Consultation on 14.05.19

Conducting an advertising company: registration and taxation of transactions for the free transfer of goods for promotional purposes


Documentation of transactions for conducting promotional actions on the legislative level is not regulated, but in our opinion, the taxpayer should have the following package of documents:

- Order of the head of the holding of advertising events, which specifies the date, place and purpose of the conduct, as well as the range of responsible persons;

- Calendar schedule for carrying out promotional activities with the definition of responsible persons;

- Estimates of expenses for an advertising measure with an indication of the nomenclature and quantity of goods / finished goods or advertising materials that are planned to be used during the promotion;

- Consignment note invoices for the issue of material assets: invoice-requirement for the release (internal transfer) of materials (form M-11), the act of acceptance-transfer of materials (form M-7), etc.;

- A report on the actual costs of an advertising measure approved by the manager.

Until recently, when considering the free transfer of goods within the framework of promotional actions, fiscal experts argued that charging tax obligations should only be carried out if the transferred values ​​had signs of dual use, especially when they could be used by the recipients for their own purposes. quality of goods. To date, the position of the fiscal service has changed, but also has no single taxation approach. In particular, there are three approaches to taxation:

- Operation for the free distribution of goods for the purpose of advertising is always subject to taxation in accordance with clause "a" of item 185.1 of the Tax Code of Ukraine (hereafter PCU). For example: from 13.06.16. No. 558/6 / 06-30-12-01-19, dated 19.04.16. No. 8819/6 / 99-99-19-03-02-15;

- Under such operations, a double tax base arises in accordance with clause "a" of item 185.1 of the PCU and the "g" of 198.5 PKU. For example, the letter of 11.11.15. No. 25227/10 / 28-10-06-11;

- For such operations, there are no tax bases, provided that the value of the donated advertizing values ​​is included in the cost price of the goods sold by the taxpayer. For example, the letter dated 06.10.16. №21760 / 6 / 99-99-15-03-02-15.

Unfortunately, the availability of P.14.1.191 PCU, which determined that the supply of goods is understood not only transactions in its sale, but also operations on its donation (ie, free transfer) provide the opportunity for specialists of the fiscal service to recognize such transactions as taxed.

If the management of the enterprise decides not to tax such transactions VAT, then in order to avoid conflict situations during the inspection, we recommend that at least the following information be indicated in the documents accompanying the promotional action (order, estimate, report on the advertising measures, etc.):

- The fact that the purpose of an advertising company is to increase sales, awareness of potential buyers for products, etc. (this is necessary to communicate with the business activities in order to prevent the payment of obligations under subsection "g" p.198.5 PCU) ;

- The fact that the cost of used goods during the promotional campaign will be taken into account when forming the selling prices for products. In addition, this thesis should be fixed, for example, in the Order on the pricing of the enterprise. This will give the opportunity to use the fiscal service's view of non-taxation of the cost of advertising samples, which are included in the cost of goods sold.

In the tax accounting for income tax, when performing operations for the free distribution of promotional products, tax differences should not arise, taking into account the following:

In accordance with clause 160.5.10 of the PCU, the financial result before taxation increases, in particular, by the amount of goods, works, services provided free of charge to non-tax payers (except for individuals). During the promotional campaign, the advertiser's responsible person makes a free distribution of advertising products among individuals, not legal entities. The report on the use of materials during the promotional campaign indicates the number of products distributed, and not determined by the number of people who received such products.

Consequently, no primary document will prove that the company made a free transfer of advertising products to legal entities that are not taxpayers. For these reasons, we consider that the application of item 140.5.10 of the PCU during an advertising campaign is inappropriate.

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