Agency agreements: nuances of execution and benefits for business

An agency agreement is one of the basic tools when modeling a group of companies. TaxCoach experts tell you how this tool will help you formalize relationships with geographically remote sales representatives.

Or vice versa, with a single buyer accumulating applications from independent entities and ultimately receiving a lower supply price for everyone.

Yes, this agreement has examples of unfair use when it is concluded solely for the purpose of tax savings. However, its thoughtful application can be very useful for business.

In practice, the following questions arise:

• distribution of rights and obligations of the parties under the agreement;
• determining the amount of remuneration;
• business purpose of choosing an agency relationship model;
• and what to do with the tax authorities’ particular focus on the agency model.

These are the ones we will look into.
The essence of the agreement

That is, this design can be used both according to the commission model and the order: In accordance with Art. 1005 of the Civil Code of the Russian Federation, under an agency agreement, one party (agent) undertakes, for a fee, to perform legal and other actions on behalf of the other party (principal) on its own behalf, but at the expense of the principal or on behalf and at the expense of the principal.

If the agent acts on his own behalf, the rules on the commission agreement apply to the relationship.

The agent independently, on his own behalf, negotiates and enters into contracts with third parties. Moreover, it may not follow from the content of these contracts that he acts as an agent, i.e. in the interests of another person. All payments are made through the Agent’s bank account, who transfers money to the principal for the goods sold (sales agent) or pays from his account for the purchase of ordered products (purchase agent).

From the funds received into the agent’s account, he withholds his remuneration (and taxes it at his own tax rate) and compensates for other expenses, if the possibility for this is provided for in the agreement. Or he transfers everything to the principal, who pays him separately.

If the agent acts on behalf of the principal, then the rules on the contract of agency apply to the relationship. In this case, the contract is concluded on behalf of the principal by an Agent acting under a power of attorney. And all calculations are made through the Principal’s current account, and the Agent is transferred only the agency fee (which he also taxes at his own tax rate) and, possibly, additional expenses stipulated by the agency agreement are compensated.

The choice of the final version of the contract structure depends on the specifics of the actual situation. For example, a purchasing agent representing the interests of several principal buyers must, of course, act on his own behalf. This is the whole point: one contract is concluded with the supplier for a large volume of supply.

The opposite story is with sales of goods from a well-known manufacturer, a unique supplier. Here, most likely, no one will want to enter into an agreement with an unknown agent. His task is to organize a transaction, shipment, and receive his reward.

However, it should be borne in mind that there are restrictions on the use of an agency agreement in some areas of activity. For example, in order to protect the interests of manufacturers/suppliers of products, retail chains are prohibited from taking goods “for sale,” that is, without transferring ownership rights to them.

Pros for the agent himself

1. Reducing the cost of purchasing goods. By concluding an agency agreement, you receive the goods from the supplier for free. You will transfer the proceeds from sales to the supplier, and he will pay you a commission.
2. Reducing the tax burden on the simplified tax system. Under an agency agreement, income is only your remuneration, and not all the money that went through the account. For example, you place an advertisement - the client pays money, most of which you transfer to Yandex. It is not profitable to pay tax on the entire amount, so enter into an agency agreement and take into account only your remuneration in taxes.

Distinction between the property of the agent and the principal

Things received by the intermediary from the principal (or acquired by the intermediary at the expense of the principal) are the property of the principal.
In this case, the agent is responsible to him for the loss, shortage or damage of this property (clause 1 of Article 996, clause 1 of Article 998, Article 1011 of the Civil Code of the Russian Federation). In relation to, for example, the principal's goods, the parties usually have no questions - the intermediary accepts them for off-balance sheet accounting. But with regard to other objects of civil rights, the situation is not so clear.

By virtue of Article 128 of the Civil Code of the Russian Federation, the objects of civil rights include:

— things, including cash and documentary securities, other property, including non-cash funds, uncertificated securities, property rights;

— results of work and provision of services;

— protected results of intellectual activity and means of individualization equivalent to them (intellectual property);

- intangible benefits.

