Gift vouchers based on volume of sales to loyal customers of the company

According to the provisions of Law no. 165/2018 on the issue of valuable tickets, gift vouchers can be granted to other categories of beneficiaries, not just occasionally, to employees, for social expenses.

Thus, this type of gift vouchers can also be granted for marketing campaigns, market research, promotion on existing or new markets, protocol or advertising and advertising expenses.

Under the provisions of GOVERNMENT DECREE (HG) NO 1045/2018 on Implement Rules, employers may use gift vouchers for marketing campaigns, market research, promotion on existing or new markets for advertising and advertising expenses, up to the amount to cover the nominal value of of these vouchers, provided in their own budgets, approved according to the law, in distinct expenditure positions

We mention that all the Norms approved by Government Decree (HG) no. 1045 provide that employers, together with legally constituted trade unions or, where no union is established, with the employees’ representatives, lay down collective labor agreements or internal regulations, as the case may be, on the issue of valuables, providing at least the following:

  • the number of employees in the unit who can receive tickets and the nominal value granted, taking into account the employer’s own financial possibilities
  • categories of employees receiving tickets;
  • the concrete establishment of the activities, destinations and events that are included in social expenses, for which the employees will receive gift vouchers, nurseries and cultural vouchers, as the case may be, and which will be subject to commercial service contracts with the issuing units;

In addition, each marketing or advertising action is based on a regulation for the organization and conduct of these actions approved by lawyers. The marketing or advertising action rules will include, among other things: organizers and campaign beneficiaries, duration and scope of the campaign, campaign mechanism, value of gift vouchers to be granted, and grant method.

Thus, in order to stimulate sales, the distributor can offer both goods that are part of the products marketed by the respective company, as well as goods of another nature, purchased specifically for this purpose (in our case – gift vouchers).

Therefore, for goods provided free of charge within the sales incentive campaign, an accompanying notice is issued in which:

  • the customer’s name and surname, including identification data,
  • the quantity and value of the ticket provided
  • “Non-invoiced Sales Promotion Campaign under Regulation … / Date

This supporting document confirms the handover of the gift voucher to the customer, and the discharge of the ticket administration and the recording of the sales stimulus expenses. Thus, the value of the gift vouchers handed over in the sales promotion campaign is a deductible expense for the sales promoter (it is recorded in the debit of account 623 – distinct analytics, for example “sales stimulation”).

As regards VAT, the possibility of offering free of charge goods purchased from third parties for this purpose, without interfering with the obligation to adjust deductible VAT deductible or VAT collection for operations assimilated to the supply of goods, falls within the scope of Article 270, Par. (8)Letter (b) of the Fiscal Code, as follows: “It shall not constitute the supply of goods within the meaning of paragraph 1: … (b) the supply of goods free of charge for the purpose of advertising or for the purpose of stimulating sales or, more generally, for purposes relating to the pursuit of economic activity, under the conditions established by methodological norms

For the purchased goods, the exercise of the right to deduct VAT, a matter expressly regulated by art. 297 (5), stipulating that the taxable person has the right to deduct the tax and for the cases provided by art. 270 par. (8), if the operation does not contravene the provisions of paragraph (4). Alin. (4) refers to the right to deduct the amount of VAT deductible for purchases made for the purpose of carrying out taxable transactions and / or exempt from VAT with the right to deduct (exports, intra-Community supplies).

The conditions for granting the goods free of charge to the buyers are expressly regulated by GOVERNMENT DECREE (HG) NO no. 1 of 2016 for the approval of the Methodological Norms for the application of Law no. 227/2015 regarding the Fiscal Code at point 7 para. (10) lit. a) for the application of the provisions of art. 270 par. (8) lit. b) of the Fiscal Code:”(10) For the purposes of Article 270 (8) (b) of the Fiscal Code:

a) includes in the category of goods granted free of charge for the purpose of sales promotion the goods which are produced by the taxable person for sale or are usually marketed by the taxable person, granted free of charge to the client, only to the extent that they are goods the same as those that are, were or will be delivered to the customer. When goods provided free of charge in order to stimulate sales are not produced by the taxable person and / or are not goods normally traded by the taxable person and / or are not the same as those which are or have been delivered to the customer, they shall not be deemed to be delivery of goods if:

1. it can be objectively proved that they can be used by the customer in relation to the goods / services he has acquired from that taxable person; or

2. the goods / services are delivered to the final consumer and the value of the goods granted free of charge is less than the value of the goods / services provided to him; “

It is important to underline that the free provision of goods to each customer in the sales promotion campaign is an operation directly related to sales stimulation, in which case the VAT deduction is not adjusted and the respective expense is deductible in the calculation of the tax result.