods (with the exception of price ranking), the seller has the right to provide price discounts. In this case, providing a discount on the price can be considered as agreeing on a new price in the contract or as a change in price after the conclusion of the contract. The seller offers the buyer to fulfill certain conditions and take advantage of a discount. The buyer retains the right to take advantage of this offer or refuse it. Thus, the discount is two-sided.
The discount system is varied. First of all, it is necessary to distinguish between planned and tactical discounts.
Planned discounts are usually used for advertising purposes. For example, a manufacturing company installs refrigerated display cabinets for soft drinks in supermarkets. They are installed at the expense of the manufacturer, as a result of which the supermarket receives significant income at minimal costs.
Tactical discounts are of a different nature. The main ones are:
- discounts for the volume (quantity) of purchased goods;
- seasonal discounts (discounts for off-season purchases);
- bonus discounts;
- discount discounts;
- coupons (couponage).
The type of discount depends on the nature of the transaction, delivery conditions, relationships with customers, market conditions, and the seasonal nature of production and consumption.
Discounts for large volumes of purchases can be simple (non-cumulative), cumulative (cumulative) and stepped. The mechanism of their formation is different. So, simple discounts encourage buyers to purchase large quantities of goods of the same name. As a result, the selling company saves on costs of organizing sales, storing, transporting goods, processing documentation, etc.
But in this case (providing a discount for sales volume), the buyer must also take into account the economic consequences, and they are ambiguous. On the one hand, the buyer wins by purchasing goods at a reduced price, but on the other, he loses because he is forced to increase his costs for storing large quantities of goods (sometimes they are very significant due to the lack of their own warehouse facilities, etc.).
Cumulative discounts involve a decrease in the price of a product with an increase in the amount of purchases over a certain period of time, even if such purchases consisted of small-scale individual batches of goods. They got their name due to the fact that the volume of purchases is calculated on an accrual basis, that is, the accumulation (cumulative) of the amounts of goods sold.
The basis for differentiation of such discounts is the volume of purchases by the buyer. The procedure for their provision is different; it must be provided for in the contract for the supply of goods.
Discounts for expedited payment of goods often called “skonto” discounts. They are provided to buyers who pay for goods at an earlier date (in some cases, payment for goods in cash is taken into account in amounts not exceeding the established limits). When establishing such discounts, contracts should stipulate the amount of the discount, the period for its provision and the period for payment for the goods by the buyer.
The most widespread seasonal discounts(discounts for off-season purchases). They are pre-season and post-season.
Pre-season discounts are provided to the buyer if he purchases goods before the start of the next season, that is, outside the period of the year for which they are intended (sports, garden equipment, fans, etc.). In this case, discounts should be differentiated (the earlier before the start of the season goods are purchased, the greater the discount should be).
Post-season discounts usually installed before the end of the season (on clothing, shoes, fur products, accessories, etc.). As a rule, the largest number of purchases in this case are made in the first days of sales.
In Russia, unlike European countries and the United States, there are no mandatory dates and deadlines for such sales. This can be explained by the lack of an appropriate legislative and regulatory framework for prices.
A significant portion of buyers in the West also make their purchases in the first days of seasonal sales. Discounts at this time reach 70%. As a rule, the winter sale lasts from the Christmas holidays to mid-February, and the summer sale from the first days of July to mid-August.
Bonus discount usually provided to regular customers. The mechanism of action of such discounts is different. The following procedure for establishing a bonus discount is often used: a certain amount of money is credited to the buyer, calculated either as a percentage of the cost of the purchased product, or as a fixed amount for each purchase. Each time the buyer pays the supplier the full cost of the goods without taking into account tax discounts, at the same time the supplier credits part of the paid amount for the goods to the personal account of the buyer, who can use it to pay for the next batch of goods.
A bonus discount can also be provided to all customers (for example, in retail) when purchasing a particular product within a certain period of time. Typically, such a discount takes the form of a “gift” and is used as part of advertising campaigns in order to speed up the sale of goods. However, from a tax point of view, such a procedure for providing a discount may be disadvantageous to the seller, since the gratuitous transfer of goods is subject to value added tax (VAT).
Discount discounts are provided to regular customers for all or certain products on the basis of discount cards. The procedure and conditions for issuing them are different and are established by the seller. Such discounts can be simple or cumulative.
A slightly more complex form of price reduction is couponage, when the coupon owner is offered a discount in the form of:
- a certain percentage of the price of the product;
- a certain amount of money;
- reduction in the price of any product specified in the coupon.
