Tax treatment of refunds to consumers through an online application, due to transactions with partner businesses

According to decision ΔΕΑΦ 1133932 ΕΞ 2016, transactions via electronic applications, where sales of certain businesses are promoted through informing website visitors about the ‘discounts’ they can receive from businesses – websites, which pay money at regular intervals into the accounts of customers – users who are registered – certified on those websites, on the one hand do not constitute income, provided that they do not fall under any of the income categories of Article 7 of the Income Tax Code; on the other hand, the refunds of these sums of money must be deducted from the total consumer expenditure incurred by natural persons taxpayers and corresponding to the required receipts amount presented, in order to reduce income tax.

Specifically, money corresponding to each sale is paid, as a refund, into the bank account of each consumer. For the above services provided to commercial businesses by online application companies, they receive as remuneration a commission from the partner businesses on the transactions they handle and then part of that commission is paid to the final consumers as a refund for the purchases they made.

In view of the above and in accordance with what was stated in paragraph 3 of Chapter A of the present by the Directorate for the Application of Direct Taxation, it follows that, for documenting the transactions in question, a supporting document is issued such as, for example, a ‘title of acquisition’, expense receipt etc. by the entity managing the refund website.

This supporting document includes the particulars of the contracting parties, as well as the transaction details, as laid down by the provisions of paragraph 10 of Article 8 of Law 4308/2014 and is issued at the time laid down by the relevant provisions of Article 11 of the same law, as clarified by point d’ of paragraph 11.2.10 of circular POL.1003/31.12.2014, as in force.

Alternatively, instead of issuing a special supporting document, as above, for each of the final consumers receiving the granted discount, a list may be drawn up, which will include the aforementioned details. In the event that the details of the private consumer counterparties are not known to the entity managing the website, proof of the transaction (refund of sums of money) should arise by any suitable means, such as, for example, from the bank account number (IBAN) of the private consumers granted for the refund of sums of money.