When a merchant offers an item free of charge, tax authorities still require full VAT to be reported and paid on that item’s original value. Therefore, such transactions must include all relevant VAT details, even if the customer is not paying for the product.
As full discounts cannot be applied directly at the entry level, the correct way to represent a complimentary item in Sign IT is as follows:
- Enter the full price and VAT amounts at the entry-level, as if the item were sold at full value.
- Indicate the item's nature by setting the details.purpose field to "GIFT"
While partial discounts can be applied normally at the entry-level, a 100% discount must be represented as a GIFT. This ensures proper VAT handling and avoids compliance issues.
Below is an example representing an item offered free of charge ("GIFT").
{
"type": "SALE",
"data": {
"type": "ITEM",
"text": "Product XYZ",
"unit": {
"quantity": "1",
"price": "50"
},
"value": {
"base": "40.983607"
},
"vat": {
"type": "VAT_RATE",
"code": "STANDARD",
"percentage": "22.00",
"amount": "9.016393",
"exclusive": "40.983607",
"inclusive": "50"
}
},
"details": {
"concept": "GOOD",
"purpose": "GIFT",
"number": "1",
"description": "Product XYZ"
}
}