Varlamova Victoria Vladimirovna,
chief expert-consultant of the company PRAVOVEST
Participation in international exhibitions is good way for many Russian organizations to make themselves known about their products, establish contacts with foreign partners, and increase the organization’s rating. To do this, the organization, as a rule, uses the services of foreign partners, sends its representatives on business trips abroad, bears the costs of creating advertising stands, distributing advertising products etc. Participation in an international exhibition is not cheap, so it is necessary to take into account all the nuances of taxation of such expenses.
Thus, expenses for participation in the exhibition are not standardized and are fully taken into account when calculating income tax. The economic justification of expenses for participation in the exhibition, in addition to primary documents and documents drawn up in accordance with the business customs of the foreign state in whose territory the exhibition was held (contracts, travel documents, hotel bills, certificates of work performed, etc.), must be confirmed by internal documents organizations. Such documents may be: an order from the manager on making a decision on participation in the exhibition, an estimate of costs for participation in the exhibition, a report on the results of participation in the exhibition, etc.
We conclude agreements with foreign partners
As a rule, preparation for an exhibition is entrusted to a specialized company. If an organization does not have a permanent exhibition exposition, then it is easier to rent exhibition equipment. This service is often provided by exhibition organizers (a foreign company).
Settlements between a foreign company and an exhibition participant are usually made in foreign currency, sometimes in Russian rubles - when working with partners from neighboring countries. In accordance with paragraph 10 of Art. 272 of the Tax Code of the Russian Federation, expenses expressed in foreign currency are recalculated for tax purposes into rubles at the official rate established by the Central Bank Russian Federation at the date of recognition of the relevant expense.
VAT. If Russian organization uses the services of foreign partners, then before concluding an agreement, it is necessary to determine the place for the implementation of such services and work in accordance with Russian legislation. When, on the basis of Art. 148 of the Tax Code of the Russian Federation, the place of sale is recognized as the territory of the Russian Federation, the Russian organization is assigned the duties of a tax agent for VAT, and the agreement with the foreign company should stipulate the amount of tax that will be withheld when transferring it to it. cash.
By general rule The place of sale of works (services) is recognized as the place of activity of the seller, which is determined on the basis state registration. The exception is the work and services provided for in paragraphs. 1-4 p. 1 tbsp. 148 Tax Code of the Russian Federation.
The tax authorities also agree with this point of view. They believe that the obligations of tax agents when purchasing services provided by a foreign company arise for an exhibition participant only if such services do not fall under the list of exceptions. In other words, if in the contract for the provision of services for organizing an exhibition, a foreign partner identifies in a separate line the types and cost of services provided, then the place of sale of each service is determined separately.
If the organization has decided to agree with the opinion of the Ministry of Finance of the Russian Federation or, in accordance with the point of view of the tax service, has decided to determine the place of sale of each service named separately in the contract, and any service is recognized as provided on the territory of the Russian Federation, then the amount must be specified in the contract with the foreign partner VAT. Simultaneously with the transfer of money to the exhibition organizer, the Russian organization is obliged to withhold and pay tax to the budget. The tax base of the tax agent in this case is the amount of income from the sale of services, including VAT. The tax base is recalculated into rubles at the rate of the Central Bank of the Russian Federation on the date of transfer of funds to a foreign person (including if these expenses are advance or other payments) 16. Taxation is carried out at the “reverse rate” 18/118 17. VAT withheld and paid can be deducted after the provision of services (performance of work) by a foreign partner, provided that such services (work) were purchased by the VAT taxpayer for taxable transactions.
Very often, foreign partners do not want to reflect Russian VAT in the contract or indicate in the contracts “their” value added tax, which the exhibition participant must transfer to them in full. What should an organization do if it is afraid of claims from tax authorities?
According to the Ministry of Finance and the Tax Service, if VAT is not taken into account in the agreement, then the Russian tax agent, when calculating value added tax, should apply a tax rate of 18% to the cost of services (excluding Russian value added tax) and pay tax to the budget for own funds account. The VAT paid cannot be deducted, since it was not withheld from the funds to be transferred to a foreign person, but, oddly enough, it is possible to reduce taxable profit by this amount. The Ministry of Finance allowed such VAT to be taken into account as part of other expenses based on paragraphs. 1 clause 1 art. 264 of the Tax Code of the Russian Federation as amounts of taxes accrued in the manner established by the legislation of the Russian Federation.