Methods of distributing coupons are different (mailing, through the press, presenting a coupon to a visitor in a trading company, placing a coupon in the packaging of an already purchased product, etc.).
Obtaining a coupon from a retailer is the most effective form of distribution. The costs for it are insignificant compared to other forms, and the return effect, according to some experts, is 10-20%.
Having considered the main types of discounts, we will dwell on the issues of providing certain of them when concluding agreements between legal entities.
The procedure for providing discounts
As already mentioned, there is no official definition of the concept of “discount”. As a rule, it means a reduction in the original price of the goods established by agreement of the parties to the contract.
In accordance with civil legislation (clauses 1, 2 of Article 424 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation)), the execution of the contract is paid at the price established by agreement of the parties. Changing the price after concluding an agreement is permitted in cases and under the conditions provided for by the agreement, the law or in the manner prescribed by law. This fully applies to supply, purchase and sale agreements used by sellers and buyers in their activities.
Any changes to the contract, including those related to a reduction in the price of goods, are agreed upon by the parties to the purchase and sale transaction (clause 1 of Article 450 of the Civil Code of the Russian Federation).
From the point of view of civil law, a discount should be understood as a reduction in the original price of a product.
Discounts should also include bonuses. However, according to some authors, a premium and a discount are not identical, although they are a form of incentive for buyers. Thus, a bonus is understood as monetary or material encouragement for achievement, merit in any field of activity (for example, the purchase of goods in a certain quantity, early payment for goods, etc.).
However, the Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated 02/07/2012 No. 11637/11 states that premiums paid by the seller for fulfilling certain conditions of the supply contract are one of the forms of providing a discount, therefore, they can change the price of the product and influence the formation tax base for VAT. However, this provision requires appropriate clarification.
As you know, a significant part of goods is sold at free prices, that is, concluded by agreement of the parties. At the same time, federal laws may provide for state regulation of prices for certain types of goods and trade markups (markups) on their prices. In addition, government authorities may set maximum and/or minimum price levels.
Article 8 of Federal Law No. 381-FZ dated December 28, 2009 (as amended on December 31, 2014) “On the fundamentals of state regulation of trading activities in the Russian Federation (hereinafter referred to as Federal Law No. 381-FZ) provides that business entities engaged in trading activities when organizing trading activities, with the exception of cases established by this Law and other federal laws, they independently determine prices for the goods sold.
However, if federal laws provide for state regulation of prices for certain types of goods, trade markups (margins) on them, including the establishment of their maximum levels (maximum and (or) minimum) by government bodies, then the establishment of prices for such goods, trade markups ( markups) to prices are carried out in accordance with:
- specified federal laws;
- normative legal acts of these government bodies and (or) normative legal acts of local government bodies adopted in accordance with them.
Pay attention!
If the increase in retail prices for certain types of socially significant essential food products is 30% or more for 30 consecutive calendar days in the territory of a separate constituent entity of the Russian Federation or the territories of constituent entities of the Russian Federation, then the Russian Government has the right to set maximum permissible retail prices for them. This is done in order to stabilize retail prices for these types of trade for a period of no more than 90 calendar days.
The list of certain types of socially significant essential food products and the procedure for establishing maximum permissible retail prices is established by the Government of Russia.
The price of a contract for the supply of food products, which is concluded between business entities - suppliers of food products and those engaged in trading activities, is determined based on the price of food products by agreement of the parties, taking into account the provisions discussed above (Article 8 of Federal Law No. 381-FZ).
When concluding a supply agreement, remuneration may be included in the price of food products. It is paid to a business entity engaged in trading activities when purchasing a certain amount of food products.
The amount of remuneration is agreed upon by the parties to the contract when it is included in the delivery price. However, this remuneration is not taken into account when determining the selling price of food products. The amount of remuneration cannot exceed 10% of the price of purchased food products.
Payment of corresponding remunerations is not provided if trading activities are carried out with socially significant food products according to the list of the Russian Government.
It is not allowed to include in the price of a contract for the supply of food products other types of remuneration by trading entities when they fulfill the terms of this contract, as well as to change it (Article 8 of Federal Law No. 381-FZ).
When carrying out trading activities, business entities can provide services for advertising food products, marketing, and other services for promoting food products on the basis of contracts for the provision of paid services, that is, on the basis of separate contracts. Coercion to conclude such agreements is not permitted.
