Agency agreement is one of the basic tools for modeling a group of companies. This tool will help in formalizing relationships with geographically remote sales representatives.
Or vice versa, with a single purchaser, accumulating applications from independent entities and getting a lower delivery price for all.
Yes, this agreement has examples of unfair use when it is concluded solely for the purpose of tax savings. However, its thoughtful application can be very useful for business.
In practice, the following questions arise:
distribution of rights and obligations of the parties under the contract;
determination of the amount of remuneration;
business goal of choosing an agent model of relationships;
as well as what to do with special attention of the tax authorities to the agent model.
It is in them that we will understand.
The agent independently negotiates on its own behalf, concludes contracts with third parties. At the same time, it may not follow from the content of these agreements that he acts as an agent, i.e. in the interest of another person. All calculations are carried out through the Agent’s settlement account, which transfers money to the principal for the goods sold (sales agent) or pays for the purchase of the ordered products (purchase agent) from his account. Of the funds received to the agent’s account, he withholds his remuneration (and levies it at his tax rate), compensates for other expenses, if the opportunity for this is provided for in the contract. Or everything is transferred to the principal, who pays off with him separately.
More information - https://en.wikipedia.org/wiki/Agency_agreement
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