These explanations are puzzling. If VAT cannot be deducted because it is not withheld in accordance with the requirements of the Tax Code, how can such a tax be recognized as calculated in accordance with the law? Nowhere in the Tax Code of the Russian Federation will we find rules obliging a tax agent to pay VAT at his own expense when purchasing work and services from foreign partners. Collection of tax at the expense of the tax agent also contradicts the provisions of Art. 8 Tax Code of the Russian Federation. This is confirmed by judicial practice.
However, despite the fact that the point of view of the Ministry of Finance, indicated in Letters dated July 18, 2006 No. 03-03--04/2/175, dated March 24, 2006 No. 03--04--03/07, in the opinion of the author, is not complies with legal requirements, organizations can use it. In the event of claims from the tax authorities, organizations will be exempt from liability (fine), and since 2007, even from paying penalties.
We send our representatives to the exhibition
No one knows better than employees about the benefits of goods, works or services. Therefore, it is their organization that sends them on a business trip to the exhibition.
Business travel expenses are recognized on the basis of documents drawn up in accordance with the legislation of the Russian Federation, or documents drawn up in accordance with business customs applied in the foreign state in whose territory the corresponding expenses were incurred, and (or) documents indirectly confirming the expenses incurred (in including a business trip order, travel documents, a report on the work performed in accordance with the contract) 26.
Travel and accommodation expenses can be taken into account in full based on supporting documents.
It often happens that Belarusian, Ukrainian or Kazakh partners indicate the amount of value added tax in invoices or other documents. At the same time, organizations should understand that for Russian taxpayers “foreign” VAT is an indirect tax paid in accordance with the legislation of a foreign state, and, in the author’s opinion, should be included in the cost of services purchased from foreign companies. However, the Ministry of Finance of the Russian Federation proposes to take into account such tax as a separate amount as part of other expenses based on paragraphs. 49 clause 1 art. 264 Tax Code of the Russian Federation. Only VAT presented on the territory of the Russian Federation will be deducted.
To calculate income tax, daily allowances paid to employees while on a business trip are recognized as expenses within the limits established by Decree of the Government of the Russian Federation No. 93 29. For the purposes of calculating the unified social tax, contributions to the Pension Fund and personal income tax, no official norms are defined by law. Previously, the tax authorities and the Ministry of Finance of the Russian Federation insisted that, in order to calculate “salary” taxes, organizations should be guided by Order of the Ministry of Finance of the Russian Federation dated August 2, 2004 No. 64n “On establishing the amount of daily allowances and maximum rates for reimbursement of expenses for renting residential premises for short-term business trips in foreign countries » 30. However, by Order of the Ministry of Finance of the Russian Federation dated July 12, 2006 No. 92n, changes were made to this document, clarifying that it is applied only by budgetary organizations.
In accordance with Art. 168 of the Labor Code of the Russian Federation, the procedure and amount of compensation for business travel expenses is established by employers. This means, in the author’s opinion, daily allowances are not subject to personal income tax and unified social tax within the limits of the norms defined in the organization by a collective agreement or local regulations.
A similar point of view was expressed in the Decision of the Supreme Arbitration Court of the Russian Federation dated January 26, 2005 No. 16141/04 and was recently supported by the tax service.
Therefore, the organization needs to approve the Regulations on the payment of travel expenses and establish the appropriate compensation standards in it. If it is convenient for an organization to be guided by the standards defined for income tax, then in such a document it can be indicated that compensation will be paid to employees for the time they are on a business trip according to the standards established by Decree of the Government of the Russian Federation No. 93.
The date of recognition of travel expenses using the accrual method will be the date of approval of the advance report.
But one can argue with this, because neither Art. 264 of the Tax Code of the Russian Federation, nor other norms current legislation do not disclose the list of costs included in the costs of participation in exhibitions, fairs, and expositions.
Consequently, when classifying costs and determining the possibility of classifying them as expenses that reduce the tax base for income tax, it is advisable to be guided by the actual use of certain items for the specified purposes. The same opinion was expressed by the Federal Antimonopoly Service of the Volga-Vyatka District dated January 13, 2005 No. A43--1729/2004--32-152. To substantiate this point of view, it is necessary that the costs of distributing souvenirs be included in the cost estimate for participation in the exhibition. At the same time, when reflecting the costs of distribution of these products in full, claims from the tax authorities cannot be excluded.
