Commission contract and "uniforms"
What is a commission agreement?
Let's consider how the commission contract works in practice. Let's assume that there are two FOPs: a supplier (principal) and a seller (commissioner), who decided to enter into a commission contract. According to Article 1011 of the Civil Code of Ukraine , under such a contract , the commission agent undertakes the obligation to carry out one or more transactions on behalf of the principal, but at the expense of the principal, receiving a fee for this .
That is, in this case, the FOP seller sells goods on his own behalf. At the same time, such a FOP must have the appropriate KVEDs , in particular for retail trade of goods and KVED 46.19 "Activities of intermediaries in the trade of a wide range of goods" .
The FOP seller must spend the full amount of revenue through the cash register or use cashless payments, which allows you to work without PRO. However, the tax authorities can consider all the funds that come to the account of the FOP seller as his income. This can create risks of exceeding the income limit, which will lead to fines or transition to the general taxation system (18% tax and 5% military levy).
The work of the FOP under the contract of the commission in practice
We will show you in practice how a commission contract can work. After signing the commission agreement and receiving the goods from the FOP-supplier, do not forget to draw up and sign the act of acceptance and handover of the goods! The FOP seller can sell goods in any convenient way for him: via the Internet, Nova Poshta, a physical store, etc. However, it is worth understanding that it is the FOP seller who receives funds from buyers and, accordingly, he is responsible for the fiscalization of the received payments for the goods. After the full sale or a certain part of the goods, depending on how exactly it is written in your contract, the FOP seller returns money due to the sale of the goods to customers, minus the commission fee, the amount of which is also prescribed in the contract. Before the transfer of funds, the FOP seller must provide a report and an act of services provided to the FOP supplier, which will clearly state the total amount received by the FOP seller on his account and the amount of the commission . Or the FOP seller can transfer the full amount to the account of the FOP supplier, after which the FOP supplier transfers the amount of his reward to the FOP seller in accordance with the commission agreement.
The FOP seller pays taxes from the amount of the commission fee, and the FOP supplier pays taxes from the amount sent by the FOP seller . FOPs will not enter the total turnover of goods in the tax declaration, but only the amount of the commission.
If you have a question, what is the best group of the simplified taxation system for work under a commission contract. The answer will not be obvious, as it depends on the group of goods you sell and the amount of your income. If the group of goods allows to be in the 2nd taxation group, then it is more profitable for the FOP to be in the 2nd group, because in the 2nd group the FOP pays a fixed tax every month. As of 2024, this is UAH 1,420 per month, and the single tax is UAH 17,040 per year. In the 3rd group, the FOP pays tax in the amount of 5% of the income received, that is, here already the tax depends directly on the income. Thus, you should calculate your approximate income for the year and compare the amount of tax that will be more profitable for you.
There are nuances of the commission agreement that should be taken into account
Taxpayers in their reports and explanations indicate that the FOP seller, after selling the goods under the contract of the commission, must spend the full amount of the transaction through the cash register, or can use the non-gothic method of the account and work without PRO. This means that the tax office will see the entire turnover of funds on the FOP, and not just the % of the reward, and with such high turnovers, the risk of inspection is high. Therefore, during the inspection, it is necessary to have a correctly executed commission agreement, correctly recorded receipt of commission remuneration, reports, acts of acceptance and transfer of goods, acts of acceptance and transfer of services provided .
The biggest risk is that the commission agreement will be invalidated and this will mean that the FOP seller had a full turnover, and therefore exceeded the limits of the simplified system. And on this entire exceeded limit, the FOP can independently pay 15% tax on the overlimit amount, or the DPS retroactively transfers the FOP to the general taxation system and obliges the FOP to pay 18% income tax and 1.5% military levy on the received income for the period of stay on the general taxation system.
However, analyzing the judicial practice, if there is a dispute between the DPS and the FOP regarding the determination of the amount of income under the contract of the commission. The court adheres to the position that the income of the FOP, which acted as a commission agent in the contract of the commission, is only the commission fee, and not the entire amount received in the account . Let us cite several court decisions on this as an example.