From this article it follows that, for example, non-cash funds refer to other property, and not to things. And this causes difficulties for the parties to the agency agreement in a situation where the intermediary is involved in the settlements, and the third party, for one reason or another, did not fulfill its contractual obligations (for example, delayed payment) or, on the contrary, transferred an advance (and then did not contact for more than three years, or was liquidated).

On the one hand, based on the wording of Article 128, 996 of the Civil Code of the Russian Federation, the principal does not have ownership rights to non-cash funds received from the buyer to the agent’s account.

At the same time, with regard to the commission agreement, the Supreme Arbitration Court of the Russian Federation explained (clause 9 of the Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated November 17, 2004 N 85) that, within the meaning of Art. 999 of the Civil Code of the Russian Federation, in the absence of an agreement between the parties to the contrary, the commission agent is obliged to transfer to the principal the amounts received from the sale of goods owned by the latter as they are received, and not based on the results of the execution of the principal’s instructions in full. This means that the obligation to transfer to the principal the amounts received from third parties arises from the commission agent immediately at the time of receipt of these amounts and is subject to fulfillment within a reasonable time, unless otherwise established by the commission agreement.

It turns out that all amounts (including advances) that the commission agent received from the buyer under the purchase and sale agreement (concluded on behalf of the principal) must be transferred to the principal. This obligation arises immediately upon receipt of the amount, while the contract may agree on the period during which such amounts are transferred to the principal.

If a third party has violated its obligations under an agreement concluded with an intermediary, then clause 2 of Article 993 of the Civil Code of the Russian Federation establishes a general rule, according to which in the event of a third party’s failure to fulfill a transaction concluded with him by the commission agent, the commission agent is obliged to immediately notify the principal about this, collect necessary evidence, as well as, at the request of the principal, transfer to him the rights under such a transaction in compliance with the rules on the assignment of claims.
Since the rules established for a commission agreement are also applicable to an agency agreement (Article 1011 of the Civil Code of the Russian Federation), the amounts of payment received from third parties and held by the agent should be considered as an obligation of the agent to the principal. The agent has no right to keep them. Similarly, the intermediary transfers the debts of third parties to the principal.

Moreover, if there is a debt of the principal to the agent, the intermediary has the right to withhold the amounts due to him under the agency agreement from all amounts received by him at the expense of the principal (Articles 410, 997, 1011 of the Civil Code of the Russian Federation).

Three people are involved in the agency agreement

1. Principal - hires an agent and instructs him to sell or buy a product or service.
2. Agent - carries out the instructions of the principal as an intermediary between the seller and the buyer.
3. Seller or buyer - depends on whether the agent is buying or selling.

It's easier to understand with examples.

You have an online store. To deliver the goods, you contact the courier service. In this situation, you, the principal, hire an agent - a courier who delivers the goods to the buyer and receives payment.

You become a principal, even when receiving payment using electronic money (Yandex.Money, PayPal, etc.). After all, the buyer does not pay you directly; the intermediary - the payment system - intervenes in the matter again.

Sometimes the principal instructs the agent not to sell, but to buy the goods. For example, you, the principal, hire a realtor - agent to buy an apartment. This situation also applies to agency transactions.

Tripartite agency agreement or additional agreement?

If the parties decide to change or supplement the dispositive rules proposed by the Civil Code, then it is recommended to pay close attention to the development of new rules. As an example, let’s consider a situation where the parties to an agency agreement decided to involve a third party, a subagent, in the execution of the transaction. The circumstances of his involvement in legal relations can be fixed in a separate agreement between the agent and the additional contractor or in the main agreement, which will acquire the status of a tripartite one.

What you should pay attention to?

1. On the subject of agreement.

Within the framework of a trilateral transaction, it is determined according to general rules. If the agent and subagent enter into an additional agreement, then they must remember that its subject cannot be broader than the subject of the main agreement. Violation of this rule may entail recognition of the additional agreement as an independent transaction, the actions of which must be performed at the expense and in the interests of the agent.

2. The responsibility of the subagent.

As a general rule, the agent is responsible for the actions of the subagent to the principal (Article 1009 of the Civil Code). However, when concluding a tripartite agreement using the mandate model, the parties should remember that, guided by Art. 1011 and 976 of the Civil Code, the agent will not be responsible for the actions of the principal.