In times of crisis, increased competition in industrial markets forces companies to look for new markets. Often such a market is located abroad. At the same time, in order to find consumers outside the borders of one’s own country, it is necessary to take part in foreign exhibition events, conferences, etc.
Foreign exhibitions are not much different from exhibitions in Russia. However, the exhibitor will have to take care of the availability of the required number of translators or initially recruit employees into the team of stand staff with knowledge of the language. Difficulties may also arise with demonstration equipment - when crossing the border, the declaration indicates the purpose of transporting machinery and equipment, so it will not be possible to sell such equipment directly at the exhibition.
Neglect of business etiquette on the part of exhibitors is one of the most common mistakes that lead to failure of participation in an exhibition. In this case, the fault may lie both with the organizer of specialist training during the preparatory period, and with the employees themselves, who do not ignore these rules for various reasons.
First you need to thoroughly study with the stand staff business etiquette And national characteristics communications specific to the country in which the exhibition is held. Such nuances relate to greetings, exchanges business cards, presentation of promotional souvenirs, etc. In most cases this is not a problem.
As for the booth workers themselves, even before the exhibition it is necessary to separately stipulate such things as unacceptable postures, position of arms, legs - some things that are common in everyday behavior can scare off potential visitors to the stand, especially for young people who are characterized by a cheeky demeanor.
The list of the most common mistakes in the behavior of booth attendants includes eating in the workplace. Each employee should have breaks for rest and food. Often, stand exhibitors limit themselves to drinks at the stand, but at the same time leave cups in a visible place - the stand instantly turns into a hybrid of an office and a kitchen, which also does not add solidity to either the stand or the brand. There should be no foreign odors, garbage, clothes, bags, etc. at the stand. You should also avoid extraneous conversations - all attention should be focused on the target visitors. Ideally, the stand should have a fenced-off area for negotiations with important clients - in order to discuss the terms of a business deal, it is worth creating the necessary surroundings for this and taking care of maintaining trade secrets.
Ensuring that all requirements for stand staff are met is only possible through constant monitoring. That is why it is necessary to appoint a person who will manage the exposition; during his absence from the stand, his duties should be performed by appointed deputies. Only personal responsibility and a clear distribution of responsibilities will ensure the required level of work of employees at the stand.
There is a widespread opinion that there must be a beautiful woman at the stand - this attracts the attention of men to the stand. This statement is very controversial, since attention is attracted by the pretty representative of the fairer sex. In any case, all employees at the stand must be highly qualified and have a decent level of knowledge of a foreign language. Alternatively, technical specialists who do not speak foreign language must be accompanied by qualified translators. By the way, it’s worth looking for translators with knowledge of the exhibition’s topics at the exhibition event itself. An interpreter without knowledge of technical terms at an exhibition is not best solution, since such lack of professionalism reduces the level of the company in the eyes of visitors to the stand.
As practice shows, the organization international exhibitions and winning a foreign market share is no less difficult than promoting goods and competing in the Russian industrial market. That is why, in order to successfully hold an exhibition and find customers, you should carefully consider your competitive advantages, which will be of interest to foreign customers.
The VTV company has been providing services for organizing participation in international exhibitions for many years. With our help, your company's personnel will be able to take part in events held in various countries around the world. We are effective assistant in developing international relations and establishing relationships with new partners.
Participation of a company in an international exhibition is one of the ways to tell the world about itself, to present own products, find profitable suppliers of materials. At such exhibitions they exchange experiences, present innovative technologies. Doing business is a complex, multifaceted process, and we offer you to take advantage of one of the most effective tools for its development.
VTV company specialists are ready to offer comprehensive services, which include:
· willingness to select international exhibitions in accordance with the specialization profile of the customer’s company,
· submitting an application for participation and agreeing with the organizers on all issues,
· registration of visas and other documents,
· booking tickets for convenient times and dates,
· booking hotel rooms,
· organizing transfers, meals, excursion programs, etc.
By contacting VTV, you can rest assured that everything will be organized in the best possible way. You can deal with organizational issues yourself, but believe me, this will take a lot of time. We suggest not to be distracted from professional activity and entrust them to experienced company specialists who have been working in this field for many years.
Our specialists work closely with carriers and hotels. This allows them to truly provide favorable prices their services. We make sure that our clients are as comfortable as possible when traveling and think through everything down to the smallest detail. We know very well where it will be more comfortable to stay, and we can organize any necessary transfer. We will offer meals in accordance with customer preferences.
