Self-employed insurance agent collects advance payment to pay profits tax?

In addition to general commissions, bonuses, gratuities, etc…The insurance agent may receive advance payments from the insurance company, such as the initial signature fee, franchise bonus, or contract bonus, and he will negotiate with the insurance company to offset the amount earned during a certain period of time. Commission, and if the agent fails to remain in office within the relevant period or service period, part or all of the advance payment must be refunded to the company. This sum is not in debt at all. It is business income, and profits tax must be paid in the year in which the sum is obtained.

If the agent ultimately fails to stay in office and has to terminate the contract early and no longer provide services, the advance payment he refunded to the insurance company can be deducted in the year of the refund. He is required to provide documents to prove the exact year of assessment of the refunded amount to support the claim for deduction. If the agent returns the advance payment after the fiscal year, the provision made in the profit and loss statement of the fiscal year can be deducted in the year in which the funds are reserved.

The above information is for reference only. If in doubt, we welcome your tax inquiries

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