Participation of the company in the international exhibition. Business etiquette at foreign exhibitions
Varlamova Victoria Vladimirovna,
chief expert-consultant of PRAVOVEST company
Participation in international exhibitions is good way for many Russian organizations to declare themselves, their products, establish contacts with foreign partners, improve the rating of the organization. To do this, the organization, as a rule, uses the services of foreign partners, sends its representatives on a business trip abroad, bears the cost of creating advertising stands, distributing promotional products, etc. Participation in international exhibition is expensive, so it is necessary to take into account all the nuances of the taxation of such expenses.
Thus, the costs of participation in the exhibition are non-standardized and are fully taken into account when calculating income tax. The economic feasibility 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 on 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 can be: an order of the head on making a decision on participation in the exhibition, an estimate of the costs of participation in the exhibition, a report on the results of participation in the exhibition, etc.
We conclude contracts with foreign partners
As a rule, the preparation for the exhibition is entrusted to a specialized company. If the organization does not have a permanent exhibition exposition, then it is easier to rent exhibition equipment. This service is often provided by exhibition organizers (foreign firm).
Settlements between a foreign firm and an exhibitor 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 denominated in foreign currency are converted into rubles for tax purposes at the official rate established by the Central Bank Russian Federation at the date the related expense is recognized.
VAT. If a 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 works in accordance with Russian law. When, on the basis of Art. 148 of the Tax Code of the Russian Federation, the territory of the Russian Federation is recognized as the place of sale, the Russian organization is entrusted with the duties of a tax agent for VAT, and in an agreement with a foreign company it is necessary to specify the amount of tax that will be withheld when transferring to it Money.
By general rule the place of sale of works (services) is the place of the seller's activities, which is determined on the basis of state registration. The exception is the work and services provided for in paragraphs. 1-4 p. 1 art. 148 of the Tax Code of the Russian Federation.
I agree with this point of view and tax authorities. They believe that the duties of tax agents when purchasing services provided by foreign company, arise for the exhibitor only if such services do not fall under the list of exceptions. In other words, if in a contract for the provision of services for organizing an exhibition, a foreign partner singles out the types and cost of the services provided in a separate line, 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 in the contract separately, and any service is recognized as provided on the territory of the Russian Federation, then the contract with a foreign partner must specify the amount VAT. Simultaneously with the transfer of money to the organizer of the exhibition, the Russian organization is obliged to withhold and pay tax to the budget. The tax base for 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 exchange 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 . Withheld and paid VAT can be deducted after the provision of services (performance of work) by a foreign partner, provided that such services (work) are acquired 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 own” value added tax, which the exhibitor must transfer to them in full. What should an organization do if it fears claims from the tax authorities?
According to the Ministry of Finance and the tax service, if VAT is not included in the agreement, then the Russian tax agent, when calculating value added tax, should apply the 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 paid VAT cannot be deducted, since it was not withheld from the funds to be transferred to a foreign person, and, oddly enough, it is possible to reduce taxable profit by this amount. The Ministry of Finance allowed such VAT to be included in other expenses on the basis of paragraphs. 1 p. 1 art. 264 of the Tax Code of the Russian Federation as the amount of taxes accrued in accordance with the procedure established by the legislation of the Russian Federation.
These explanations are confusing. If VAT cannot be deducted because it is not withheld in accordance with the requirements of the Tax Code, how can such tax be recognized as calculated in accordance with the law? Nowhere in the Tax Code of the Russian Federation can we find norms obliging a tax agent to pay VAT at his own expense when acquiring works and services from foreign partners. The collection of tax at the expense of the tax agent is also contrary to the provisions of Art. 8 of the Tax Code of the Russian Federation. This is confirmed and judicial practice.
However, despite the fact that the point of view of the Ministry of Finance, indicated in Letters No. 03-03-04/2/175 of 18.07.2006, No. 03-04-03/07 of 24.03.2006, according to the author, does not complies with the law, organizations can use it. In the event of claims from the tax authorities, organizations will be exempted from liability (fine), and since 2007 even from paying penalties.