On December 2, 2021, the Fifth Court of Appeal considered case No. 540/2683/21 , where the dispute between DPS and the FOP seller, who worked under the contract of the commission, was resolved. DPS defended its position regarding the fact that the income of the FOP-seller is the entire amount that came to his account, despite the commission agreement. Instead, the FOP seller claimed that his income is only the amount of the commission fee, and the rest of the amount is considered the income of the FOP supplier, to whom the FOP seller transferred the funds. According to the terms of the commission agreement, the commission fee was 5% of the contractual value of the sold goods, which the FOP seller kept for himself, and the rest was sent to the bank account of the FOP supplier. The FOP-seller had all the appendices to the commission agreement, which clearly stated the amount of the commission agent's remuneration.
According to the annexes to the contract of commission No. 1 dated January 3, 2018 - acts of acceptance and transfer No. 1 dated January 3, 2018 (in the amount of UAH 3,842), No. 2 dated April 1, 2018 (in the amount of UAH 6,376), No. 3 dated May 1, 2018 (in the amount of UAH 14,065), No. 4 of 06/01/2018 (in the amount of UAH 378), No. 5 of 07/26/2018 (return of products in the amount of UAH 3,302), No. 6 of 08/01/2018 (in the amount of UAH 260,747), No. 7 of 08/30/2018 (in the amount of UAH 75,765), No. 8 of 09/30/2018 (in the amount of UAH 61,645) - during 2018, the FOP seller received products (mobile phones, mobile cellular communication terminals, tablets, computer equipment and accessories) for a total amount of UAH 419,516.
In view of the fact that in accordance with the provisions of Art. 292 of the Tax Code of Ukraine, the income of the FOP-seller under the specified contracts of the commission is actually the amount of UAH 20,976.75. and UAH 4,265.60, not UAH 466,070.09, as established during the inspection, the panel of judges agreed with the fact that the decision of the DPS regarding the application of penalty sleds is illegal and subject to cancellation.
On 04/07/2021, the Second Court of Appeals passed a decision in case No. 520/3793/2020 , in which the DPS also stated that the income of the FOP-seller is the entire amount received on the account of the FOP, and by its decision obliges this FOP to pay fines, which the FOP-seller appealed in court.
A commission agreement was also concluded between the FOP-seller and the FOP-supplier, which stipulates that the goods that came to the commission agent from the principal for the implementation of the transactions provided for in this contract are the property of the principal, and the funds received from the sale of goods belonging to the principal to third-party buyers are the property of the principal. The court in this case reasoned that in the absence of transfer of ownership of the goods when they are transferred from the principal to the commission agent, the funds received by the FOP seller from third parties as payment for the value of the goods to fulfill the requirements of the commission contract are not the income of the FOP seller from the sale of goods.
As proof that the funds were sent to the FOP-supplier, the FOP-seller provided settlement receipts to the court. Under such circumstances, the panel of judges agreed with the arguments of the FOP-seller that the disputed decisions of the tax authority were made in violation of the norms of the current legislation, are illegal, and therefore subject to cancellation . Thus, even if the DPS will not take into account the commission agreement and claim that your income is the entire amount that you received on the account, you will always have the opportunity to go to court to challenge such a decision of the DPS.
The above conclusion corresponds to the legal position of the Supreme Court set forth in the resolution of July 17, 2020 in case No. 826/8493/18 .
The commission agreement is not only a salvation for FOPs whose income reaches the established limit for the current calendar year, but also a certain mechanism of cooperation between FOPs engaged in trade in goods. However, the contract of the commission is quite complex and requires clear regulation in order for cooperation on it to be transparent and legal. Because if several points are not taken into account, this contract may be considered invalid or work in the wrong direction. The biggest risk of this contract is that the income of the FOP seller (commissioner) will be recognized as the entire amount received on the account for the reporting period . However, not everything is so clear-cut. If we take into account judicial practice, it should be understood that the decision of the DPS is not the last instance, it can be challenged in court and achieve a positive result. However, it is worth remembering that having only a commission agreement is not enough, all attachments must be present to confirm the validity of your income . And one of the biggest advantages of this contract is that the FOP seller will receive the original documents for the goods upon receiving the goods from the FOP supplier and the FOP seller will declare only the commission fee, and the FOP supplier will declare the difference between the amount of the sold goods and the commission fee.
Templates that may be useful:
- Contract of the commission on the import of goods between legal entities (Ukraine), Ukraine ;
- Agency contract (Ukrainian) ;
- Agency contract (Ukrainian-English) ;
- Agreement on the provision of services (any) (Ukrainian-English), universal ;
Date of publication: 14.02.2025