Rebate as Taxable Income?
One of the most important issues in business is acquiring loyal customers. Entrepreneurs, acting in this direction, decide on various methods, using, inter alia, rebates and other rebates.
Income in the light of the PIT Act
Pursuant to Art. 10 sec. 1 point 3 and art. 14 sec. 1 of the PIT Act, income from non-agricultural business activity is considered to be the amounts due, even if they have not been actually received, after excluding the value of the returned goods, discounts and discounts granted, and reduced by the due tax on goods and services at active VAT payers.
The Act does not explain the concepts of rebate and discount, as well as rebate, although this is an expression often used in economic transactions. Therefore, using the definitions of the dictionary of the Polish language, it can be stated that:
discount - a reduction in the price of a good or service, also as a form of compensation for a loss suffered;
discount - a discount on the price of goods covered by credit or installment sale, granted to the buyer paying in cash before the agreed date;
discount - a reduction in the price of a product by a certain amount; also: this amount.
The above statement is consistent with the statement that an entrepreneur, when granting a discount to his client, may reduce the amount of income taxable with income tax by its amount.
The above statement is also confirmed by the positions of tax authorities in individual interpretations. The interpretation issued by the Director of the Tax Chamber in Bydgoszcz of October 22, 2008 (ITPB2 / 415-750 / 08 / IB) can be quoted here:“(...)" discount ", according to the dictionary meaning of this term, means" a discount, a percentage concession from the agreed prices of goods, mainly to buyers who pay in cash, buy a large amount of goods at once or within a certain period of time, a discount ". In the future event presented in the application, the Company plans to organize a loyalty program in the chain of its stores, which will consist in earning points by customers for the purchases of goods. For the accumulated points, the customer will have the right to purchase goods for a price discount. The received price discount will be up to 99% of the value of the goods or services. Taking into account the above, in the situation presented in the application under the loyalty program, there is no award related to the sale of bonuses, but the purchase of goods or services with a discount. At the same time, the description of the future event included in the application suggests that the circle of those eligible for discounted purchases will be potentially unlimited. The discussed loyalty program, as indicated by the Company, is aimed not only at increasing the satisfaction and loyalty of existing customers, but also at attracting new consumers and increasing the Company's turnover and revenues through participation in the program. As a consequence, the use of the loyalty program on equal terms and discounts when purchasing goods or services by an unlimited group of people does not generate income within the meaning of the Personal Income Tax Act. The amount of the discount granted does not constitute an award related to the sale of bonuses and is not subject to the flat-rate tax referred to in art. 30 sec. 1 point 2 of the above-mentioned of the Act. "
How to settle the financial discount?
When applying a financial discount, i.e. giving your customer a discount on goods currently purchased or those that he may purchase in the future, you can deal with two situations.
The first one occurs when the seller leaves the price of the product at the time the customer buys it. Then the amount of such a discount should be included on the invoice or receipt from the cash register. The entrepreneur has the option to reduce his income on the date of the transaction.
Another way is possible - the discount received by the buyer applies to subsequent transactions during which it can be used. In such a situation, the seller includes the entire amount paid by the buyer during the transaction. However, you can reduce the revenue only when the buyer takes advantage of the discount. Importantly, there is no need to make corrections to previously entered transactions - all settlements can be entered on an ongoing basis.
Settlement of the goods discount
The concept of a goods discount is an event in which the seller adds a few free, additional pieces to a batch of issued material. In such a situation, in fact, the unit price of the goods sold decreases - more of it is sold for the same amount. When documenting such a transaction, the entrepreneur should take into account the discount granted. The taxable amount in this case becomes the actual amount paid by the buyer.
In order for the issue of additional goods to be treated as a merchandise discount, the surplus items may apply only to what is sold. Adding a different kind of gratuitous item to a transaction will be treated as a bonus sale, with different tax consequences!