We send our representatives to the exhibition
No one knows about the benefits of goods, works or services better employees. Therefore, it is their organization that sends them on a business trip to the exhibition.
Business trip 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 applicable in a 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 on the basis of supporting documents.
It often happens that Belarusian, Ukrainian or Kazakh partners in invoices or other documents indicate the amount of value added tax. 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 firms. However, the Ministry of Finance of the Russian Federation proposes to account for such a tax as a separate amount as part of other expenses on the basis of paragraphs. 49 paragraph 1 of Art. 264 of the Tax Code of the Russian Federation. Only VAT presented on the territory of the Russian Federation will be accepted for deduction.
For the purpose of calculating 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 UST, contributions to the PFR 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 the Order of the Ministry of Finance of the Russian Federation dated 02.08.2004 No. 64n "On establishing the amount of payment of daily allowances and maximum rates for reimbursement of expenses for renting housing for short-term business trips in foreign countries " thirty . However, by Order of the Ministry of Finance of the Russian Federation dated July 12, 2006 No. 92n, this document was amended to clarify that it is used only by budgetary organizations.
In accordance with Art. 168 of the Labor Code of the Russian Federation, the procedure and amount of compensation for travel expenses are established by employers. So, according to the author, per diems are not subject to personal income tax and unified social tax within the limits defined in the organization by a collective agreement or a local regulatory act.
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 tax service.
Therefore, the organization needs to approve the Regulations on the payment of travel expenses and establish the appropriate compensation rates in it. If it is convenient for an organization to be guided by the norms defined for income tax, then in such a document it can be indicated that compensation will be paid to employees for the time spent on a business trip in accordance with the norms established by Decree of the Government of the Russian Federation No. 93.
The date of recognition of travel expenses under 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 of the current legislation disclose the list of costs included in the costs of participation in exhibitions, fairs, expositions.
Therefore, 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 these 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 justify this point of view, it is necessary that the costs of distribution souvenir products were included in the cost estimate for participation in the exhibition. At the same time, when reflecting the costs of distributing these products in full, claims from the tax authorities are not excluded.
In a crisis, increased competition in industrial markets is forcing 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 in the stand team with knowledge of the language. Also, difficulties may arise with demonstration equipment - when crossing the border, the declaration indicates the purpose of transporting machines and machine tools, so it will not be possible to sell such equipment directly at the exhibition.
Business etiquette at foreign exhibitions
Neglect of business etiquette on the part of stand attendants is one of the most common mistakes that lead to the failure of participation in the exhibition. At the same time, the fault may lie both with the organizer of the training of specialists during the preparatory period, and with the employees themselves, who do not ignore these rules for various reasons.
To begin with, it is necessary to thoroughly study business etiquette and national features of communication with the stand attendants, which are characteristic of the country in which the exhibition is held. Such nuances relate to greetings, exchange business cards, presentation of promotional souvenirs, etc. In most cases this is not a problem.
As for the stand attendants themselves, even before the exhibition, it is necessary to separately stipulate such things as unacceptable postures, the position of arms, legs - some things familiar in everyday behavior can scare away 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 stand attendants is eating at the workplace. Every employee should have breaks for rest and food. Often, stand attendants limit themselves to drinks at the stand, but at the same time they leave cups in a prominent 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 smells, garbage, clothes, bags, etc. on the stand. Extraneous conversations should also be avoided - all attention should be focused on the target visitors. Ideally, the booth should have a fenced-off place for negotiations with important clients - in order to discuss the terms of a business transaction, it is worth creating the necessary surroundings for this and taking care of maintaining trade secrets.
It is possible to ensure the fulfillment of all requirements for stand attendants only by 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.
