With the help of a credit note, which is widely used in foreign economic activity, the seller informs the buyer, in particular, about the provision of bonuses in the form of discounts or premiums. We have already explained how the credit note in the form of a discount on the goods is reflected in the account. Now let's talk about the tax consequences of such a transaction.
Income tax
The object of taxation of income tax is the profit, which is determined by adjusting the accounting financial result before tax on the differences provided by the Tax Code of Ukraine (hereinafter – the Tax Code) (subitem 134.1.1 of the Tax Code). There is no provision for pre-tax adjustment of the financial result on the difference in transactions for obtaining a credit note from a non-resident supplier. Accordingly, such a transaction is reflected in accordance with the accounting rules.
At the same time, a high-income earner could have a 30 percent tax difference under Art. 140.5.4 TCU in the period of receipt of goods from a non-resident, which belongs to:
- List of states (territories) that meet the criteria set out in subitems 39.2.1.2. 39.2.1 item 39.2 Art. 39 of the Tax Code of Ukraine, approved by Resolution of the Cabinet of Ministers No. 1045 of December 27, 2017 (hereinafter – List No. 1045);
- List of organizational and legal forms of non-residents who do not pay income tax (corporate tax), in particular tax on income received outside the country of registration of such non-residents, and/or are not tax residents of the country where they are registered as legal entities, approved by Resolution of the Cabinet of Ministers No. 480 of July 4, 2017 (hereinafter – List No. 480).
Although no adjustment is provided for differences in income tax returns, a resident buyer may reflect this difference taking into account the discount granted by the non-resident in line 3.1.7 of Annex DI to the return.
Transfer pricing
The basis for determining the cost criterion of controlled transactions is the contractual price of goods. The credit note changes the value of delivered goods determined by the agreement with the nonresident, so when determining the cost criterion of controlled transactions, their volume is calculated at the contractual price of such goods, taking into account changes according to the credit note provided by the non-resident. In the Report on controlled transactions related to the use of a credit note, they are indicated in accordance with the accounting indicators of such a transaction (category 137.07 “ZIR”).
If you submitted a Report on controlled transactions before you received a credit note, then the information reflected in it is not provided in full. Under these conditions, it is possible to submit to the controlling body a clarifying Report (clause 2 of the Procedure for compiling the Report on controlled transactions, approved by Order of the Ministry of Finance of Ukraine No. 8 of January 18, 2016).
VAT
For transactions on import of goods, the date of assignment of amounts of value added tax (hereinafter – VAT) to the tax credit is the date of payment of VAT at customs (items 187.8, 198.2 of the Tax Code). At the same time, the document certifying the right to a tax credit is a customs declaration confirming payment of the tax issued in accordance with the requirements of the legislation (item 201.12 of the Tax Code). The tax base for goods imported into the customs territory of Ukraine is their contractual value, but not less than the customs value of these goods, including duties and excise taxes payable and included in the price of goods (item 190.1 of the Tax Code).
Therefore, whether it is necessary to adjust the import VAT by the amount of the discount granted by a non-resident depends on whether the customs value of the imported goods will be adjusted. It will be recalled that changes to the customs declaration may be made using the adjustment sheet in the manner prescribed by clause 37 of the Regulation on customs declarations, approved by Resolution of the Cabinet of Ministers No. 450 of May 21, 2012. The adjustment sheet is filled in and issued by the customs authority, when it is needed to correct information related to the surcharge or refund of customs duties. On the basis of this adjustment sheet, the taxpayer excludes the amount of VAT specified in the customs declaration from the tax credit.
According to the tax authorities, if a non-resident supplier issues a credit note in the form of a discount on goods, there are no grounds to change the information in the customs declaration according to the documents created after customs clearance of goods, and therefore there are no grounds to adjust the tax credit determined based on the customs declaration (category 101.04 “ “ZIR”).
Therefore, having received a discount on the goods after customs clearance, you do not have to adjust the tax credit.