An important factor that our company’s specialists always take into account in their work is the budget allocated by the customer for participation in an international exhibition. Our employees will not only help you take part in an event of interest, but will also create conditions for saving money.
To participate in an international exhibition planned in a certain country, you simply need to contact VTV employees. We have been organizing such participations for many years and have managed to accumulate significant experience, allowing us not to miss a single nuance. Our customers feel comfortable abroad, which allows them to work effectively and solve all the assigned tasks within the framework of the exhibition.
Any trip to an exhibition requires a lot of preparation. Only experienced specialists will be able to produce it at the highest level. With the help of VTV, you can visit any exhibition, feel comfortable and not be distracted by anything from your immediate professional activities. We guarantee a personal approach and comprehensive consideration of their interests to all clients. Contact experienced professionals if you are interested in comprehensive support and the absence of force majeure circumstances!
An exhibition is usually considered as a short-term event, usually held periodically in the same place, during which a significant number of firms (exhibitors) from different countries, using samples (exhibits), demonstrate new products, ideas or services from one or more industries to inform potential consumers about your company and its products to promote sales. An international fair (trade fair or fair-exhibition) is considered as a short-term event, held periodically, usually in the same place, in order to attract a significant number of firms (exhibitors) different countries one or more industries presenting samples of their goods (exhibits) for their demonstration, familiarization and conclusion of trade transactions.
The main objective of the exhibition is to demonstrate achievements in one or more areas of human activity.
At the same time, many examples can be given where an exhibition is held as a prestigious event, no different in its goals from a fair. Therefore, they usually focus not on the differences between international exhibitions and fairs, but on the general opportunities that are provided to the company through its participation in their work. Here we mean the presence of certain opportunities that are provided at international fairs and exhibitions to effectively solve marketing problems facing the company, and above all problems related to the justification of effective product and pricing policies, distribution and promotion policies in foreign markets. These tasks can be successfully solved if you carefully justify the need for participation in certain fairs and exhibitions, organize preparation and participation in their work at the proper level, and also effectively use the results obtained during fairs and exhibitions.
The main goals of participation in fairs and exhibitions may be:
creating a high product image;
intensifying the use of certain promotion policy tools;
creating a high image of the company.
Each company can participate in the work of the selected international fair or an exhibition, either as an independent exhibitor, or as part of a joint stand or exposition created by several companies.
When a company independently participates in the work of an international fair or exhibition, it creates its own stand, ensures its operation at the proper level and bears full responsibility for the final results of participation in the work of this fair or exhibition. In this case, the company, as a rule, bears all costs for preparation and participation in the exhibition or fair. Partially or fully these expenses may be reimbursed by the state. Participation in an international fair or exhibition is directly related to the creation and maintenance of the image of the state.
Of course, independent participation of a company in an international fair or exhibition is more effective. During the work of an international fair or exhibition, the exhibitor realizes all the opportunities available to him to achieve the goals previously formulated by him. To do this, he first of all uses his existing stand, and also carries out actions and activities that go beyond the stand and are necessary to ensure effective participation in a given fair or exhibition.
After the completion of each international fair or exhibition, the results of the company’s participation in its work should be summed up. First of all, it is necessary to familiarize the company's employees with the first results of participation in the fair or exhibition. In particular, it is necessary to inform about:
the number of people who visited the fair or exhibition and the changes that occurred compared to previous years;
suitability of the stand location;
validity of architectural solutions for the stand;
correct choice of exhibits;
funds spent on preparation and participation in the fair or exhibition;
conducted marketing research;
contacts with visitors of a fair or exhibition;
working with funds mass media;
messages in the media about the company’s participation in a fair or exhibition, etc.
Participation in the work of each specific international fair or exhibition does not always allow achieving the stated goals. The fact that the results of participation in a fair or exhibition turned out to be worse than expected is a consequence of a number of reasons:
vaguely formulated goals for the company’s participation in the fair or exhibition;
poorly presented and designed company exposition;
lack of awareness of potential visitors to a fair or exhibition about the company’s participation in its work;
lack of training of company personnel;
not taking full advantage of the opportunities to conduct marketing research on existing problems in product promotion;
an incompletely justified analysis of the company’s participation in the work of each specific fair or exhibition.
From the above reasons for failure, it is clear that the success of a company in operating an international fair or exhibition depends not only on the employees directly involved in their work, but also on the work of the company as a whole and its top management.