It is widely believed that the stand must have beautiful woman- this draws the attention of men to the stand. This statement is very controversial, since the pretty representative of the weaker sex herself attracts attention. 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 know foreign language must be accompanied by qualified interpreters. By the way, the search for translators with knowledge of the subject of the exhibition is worth looking for at the exhibition event itself. An interpreter without knowledge of technical terms at an exhibition is not the best solution because such unprofessionalism lowers the level of the company in the eyes of the stand visitors.
As practice shows, the organization of international exhibitions and gaining a share foreign market is no less difficult than the promotion of goods and competitive fight on the industrial market Russia. That is why, in order to successfully hold an exhibition and find customers, it is worth carefully considering your competitive advantages which may be of interest to foreign customers.
What is the benefit of participating in international exhibitions?
Participation in exhibitions requires serious dedication: this concerns budget planning, personnel, information and other resources.
Nevertheless, such responsible and troublesome activities justify themselves, helping to strengthen the brand, expand its influence, increase the client base and increase sales. Occupying more and more confident positions in the market of goods and services, it makes sense to take part in exhibitions of various levels: first regional, then federal, and finally international.
To date, the question of whether or not to participate in exhibitions is no longer raised. But not all companies can afford to venture on the international level of events yet.
What gives the international exhibition
Exhibition international status allows you to expand the influence of the company, find foreign investors, partners, customers. A successful performance at such an event can bring much greater benefits than a few years of fruitful work.
West or East: which direction to move
When choosing an event, a reasonable question arises: where should you direct your efforts and where to look for support? The Russian and European markets are actively interacting: the EU countries are acquiring ever closer economic ties with Russia.
A promising direction is the East - this is China, India, Turkey and other states. Economic cooperation with these countries is also growing rapidly.
To a lesser extent, Russian businessmen have contacts with Australia and the countries of the American continent. This is determined, first of all, by a significant territorial remoteness, because transport and other costs in this case will be very significant.
International exhibition costs
The cost of participating in an international exhibition is tangible for any company, even the largest and most confidently standing on its feet. Therefore, such an important event is usually planned in advance, allocating a significant part of the annual budget for this. And the point here is not only the territorial remoteness of the exhibition venue.
An international event will require more powerful legal support, .
The construction of stands and the design of the exposition also has many additional difficulties associated with the transportation, installation and dismantling of equipment. Of course, it is easier to deliver a relatively small booth and take a minimum of exposition material with you. Some companies do just that - they take only the most necessary things to the exhibition. Other exhibitors, on the contrary, strive to impress with the scale and attractiveness of the exposition, therefore they pay for the delivery of bulky structures, which is not cheap. They see a special pattern in this - the higher the status of the event, the larger and more noticeable the stand and its content should be. And it is difficult to argue with this, because in the conditions of fierce competition it is able to distinguish the company, to attract the attention of visitors.
What difficulties may arise
To participate in international exhibitions, you will inevitably need to obtain visas, go through customs, fly and deliver exhibits. In addition, it is necessary to decide in advance all organizational, legal and financial questions with the organizers of the event. Therefore, exhibiting companies need to have their own lawyers and managers to prepare for the event, or seek help from special services.
It is important to establish a working communication channel that will provide mobile and on-line communication between stand attendants and representatives of the exhibiting company.
A certain problem is the language barrier. To successfully overcome it, it is worth contacting the services professional translators. With their help, it is necessary to translate all promotional materials and documents into a foreign language. Usually translations are made into English, since it is the language of international communication. In addition, the materials are translated into the language of the state in which the exhibition is held. The participation of translators is required not only at the stage of preparation of the event, but also during its holding. Translators must certainly be included in the stand staff. It is important to select personnel who not only speak a foreign language, but also understand the specifics of work at the stand, and can also present the exhibitor in a favorable light. In addition to knowledge of the spoken language, it is necessary to understand and respect the traditions of the country with whose representatives the dialogue is planned.
