Transactions of receipts and sales of goods should be reflected in accounting depending on the tax system on which a legal person-owner of warehouse store is registered. More information about tax accounting of such transactions is in the following.
Income tax
If a legal entity chose general taxation system, he/she should pay the income tax and the value added tax (hereinafter - VAT).
The subject to the income tax is a profit with the source of origin from Ukraine and abroad. It is determined by adjustment of the financial result specified in the financial statements of a company in accordance with National Accounting Regulations or IFRS, on the differences arising under the provisions of para.III of the Tax Code of Ukraine (hereinafter - TCU). It should be reminded that the adjustment of the financial result on differences is required for taxpayers with an income of more than UAH 20 million. In case of non-exceedance of the limit, the payer has the right to decide not to apply adjustments of the financial result on differences before taxation (excluding negative value of the subject to taxation of previous tax (reporting) years), indicating this in the declaration of income tax (sub-para. 134.1.1 of TCU).
Paragraphs 8 and 9 of Accounting Regulations 9 “Inventories” provide for that purchased goods are to be credited to the balance sheet at initial cost – the cost, which consists of the following actual expenses:
- the amount paid in accordance with the contract to the supplier (seller), with a deduction of indirect taxes;
- the amount of import duty (for foreign economic activity);
- the amount of indirect taxes payable in connection with the acquisition of goods, if they are not reimbursed to the company;
- transportation and procurement expenses;
- other expenses directly related to the acquisition of goods and bringing them to the state in which they are suitable for sale.
The goods should be recognized on the basis of primary documents, which are provided by the supplier. It could be delivery note or shipping document etc.
If the goods from the store-warehouse are sold retail, their assessment is usually carried out on the sales prices. In this case the average percentage of the trading margin products is to be applied. This method can be chosen by companies that have a significant and variable commodity classification with approximately the same level of trade margins (para.22 of Accounting Regulations 9).
According to para.6 of Accounting Regulations 15 “Revenue”, revenue from the sale of goods is recognized as income. The income arises in the increase of the asset or decreasing of obligations on the condition that income assessment could be reliably determined (para.5 of Accounting Regulations 15).
The income is reflected in accounting in amount of fair value of assets received or receivable (para.21 of Accounting Regulations 15).
Unified Tax
The legal entities that have chosen a simplified taxation system and are registered as unified tax payers (hereinafter - unified tax payers) of the third group can trade at retail from warehouse store.
The income of unified tax payers-legal entity is any income received by him/her during the tax (reporting) period in monetary form (cash or cashless), tangible or intangible forms (para. 292.1 of TCU).
It should be noted that income does not include:
- VAT amounts, if unified tax payers registered as a payer of this tax;
- amounts of funds that are returned to the goods buyer by letter of application for their return.
The date of receipt of income in case of sale of goods from store-warehouse at retail is the date of receipt of funds to unified tax payer in monetary (cash or cashless) form (para. 292.6 of TCU).
If sales of goods occur by using vending machines or other similar equipment that does not provide for cash register availability, the date of receipt of income is considered to be the date of withdrawal of cash proceeds from such vending machines (para. 292.7 of TCU).
VAT
VAT amounts paid (accrued) in connection with the acquisition of goods should be included in the tax credit on the basis of tax invoices, registered in the Unified Register of tax invoices (para. 201.10 of TCU).
VAT liabilities arise when the sale of goods. The base of VAT taxation is determined on the basis of the agreed (contract) value of the goods, but not less than the purchase price. The contract value of the goods includes any amount of funds, which are transferred to the taxpayer directly by the buyer through the reimbursement of the cost of goods (para.188.1 of TCU).
Date of occurrence of the tax credit and tax liability is determined by the rule of the first event (sub-para.187.1, 198.2of TCU).
It should be noted that these requirements apply both to legal entities on general taxation system and on unified tax payers of the third group in case of their registration by VAT payers.
As we can see, the current legislation does not impose special trade regulations from store-warehouse. Therefore, the business entities that have chosen this method of taxation should adhere to the generally accepted norms and rules established for the implementation of trade activities.
