Cashback, are refunds taxed?

CashbackWhat is the correct financial and tax treatment for amounts? The Refunds Are they taxed?

To clarify this is the revenue agency at Answer to question No. 338 Dated May 12, 2021.

The starting point for the clarifications comes from The question arises from a moment, A company that hosts foreign e-commerce sales ads on its site.

Cashback is a form of Sales incentive One of the e-commerce sites affiliated with the main portal and provides buyers with the possibility Partial recovery of expenses For purchases, by refunds.

Thus, it is a matter of returning a part of the amount to the buyer It is not subject to taxes.

Formulas case like Bring a friend Which, in the opinion of the Revenue Agency, falls within the Miscellaneous Income referred to in Article 67, paragraph 1, letter 1) of TUIR.

On a practical level, the Tax treatment Leave some questions open.

Cashback, are refunds taxed?

Refunds from Cashback plans I Taxable? What is the correct tax treatment for sums?

Questions are answered by the Revenue Agency with Response to Question No. 338, dated May 12, 2021.

Revenue Agency – Response to Interrogation No. 338, dated May 12, 2021

Payments as Cash Back – Tax Transaction.

The starting point for clarification is the tangible case presented by the applicant, the hosting company External ecommerce ads on your siteTo purchase goods or services.

Listings provide a discount percentage to the potential buyer, who can get it in shape Cashback.

According to the Revenue Agency’s interpretation, refunds should not be subject to tax because they are considered a Sales incentive for e-commerce sitesThis enables the buyer to recover part of the amount spent.

In this regard, the practice document emphasizes that:

This, therefore, is the return of the buyer (the natural person) for part of the expenses of purchases made through the portal, which is determined by applying the discount percentage “offered” by the user at the time of purchase, without any reference to the circumstance that is provided later and by someone Other than the supplier of the purchased good or service. “

Therefore, from the moment the cashback in question is not covered In any of the income groups Set out in Article 6 of the Unified Income Tax Law approved with dPR December 22, 1986, n. 917, Or TUIR, the amount cannot be taxed.

Cashback, is tax charged on “bringing a friend” refund?

Differs from Tax treatment Envisaged for the specific case dealt with in the practice document is that for damages that fall within the plan Bring a friend.

This explains the revenue agency’s conclusion:

The premise is different, as the company was instead given an amount to encourage use of the portal by other users (for example, with the ‘bring a friend’ formula), both with a fixed amount as a percentage, based on the purchases they made. Case, in fact, the sums paid will constitute different income falling within those referred to in Article 67, paragraph 1, letter 1) of the forgery. “

Basically, it is the amounts obtained in promotional programs that are planning to receive a corresponding amount Promote a specific portal It must be subject to tax.

The payment for these programs is considered a ‘Different income’ Hence, it must be declared on the tax return.

Opens appearance some questionsEspecially for participants in the respective programs.

Do participants have to make sure that personal income tax is applied to the amounts they received as cashbacks? Is it also up to check the submission of any one certificate, allowing, among other things, the amounts to be included in the pre-filled advertisement provided by the Revenue Agency? If this income is not declared, what are the penalties that the taxpayer and the company may face?

These aspects may be necessary More explanation By the Revenue Agency.