The agent works on his own behalf or on behalf of the principal

The agent carries out the assignment in two ways - on his own behalf or on behalf of the principal.

In the first case, the agent introduces himself by his own name and draws up all documents in his name, as if there were no principal at all. The client may not even know that he is working with an intermediary, and will turn to the agent with questions and complaints.

In the second case, the agent draws up all documents in the name of the principal and, as an independent entrepreneur, does not participate in the transaction. This is equivalent to working under a power of attorney, and the agent has no obligations to the client.

Accounting for the purchase of goods for the principal, principal or principal

A commission agent, attorney or agent can not only sell the goods of the principal, principal, or principal, but also acquire any valuables for the latter.

In this case, the process of actual receipt of goods to the consignor, principal or principal can be organized in one of the two most commonly used ways:

1. the goods arrive at the warehouse of the commission agent, attorney or agent and are subsequently transferred by him to the principal or principal;
2. the recipient of the goods is directly the consignor, principal or principal.

In the first case, the receipt of goods and its subsequent transfer to the consignor, principal or principal are reflected in account 004 “Goods accepted for commission” or 002 “Inventory assets accepted for safekeeping.”

According to paragraph 6 of PBU 5/01 “Accounting for inventories”, approved by order of the Ministry of Finance of Russia dated 06/09/2001 No. 44n, fees paid to the intermediary organization through which inventories were acquired are included in the actual costs of acquiring inventories. Consequently, in the accounting of the principal, principal or principal, the amount of remuneration paid to the commission agent, attorney or agent is included in the cost of the purchased goods.

The agent receives compensation from the principal

The agent's income is the remuneration he receives from the principal. There are a lot of options for calculating it, from simple to complicated. Therefore, we recommend that you pay attention to this clause in the contract. Here are some ways to determine your reward:

1. A specific amount per transaction. This is a reliable option since you know the amount of the reward in advance. But this is not always beneficial for the agent, since he will not be able to earn more than the agreed amount.
2. Percentage of the transaction. This is more profitable for the agent and motivates him to sell more. For example, according to the terms of the contract, the agent will receive 10% from each coffee maker sold. If an agent sells 5 coffee makers for 10,000 rubles, his revenue will be 5,000 rubles.
3. A markup on the price of a product or service. The principal sets the minimum price at which the agent can sell the goods, but does not limit it to the maximum. This method motivates the agent to sell at a higher price. For example, the principal instructs to sell a coffee maker for at least 10,000 rubles. The agent sets his price - 12,000 rubles. After selling the coffee maker, he will transfer 10,000 to the principal and keep 2,000 rubles for himself. This will be his reward.

In addition to the amount of remuneration, the agent and the principal agree on the timing of its payment. There are also several options here:

1. The principal pays the agent before the work is completed.
2. The agent transfers the proceeds from sales minus his remuneration to the principal.
3. The principal pays the agent after the contract is executed. If no deadline is specified in the contract, the principal pays the remuneration within a week after receiving the report from the agent.

Agency agreement through the eyes of the tax authority

Along with the above advantages of using an agency agreement in business practice, it is also well known to regulatory authorities as a tax optimization tool, in which the separation of the functions of the principal (owner of the goods) and the agent is artificial, the sole purpose of which is to save on income taxes.
How can we distinguish between situations when the use of an agency agreement is justified and meets the true intentions of the parties, and when it is artificial?

In answering this question, you can rely on the opinion of the tax authorities. The following circumstances will indicate the artificiality of the agency agreement:

• facts of transfer of funds by the commission agent who accepted the goods for sale before the actual sale of the goods. We have already said above that the agent acts at the expense of the principal and cannot finance it at his own expense;
• inclusion in the contract of the agent’s obligation to pay for the goods no later than a certain date. Likewise, the agent cannot be sure when he will sell the goods, so he cannot take on the risks of the principal and transfer his funds to him. This condition is typical for a supply agreement, but not an agency agreement;
• lack of agent reports or their non-compliance with legal requirements and/or contract terms.