Even at the stage of preparing the exhibition, attention should be paid to the rules and regulations of work that relate to foreign citizens. They may differ from the conditions applicable to representatives of their states.
Even less predictable moments may arise: for example, a different voltage in the mains, which will lead to unstable operation of the equipment. It is also worth finding out the rules in order to eliminate organizational misunderstandings. Particular attention should be paid to behavior in emergency situations - the rules for this part in different states also differ.
Thus, participation in international exhibitions is fraught with a number of difficulties for exhibitors. And this is not only a territorial remoteness and a language barrier, but also a different procedure for holding events, as well as differences in mentality. However, with systematic, purposeful and professional training, all these and other difficulties are quite surmountable. Moreover, the resonance and benefit from such events covers all costs and is compensated by numerous dividends.
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An exhibition is usually viewed as a short-term event, usually held periodically in the same place, within which a significant number of firms (exhibitors) various countries using samples (exhibits) demonstrate new products, ideas or services of one or more industries to inform potential consumers about their company and its products in order to promote sales. An international fair (trade fair or fair-exhibition) is considered as a short-term event, periodically held, as a rule, 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 commercial 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 cited when an exhibition is held as a prestigious event, which in terms of its goals is no different from a fair. Therefore, they usually focus not on the difference between international exhibitions and fairs, but on those general opportunities that are provided to the company through its participation in their work. This refers to the presence of certain opportunities that are provided at international fairs and exhibitions to effectively solve the marketing problems facing the company, and above all the problems related to the justification of an effective product and pricing policy, distribution policy and promotion on foreign markets. These tasks can be successfully solved if you carefully justify the need to participate in certain fairs and exhibitions, organize training and participation in their work at the proper level, and also effectively use the results obtained during fairs and exhibitions.
The main objectives of participation in fairs and exhibitions can be:
creation of a high image of the product;
intensification of the use of individual promotion policy instruments;
Creation of a high image of the company.
Each firm can participate in the work of the selected international fair or exhibitions, either as an independent exhibitor or as part of a joint stand or exposition created by several companies.
With the independent participation of the company in the work of an international fair or exhibition, it creates its own stand, ensures its work at the proper level and is fully responsible for the final results of participation in the work of this fair or exhibition. In this case, the firm, as a rule, assumes all costs for the preparation and participation in the exhibition or fair. Partially or fully these costs may be reimbursed by the state. Participation in the work of an international fair or exhibition is directly related to the creation and maintenance of the image of the state.
Of course, the independent participation of the company in the work of an international fair or exhibition is more effective. During the work of an international fair or exhibition, the exhibitor uses all the opportunities he has to achieve the goals he previously formulated. To do this, he primarily uses the stand he has, and also carries out actions and activities that go beyond the stand and are necessary to ensure effective participation in this 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 employees of the company with the first results of participation in a fair or exhibition. In particular, you need to be informed about:
the number of visitors to the fair or exhibition and the changes that have taken place compared to previous years;
acceptability of the stand location;
validity of architectural solutions for the stand;
correct choice of exhibits;
funds spent on preparation and participation in a fair or exhibition;
conducted marketing researches;
contacts with visitors of the fair or exhibition;
working with mass media;
messages in the media about the company's participation in the work of a fair or exhibition, etc.
Participation in the work of each specific international fair or exhibition does not always allow you to achieve the formulated goals. The fact that the results of participation in a fair or exhibition turned out to be worse than expected is the result of a number of reasons:
non-specifically formulated goals of the company's participation in the fair or exhibition;
Poorly presented and designed exposition of the company;
ignorance of potential visitors of the fair or exhibition about the participation of the company in its work;
Unpreparedness of the firm's personnel;
not fully using the possibilities of conducting marketing research of existing problems of product promotion;
An analysis of the company's participation in the work of each specific fair or exhibition that is not entirely justified.
From the above reasons for failure, it can be seen that the success of a company in the work of 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.
