Internet Marketing Services – How to Manage Your Accounting When Working internationally


Internet Marketing Services Internationally
We are getting into a more advanced topic with this article as it covers working with foreign currency and transactions abroad within a digital marketing business. This article goes over some high-level topics. It is highly recommended that you, the business owner consult with an accountant in the country where you are doing business to ensure you are not violating tax laws. Laws can be highly confusing and complex when you start to sell digital services in a foreign country.

Accounting for the export of services is very common now with the focus on global markets. Business entities provide various services to non-residents, and controllers are in no hurry to clarify problematic issues related to the taxation of such services. You are mainly on your own when it comes to taxes, or you need to employ a local accountant to help you wade through the tax laws.


Digital Marketing Currency regulation

In the case of rendering services to a non-resident (export of services), the residents' proceeds in foreign currency must be credited to their foreign currency accounts with authorized banks within the due dates specified in the contracts, but not later than 180 calendar days from the date of signing the act or other document certifying the completion of the work, provision of services. It does not matter whether the transaction is a digital service or a physical product, accounting practices are the same.


Currently, receipts in foreign currency from abroad in favor of legal entities are subject to mandatory sale at a rate of 50%. The Bank sells currency exclusively on the next business day after the day such receipts are credited to the distribution account. In this case, the Bank removes the export operation of the resident from control after the proceeds from this operation are credited to the current account of the latter and not to the distribution account. Based on this, you should plan the receipt of revenue so that it remains in stock for at least one more day before the expiration of the 180 days.


Violation by residents of the specified period entails collecting a penalty for each day of delay in the amount of non-received earnings in foreign currency, converted per the exchange rate on the day the debt occurred.


Required documents

In the case of the export of services (other than transport), an agreement (contract) may be concluded by accepting a public offer of an agreement (offer) or by exchanging electronic messages, or in another way, in particular by issuing an invoice (invoice), including in electronic form, for services rendered.

Accounting

Income from contracts for the provision of exported services including digital marketing services into a foreign country is recognized in a general manner. Thus, according to the norms, revenue related to the provision of services is identified based on the transaction completion for the provision of services if the result of this transaction can be reliably estimated.


The result of a service provision operation can be reliably estimated if all of the following conditions are met:

  • The possibility of a reliable assessment of income;

  • The likelihood of receiving economic benefits from the provision of services;

  • The possibility of a reliable assessment of the degree of completion of the provision of services as of the balance sheet date;

  • The possibility of a reliable assessment of the costs incurred for the provision of services and necessary for their completion.

As a rule, the date of income generation is determined by registering the document confirming the provision of services (the act of provided services or services rendered).

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