If the above requirements are not met, the costs of providing the relevant services to the seller will not be expensed for income tax purposes. Attention is drawn to this in the corresponding letters of the Ministry of Finance of Russia (dated October 12, 2011 No. 03-03-06/1/665, dated February 19, 2010 No. 03-03-06/1/85 and some others). In addition, in such cases administrative liability is provided (Article 14.42 of the Code of Administrative Offenses of the Russian Federation) in the form of a fine (for officials and organizations).
At the same time, it is prohibited to impose on a counterparty supplier of food products conditions to reduce the price to a level that, taking into account the trade markup (margin) to such a price, does not exceed the minimum price of such goods when they are sold to business entities when carrying out similar activities (Article 13 of the Federal Law No. 381-FZ).
Pay attention!
Providing a discount by the seller is possible both during the current delivery and after the goods have been shipped.
From the point of view of both accounting and tax accounting, providing a discount on the current supply of goods is the easiest way for counterparties. This can be explained by the fact that at the time of shipment of the goods, the seller and buyer know the final price recorded in the relevant shipping documents.
Issues of pricing and price discounts are directly related to VAT.
The seller's revenue is calculated in prices taking into account the discount provided. This price is taken into account when calculating VAT.
If the buyer is given a discount on the price after the goods have been shipped, then on the basis of clause 3 of Art. 168 of the Tax Code of the Russian Federation (hereinafter referred to as the Tax Code of the Russian Federation), the seller must issue to the buyer, within 5 calendar days from the date of drawing up an additional agreement to the purchase and sale agreement, an adjustment invoice, which is the basis for the seller to deduct the amount of tax that was additionally accrued when shipment of goods based on the original price.
FYI
When the cost of goods changes in the event of a price reduction, the seller's deduction is the difference between the tax amounts calculated based on the cost of shipped goods before and after such a reduction (clause 13 of Article 171 of the Tax Code of the Russian Federation).
In turn, the buyer of this product restores part of the amount of the so-called “input” tax, which he previously accepted for deduction. The difference between the amounts of tax calculated based on the cost of shipped goods before and after the price change is subject to restoration.
Incentivizing the buyer counterparty through premiums provided on the total price of goods sold over a certain period of time without changing the price does not allow the supplier of goods to issue adjustment invoices that provide for aggregate delivery figures. The procedure for issuing adjustment invoices is applicable only to cases of revision of the price of goods.
According to a number of taxpayers, the established rules for the use of adjusted invoices, which do not allow taxpayers to issue such invoices in conjunction with delivery indicators, lead to certain difficulties in their preparation and contradict the Tax Code of the Russian Federation.
Judicial practice
There are objections to this from the Supreme Arbitration Court of the Russian Federation (Resolution No. 13825/12 dated January 11, 2013). The court's position was justified as follows. Chapter 21 of the Tax Code of the Russian Federation defines special cases of reducing the cost of goods supplied, but they are the only possible ones in relation to reducing the initial price and reducing the cost of goods supplied. The court also noted that in Ch. 21 of the Tax Code of the Russian Federation does not provide for special provisions in cases of payment of premiums that do not affect the initial price for a certain volume of purchases. Therefore, if there is a change in the aggregate cost of goods shipped without a change in the unit price of the goods, the provisions of the tax laws regarding adjusted invoices do not apply.
Most often, a premium is paid for a certain volume of purchases by the buyer. According to the tax authorities, when such premiums are applied, tax obligations do not arise for either the seller or the buyer. This is explained by the definition of the object of taxation for VAT. In this case, the object of taxation is the sale of goods (work, services). There is no such realization when paying a premium.
The amounts of these premiums do not increase the tax base for VAT, since receiving a premium is not associated with payment for goods (work, services) sold, therefore, this amount cannot increase the buyer’s tax base for VAT. Corresponding explanations on this matter are given in letters from the Ministry of Finance of Russia, the Federal Tax Service of Russia and in individual resolutions of the Presidium of the Supreme Arbitration Court of the Russian Federation.
The situation is different with regard to VAT taxation of premiums paid to the buyer for performing any actions in the interests of the seller. The premium paid to the buyer for providing a service on behalf of the seller is a fee for providing the service. In this regard, the seller is obliged to issue an invoice (including VAT) to the buyer, and the buyer, in turn, will be able to take advantage of a tax deduction based on the invoice.
G. A. Gorina, Ph.D. econ. sciences, prof. Department of Taxes and Taxation of the Russian Economic University. G. V. Plekhanova