You may ask, what are the “tax savings” that the tax authority is struggling with in this case, because when selling products, the agent transmits the tax system of the principal.
Accordingly, if he applies the OSN, then all sales are subject to VAT and income tax. However, tax authorities are interested in ensuring that taxes are calculated and paid as early as possible. Thus, the transfer of goods to an agent under a commission agreement is not a sale and does not entail at that moment the principal’s obligation to pay VAT and income tax. The grounds for assessing taxes will arise only when the goods are sold to the final buyer, and this may happen in the following tax periods.

In addition, if the agent taxes his remuneration under the simplified tax system, reclassifying the relationship as a supply will allow additional VAT and income tax to be charged to the Agent himself as a reseller.

Another example is the use of an agency agreement for regional sales.

Planning to enter a new region, the company is looking for a person to distribute products. The main clients are retail stores in the “convenience store” format, which is still preserved in small towns and rural settlements. Such a person independently determines whether he will work alone or hire subordinates, how often he will travel around stores, how he will build relationships with customers, and even whether he will have an office or a sufficient “mobile point” in the form of a car.

It is not very reasonable to employ such employees, because the Labor Code describes the process, not the result of labor. The company is only interested in the result - sales volumes, the number of returns and complaints from customers. For the successful fulfillment of assigned duties, the company is ready to pay a remuneration, without any guaranteed part, which fits into an agency agreement based on the model of a mandate agreement. There may be several such entrepreneurs (each is assigned a certain territory).

Another situation. As they say, feel the difference. The manufacturer’s office employs a pool of 40 sales people who immediately became individual entrepreneurs. But they still come to the office at 9 am, leave at 6 pm and coordinate their vacation schedule. In this case, we are most likely talking about the far-fetched design.

The principal reimburses the agent for expenses

One of the main advantages of a contract for an agent is the minimal cost of its execution.

Firstly, the agent does not spend money on purchasing the goods, because they belong to the principal. And if a product sells poorly, it does not cause losses.

Secondly, the principal reimburses the agent for expenses under the contract. It is possible to set a fixed amount of compensation without taking into account actual costs. Another way is to calculate it based on the agent's actual expenses. Then, in order not to go broke on compensation, it is important for the principal to define in the contract:

• what expenses he reimburses (so that the agent does not include his morning coffee in the list) and their maximum amount;
• documents with which the agent confirms expenses.

Taxation of activities of commission agent, attorney and agent

The feature we have highlighted regarding the rules for taxing commission transactions, orders and agency agreements with value added tax allows us to classify these transactions of a commission agent, attorney or agent as sales of services.

Let us recall that Articles 38 and 39 of the Tax Code of the Russian Federation divide all business transactions of taxpayers carried out for the purpose of making a profit into three types:

1. sale of goods;
2. implementation of work;
3. sale of services.

A service, in accordance with paragraph 5 of Article 38 of the Tax Code, for tax purposes is recognized as an activity whose results do not have material expression and are sold and consumed in the process of carrying out this activity.

According to paragraph 1 of Article 39 of the Tax Code, the sale of goods is recognized as the transfer on a paid basis (including the exchange of goods) of ownership of goods by one person to another person, and in cases specifically provided for by the Tax Code of the Russian Federation, the transfer of ownership of goods by one person to another on a free basis.

So, the sale of goods is the fact of transfer of ownership of goods from one person to another person. Therefore, in order for the sale of goods by a specific organization to be recognized as a sale for tax purposes, this organization must be the owner of the valuables being sold, since only the person to whom it belongs can transfer ownership of the thing. Consequently, operations for the sale of goods carried out by a commission agent, attorney or agent are not the sale of these goods for tax purposes, since the owner of this property as their seller is, respectively, the principal, principal or principal. It is for the principal, principal or principal that the fact of transfer of ownership of goods to the buyer (when the buyer purchases them from a commission agent, attorney or agent) will be the sale of these goods for tax purposes.

Thus, for a commission agent, attorney or agent, the sale of goods or the conclusion of other transactions in the interests of the principal, principal or principal for tax purposes is the sale of services, that is, an activity whose results do not have material expression, are sold and consumed in the process of carrying out this activity.

