The company sells goods through a website. The fee for the goods sold is collected by the agent. Are such agency services subject to the value added tax?
The question is quite interesting
It is caused by the fact that agency relations are usually associated with the mediation (and in most cases this is really fair, taking into account the regulations of the “agency” chapter 31 of the Commercial Code of Ukraine).
In order to determine the consequences of VAT, it is necessary to use intermediary rules of para. 189.4 of the Tax Code of Ukraine (hereinafter - TCU). It should be recalled that they provide for that goods/services committed by an intermediary are considered to be supplies. In other words, if the intermediary sells goods belonging to the customer, then for such a sale he/she must calculate the VAT liability in the general order, despite the fact that goods did not belong to him/her.
Within the framework of agency relations, the State Fiscal Service of Ukraine (hereinafter - SFSU) does not always apply such rules. In the situation under consideration, the agent’s duty was the collection of payment for goods sold through the website of the customer (principal) in favor of end-users. As for the payment of fees, the agent acted on behalf of and in the interests of the customer (principal), but he/she did not have any relation to the sale of goods. Taking this into account, the SFSU in its individual tax advice stated that:
- the amount of money in terms of the cost of goods that the agent collects from buyers does not increase the VAT base of the agent. Moreover, this also means that the customer (principal) does not need to prepare/register a tax invoice for the agent;
- the basis of VAT for the agent is only the cost of the agency service itself (that is, only his/her reward).
It should be noted that according to our estimation, this is a rather positive conclusion
In addition, it is just not only for mentioned relationships (the sale of goods through the website and collecting fees for them), but in other situations - for example:
- condominium association collects payments from for utilities;
- bus stations collect fare;
- an individual collects payment for goods sold at a point of sale (unfortunately, tax payers are often abusive in this area).
