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How is tax calculated when goods are sold at cost price – based on the market value or the actual sale price?
How is tax calculated when goods are sold at cost price – based on the market value or the actual sale price?
We inform you that according to Article 143 of the Tax Code, the value of assets includes expenses incurred for their acquisition, transportation, production, construction, installation, and assembly, as well as other expenses that increase the value of assets, except for expenses that the taxpayer has the right to deduct from income and the increase in the value of fixed assets resulting from revaluation (positive difference from revaluation). These expenses are deducted from income in accordance with Article 108 of the Tax Code.
Please note that within 30 days, the price levels applied by taxpayers to goods (works, services) of the same characteristics or type, taking into account the requirements of Article 14.6.1 of this Code and losses due to natural shrinkage established by the relevant executive authority, if they differ by more than 10% in wholesale trade, 20% in construction and manufacturing, or 30% in other sectors (upwards or downwards) from the market prices for similar goods (works, services), the market price is applied.
Additionally, when determining the market prices of goods (works, services), the following factors affecting prices are considered:
Volume of delivered goods (performed works, provided services) (batch size);
Terms of contract execution and payment conditions;
Changes in demand and supply for goods (works, services), including seasonal variations in consumer demand;
Country of origin of goods, place of purchase or provision;
Delivery conditions of goods (works, services);
Quality and other consumer characteristics of goods;
Introduction of new, unique goods (works, services) to the market, or presenting goods (works, services) in a new market, including samples for consumer familiarization due to marketing policy;
When determining market prices for works and services, including repair, construction, installation works, transport, rental, education, medical services, and other sectors, the region where the work is performed or services are provided, quality indicators, and other conditions affecting prices are taken into account.
If the price level applied by taxpayers to the provided goods (works, services) is more than 30% below the market price determined according to the Tax Code, taxes are calculated based on the market price; if higher, they are calculated based on the actual sales price.
We inform you that according to Article 143 of the Tax Code, the value of assets includes expenses incurred for their acquisition, transportation, production, construction, installation, and assembly, as well as other expenses that increase the value of assets, except for expenses that the taxpayer has the right to deduct from income and the increase in the value of fixed assets resulting from revaluation (positive difference from revaluation). These expenses are deducted from income in accordance with Article 108 of the Tax Code.
Please note that within 30 days, the price levels applied by taxpayers to goods (works, services) of the same characteristics or type, taking into account the requirements of Article 14.6.1 of this Code and losses due to natural shrinkage established by the relevant executive authority, if they differ by more than 10% in wholesale trade, 20% in construction and manufacturing, or 30% in other sectors (upwards or downwards) from the market prices for similar goods (works, services), the market price is applied.
Additionally, when determining the market prices of goods (works, services), the following factors affecting prices are considered:
Volume of delivered goods (performed works, provided services) (batch size);
Terms of contract execution and payment conditions;
Changes in demand and supply for goods (works, services), including seasonal variations in consumer demand;
Country of origin of goods, place of purchase or provision;
Delivery conditions of goods (works, services);
Quality and other consumer characteristics of goods;
Introduction of new, unique goods (works, services) to the market, or presenting goods (works, services) in a new market, including samples for consumer familiarization due to marketing policy;
When determining market prices for works and services, including repair, construction, installation works, transport, rental, education, medical services, and other sectors, the region where the work is performed or services are provided, quality indicators, and other conditions affecting prices are taken into account.
If the price level applied by taxpayers to the provided goods (works, services) is more than 30% below the market price determined according to the Tax Code, taxes are calculated based on the market price; if higher, they are calculated based on the actual sales price.