Hence, the amount of sales turnover (that is, the VAT tax base) of a commission agent, attorney or agent is not the price of sale or purchase of goods of the principal, principal or principal, but only the amount of remuneration received for performing services. This provision is determined by paragraph 1 of Article 156 of the Tax Code of the Russian Federation, according to which taxpayers, when carrying out business activities in the interests of another person on the basis of agency agreements, commission agreements or agency agreements, determine the tax base as the amount of income received by them in the form of remunerations (any other income) in the performance of any of the above agreements.

This provision of the Tax Code of the Russian Federation is of decisive importance not only for the purposes of paying VAT directly on turnover on the sale of services of a commission agent, agent or attorney, but also for qualifying for tax purposes all cash flows within the framework of the execution of the contracts in question.

This is especially important when the principal, principal, or principal reimburses in advance the costs of, respectively, the commission agent, attorney, or agent under the contract. According to subparagraph 1 of paragraph 1 of Article 162 of the Tax Code of the Russian Federation, the tax base for VAT is determined taking into account the amounts of advance or other payments received for the upcoming supply of goods, performance of work or provision of services.

When executing an agreement, a commission agent, attorney or agent sells services for VAT purposes, and according to paragraph 1 of Article 156 of the Tax Code, the turnover for the sale of services in the implementation of these contracts for the agent, attorney or commission agent is the amount of remuneration. Thus, of all amounts received from the principal, principal or principal, only the amount of remuneration paid in advance is considered an advance payment subject to VAT. However, all other funds transferred by the principal, principal or principal to the accounts of the commission agent, attorney or agent as part of the execution of relevant contracts for tax purposes are considered as financing the costs of the transaction, and these organizations are not subject to VAT.

The agent prepares a work report

A report is a mandatory document with which the agent informs the principal about the work done. We recommend that you define the following conditions in advance:

• report form - usually it is drawn up as a separate document;
• information that the agent includes in the report. For example, what kind of work the agent performed (list of services provided, list of goods sold, etc.) and how much money he spent on it. We recommend that the report also state the amount of the agent’s remuneration;
• The deadline for sending the report is after each transaction or for a period (for example, once a month).

The principal sends comments on the report within 30 days, unless another period is specified in the agreement. Later you won’t be able to make changes and you will have to pay the agent according to the report.

This is not all that can be said about agency agreements. We have planned several more articles about how the agent and the principal pay taxes under different interaction schemes.

Agreement for the provision of real estate services

AGREEMENT for the provision of real estate services No.

g.
"" g.

in the person acting on the basis, hereinafter referred to as the “
Contractor
”, on the one hand, and in the person acting on the basis, hereinafter referred to as the “
Customer
”, on the other hand, hereinafter referred to as the “
Parties
”, have entered into this agreement, hereinafter "Agreement" as follows:

SUBJECT OF THE AGREEMENT

1.1. The Customer instructs, and the Contractor assumes obligations to provide search services for a real estate object (hereinafter referred to as the Property), for the purpose of its use by the Customer on the basis of a lease, sublease, joint activity, cooperation, custody, etc., hereinafter referred to as the Agreement Rentals.

1.2. The Customer makes the following initial requirements for the Object:

• Location: ;
• Profile: ;
• Square: ;
• Price: (per square meter per year);
• Floor: ;
• Parking: ;
• Number of telephones: ;
• Type of contract: .

1.3. During the execution of the Contract, the Customer has the right to change the initial requirements for the Object in written or oral form.

THE CONTRACTOR IS RESPONSIBLE

2.1. Conduct a search for Objects in accordance with the Customer's requirements and offer the found options to the Customer.

2.2. Organize an inspection by the Customer of those Objects that he selects from among those proposed by the Contractor. All Objects inspected by the Customer are included in the Inspection Sheet (Appendix No. 1), which is an integral part of the Agreement.

2.3. Be present at the negotiations on the conclusion of the Lease Agreement between the owner of the Property and the Customer.

2.3.1. Provide the Customer with information about the progress of fulfillment of the terms of the Agreement.

2.4. The Contractor has the right to involve third parties in fulfilling the Customer’s instructions, paying for their services independently.

