Deduct paid commissions
December 19, 2021 | 35,00 EUR | answered by Steuerberater Knut Christiansen
Hello,
I have a subsidiary company that rents and sells string instruments and accessories.
My marketing strategy is affiliate marketing. Affiliates promote my products and receive a commission for any sales they generate. They do not have an employment contract with me, they are self-employed and not my employees. However, I have entered into an affiliate agreement with them (see attachment).
Can the commission I pay them be deducted from taxable income (as advertising expenses)?
How should I record the payments?
Do I need to
A. issue a payment receipt and send it to the affiliates or
B. do the affiliates need to invoice me?
What is the correct way to ensure that I can properly deduct the commission payments? And under which category should these expenses be classified?
Attachment point 9 is my doubt.
I hope the question is clear and understandable...
Thank you.
Good evening,
Thank you for using frag-einen.com!
I would like to provide the following feedback on your question.
Basically, expenses that you pay to the respective affiliate partner are considered advertising costs for you. You can claim these as business expenses and thus reduce your taxable profit.
Both billing methods you have in mind are possible and permissible. You can either settle accounts by credit note or have the business partner issue an invoice. If you issue credit notes, please have the business partner confirm whether they are possibly a small business owner according to § 19 UStG or if they are subject to VAT in Germany. Because if you issue credit notes, they must also include information about VAT. For you, the VAT included is only deductible as input tax if the credit note includes all the required invoice information and especially if the VAT is correctly stated.
I hope this answers your question, if not feel free to ask a follow-up question at no cost.
Please note that this forum cannot replace personal advice. Missing or incomplete information about the facts can change the legal outcome.
Best regards,
Knut Christiansen
Tax consultant