THE CUSTOMER IS RESPONSIBLE

3.1. Pay for the Contractor's services in accordance with the terms of the Agreement.

3.2. Until the Contractor fulfills its obligations under the Agreement, enter into contact with the owners of Objects or representatives of the owners of Objects found by the Contractor only in the presence of the Contractor, or with the consent of the Contractor.

3.3. Record inspected Objects in the View Sheet.

3.4. Do not transfer information about the Objects received from the Contractor to third parties.

3.5. Provide the Contractor with complete information about contacts with the owners of the Objects found by the Contractor, or representatives of the owners of the Objects, if such took place without the presence of the Contractor.

PROCEDURE FOR ACCEPTANCE AND SUBMISSION OF WORK

4.1. The moment the Contractor fulfills its obligations under the Agreement is the moment of occurrence of the first event listed below:

4.1.1. Conclusion by the Customer of the Lease Agreement for the Object, its part or other premises in the same building indicated in the Viewing Sheet.

4.1.2 Beginning of actual use of the Object by the Customer. By actual use of the Facility, the Parties understand the physical presence of the Customer (his employees) on the territory of the Facility for more than business days.

4.2. The Customer recognizes the Contractor's obligations as fulfilled also if any of the events listed in clause 4.1 of the Agreement occurred in relation to a person affiliated with the Customer or for whom the Customer is an affiliate. Affiliation of persons, both individuals and legal entities, is interpreted in accordance with the legislation of the Russian Federation.

4.3. Acceptance of the Contractor's services is carried out by signing the Certificate of Acceptance and Delivery of Services by the Customer. The Customer undertakes to sign the Certificate no later than within working days from the moment the Contractor fulfills its obligations under the Agreement established in clause 4.1 of the Agreement, or provides a written reasoned refusal.

4.4. If the Customer fails to sign the Certificate of Acceptance and Delivery of Services or fails to provide a written reasoned refusal to sign the Certificate within the period established by the Agreement, the Contractor’s services are considered accepted by the Customer without any comments, and the Certificate signed by the Contractor unilaterally is the basis for settlements under the Agreement.

PAYMENT FOR CONTRACTOR SERVICES

5.1. The cost of the Contractor's services under the Agreement is agreed upon by the Parties for each proposed Object separately and is indicated in the View Sheet, drawn up as Appendix No. 1 to the Agreement, before inspecting the Object.

5.2. The Customer pays for the Contractor's services within banking days from the moment the Contractor fulfills its obligations under the Agreement.

5.3. In case of late payment, the Contractor has the right to collect a fine from the Customer at the rate of % of the cost of the Contractor's services under the Agreement for each day of delay.

ADDITIONAL TERMS

6.1. All disputes under the Agreement are resolved primarily through negotiations, and in the event of failure to reach agreement during negotiations, in accordance with the current legislation of the Russian Federation.

6.2. The Contractor provides expert support for the transaction when the Parties sign a separate agreement on the provision of real estate services.

6.3. The Contractor guarantees the correct execution of the Lease Agreement only if the Parties sign a separate agreement on the provision of real estate services.

6.4. If, within months from the date of signing the Lease Agreement for the areas selected by the Contractor, the Customer enters into a Lease Agreement for additional areas in this premises, he is obliged to pay the Contractor a commission for additional areas under the terms of paragraphs. 5.1, 5.2 Agreements.

ENTRY INTO FORCE AND DURATION OF THE AGREEMENT

7.1. The Agreement comes into force from the moment it is signed by the Parties.

7.2. The Agreement is valid for six months from the moment it is signed by the Parties or until the Parties sign the Certificate of Acceptance and Delivery of Services. This agreement is drawn up in two copies having equal legal force, one copy for each of the Parties.

LEGAL ADDRESSES AND BANK DETAILS OF THE PARTIES

Executor

• Legal address:
• Mailing address:
• Phone fax:
• INN/KPP:
• Checking account:
• Bank:
• Correspondent account:
• BIC:
• Signature:

Customer

• Legal address:
• Mailing address:
• Phone fax:
• INN/KPP:
• Checking account:
• Bank:
• Correspondent account:
• BIC:
• Signature: