The Panorama by Kantar report analyzes many purchasing trends, including the factors that influence customers’ purchasing decisions. In 2024, it revealed an important milestone for Spanish shoppers. Price was the most decisive factor for 54% of customers. This factor surpassed quality (49%) for the first time.

As a result of this change, companies are striving to offer customers the lowest possible prices. To prevent this tactic from excessively impacting business profits, some companies opt for larger volume purchases from their suppliers. Suppliers incentivize these transactions with commercial agreements, such as rebates. In this article, we explain rebates, including how to calculate them and implement them in your business.

What’s in this article?

• What are rebates?
  
• Types of rebates
  
• Regulations governing rebates in Spain
  
• How to calculate rebates
  
• How to prepare an invoice with a rebate
  
• How to record rebates in Spain
  
• How Stripe can help you automate rebates
  
• FAQs about rebates in Spain
  

What are rebates?

A rebate is a type of purchase volume discount that companies offer to business customers if they reach a certain volume of sales or units purchased by the end of a period. The terms of a rebate—such as the volume and period (e.g., annual, semiannual, or quarterly)—are agreed upon beforehand and typically outlined in a contract.

Purchasing from a supplier that offers rebates can be beneficial for both parties. The customer can achieve significant savings, while the supplier builds customer loyalty and increases sales through recurring purchases.

Types of rebates

Businesses can apply rebates in different ways, so it is important to select the best fit for your business. These are the main types:

• Volume-based
  The vast majority of companies in Spain use this type of rebate. The price is reduced upon reaching a certain spending threshold or number of units purchased within the agreed-upon period.
  
• Product-based
  Sometimes, suppliers aim to boost sales of certain products, especially those that generate a higher net profit margin. To that end, they offer a rebate for a product, which applies exclusively to that product and not to the rest of the supplier’s offerings.
  
• Customer-based
  It is common for suppliers to reach specific commercial agreements with some customers. In these cases, the customer benefits from a different rebate threshold than the ones set for other customers. For example, the purchase volume required for a neighborhood store to access a discount is usually structured differently than one for a supermarket chain.
  

Regulations governing rebates in Spain

In Spain, rebates are governed directly or indirectly by various regulations. We explain them below:

• General Accounting Plan
  Royal Decree 1514/2007—the General Accounting Plan (Plan General de Contabilidad, or PGC)—requires companies to reflect the net amount of sales in their records. This involves deducting any volume rebates applied. To comply with this regulation, the PGC suggests using Account 609 for rebates on purchases and Account 709 for rebates on sales. While recording the net discount is mandatory, using these specific numerical codes is optional. They are recommended as the industry standard in Spain.
  
• Value-Added Tax (VAT) Law
  Article 80 of Law 37/1992 allows suppliers to reduce the tax base after the sale if the customer later reaches the threshold to receive a rebate. In these cases, when the final price decreases, the corresponding VAT also decreases proportionally. It is important to remember that, according to the Practical VAT Guide of the Spanish Tax Agency (AEAT), the VAT charged can be adjusted by issuing a corrective invoice or credit note.
  
• Law 15/2007
  Law 15/2007 on the Defense of Competition prohibits some practices related to rebates and other promotions. For example, Article 1 prohibits agreements between companies to set discounts that limit or distort free competition. Article 2 prohibits the abuse of a dominant position. This occurs when a company applies a rebate that prevents smaller companies from competing.
  

How to calculate rebates

While the process is quite simple, we have prepared a list of steps to implement rebates quickly and efficiently.

Define the rebate

The first step is to determine the specifics of the rebate, such as its calculation formula, period, and purchase volume. At this point, it is important to consider the business’s break-even point and find a balance between offering an attractive discount and maintaining business profitability.

Agree upon the rebate with the customer

Once you have decided on the terms of the rebate, communicate them to the customer. If the customer is interested, the next step is to formalize the agreement with a contract.

Perform calculations with the chosen formula

Rebates can be calculated according to different formulas. Here are the most common ones in Spain.

Fixed rebate

This consists of agreeing on a single percentage that is applied to all accumulated purchases. The formula is as follows:

Rebate = Purchase Volume x Discount Percentage

For example, if you set a 3% discount when reaching €5,000 in annual purchases and the customer closes the year with an accumulated spending of €6,000, the rebate will be €180.

Tiered rebate

With this rebate type, a percentage is agreed upon that varies depending on the tier. It is calculated using the following formula:

Rebate = Purchase Volume x Percentage Applicable to the Tier

In this case, the discount is allocated in tiers. For example, a 2% discount applies when reaching €3,000 in annual purchases, and a 3% discount applies when reaching €5,000. If the customer has accumulated purchases of €6,000 by the end of the year, the rebate will be €180. The 3% discount associated with the second tier applies.

Incremental tiered rebate

Similar to a tiered rebate, this formula uses a variable percentage. However, in this case, the discount is applied specifically to each tier and increases proportionally to the purchase volume. The formula to calculate it is as follows:

Rebate =
Volume of Tier A x Discount Percentage of Tier A
+
Volume of Tier B x Discount Percentage of Tier B
+
Etc.

As in the previous example, the discount is assigned in tiers: 2% upon reaching €3,000 in annual purchases and 3% upon reaching €5,000. If the customer accumulates €6,000 in spending by the end of the year, the rebate will be €70. This includes a 2% discount applied to the €2,000 in the first tier (i.e., from €3,000–€5,000) plus 3% applied to the €1,000 in the second tier (i.e., from €5,000 onward).

Include discounts on invoices

The AEAT’s practical VAT manual states that the description of the transactions must include the unit price excluding tax for each item, as well as any discounts or reductions not included in that unit price.

How to prepare an invoice with a rebate

Once you have calculated the rebate, you can include it in the invoice. Since this is a corrective credit note, the regulation governing invoicing obligations provides some flexibility, such as the possibility of omitting the individual identification of the original invoices if the issuance period is specified.

How to record rebates in Spain

The PGC establishes obligations for recording rebates, such as noting the net amounts of sales. It also includes recommendations from the Spanish Institute of Accounting and Auditing (Instituto de Contabilidad y Auditoría de Cuentas, or ICAC) on numbering and naming the chart of accounts. This serves to flexibly organize the company’s accounting information.

The chart of accounts includes several specific categories of accounts and is designed to record a company’s accounting internally and independently. The goal is to outline the company’s economic situation for third parties, such as banks.

Businesses can use the charts of accounts suggested in the PGC or their own to record rebates. Either way, they must note B2B commercial incentives in the internal accounting books and summarize them in financial statements once a year.

Furthermore, the process of recording rebates using the chart of accounts presents significant variations that depend on whether a company is the seller or buyer. Below, we outline specific cases.

Rebates for sales

If a company is a supplier and grants rebates, it is advisable to record the rebates in Account 709. It includes several subaccounts to categorize them:

• Subaccount 7090: Rebate on sales of products not manufactured by the company, such as household appliances a wholesaler sells to a retailer
  
• Subaccount 7091: Rebate on sales of products the company makes, such as bread baked by a bakery sold to a restaurant
  
• Subaccount 7092: Rebate on sales of semifinished products, such as steel chassis sold to an automobile manufacturer
  
• Subaccount 7093: Rebate on sales of by-products or waste, such as leather scraps from a shoe factory sold to a handbag manufacturer
  
• Subaccount 7094: Rebate on sales of containers and packaging, such as glass bottles a glass factory sells to a bottling plant
  

Additionally, it is recommended to record the granting of the rebate in one of the following subgroups:

• Subgroup 43: Rebates that reduce the amount of outstanding invoices
  
• Subgroup 57: Rebates that provide a partial refund
  

In addition, the reduction in VAT charged must be recorded in Account 477 or the equivalent account used by the business to record accrued VAT. At the end of each quarter, this information is cross-referenced with the information from the account that documents charged VAT in order to settle the difference in the quarterly VAT return.

Rebates for purchases

If you receive rebates from your suppliers, it is advisable to record them in Account 609. Similar to Account 709, this account includes several subaccounts to categorize rebates:

• Subaccount 6090: Rebate on purchases of products sold without undergoing transformation, such as computers acquired by computer stores
  
• Subaccount 6091: Rebate on purchases of items the company uses as raw materials to manufacture its products, such as wood a furniture factory purchases to make tables and chairs
  
• Subaccount 6092: Rebate on purchases of other supplies, such as cardboard boxes ecommerce businesses purchase to ship products
  

It is also recommended to record the savings in one of the following subgroups:

• Subgroup 40: Rebates applied by the supplier that reduce the amount of outstanding invoices
  
• Subgroup 57: Rebates applied by the supplier that provide a refund
  

In addition, the reduction in paid VAT must be recorded in Account 472 or the account that the business uses to record deductible VAT. At the end of the quarter, the information is cross-referenced with the VAT charged account to settle the difference in the quarterly VAT return.

Rebates for sales and purchases

Companies sometimes offer rebates and benefit from rebates on purchases. For example, an office furniture company provides a 5% discount to companies that reach an annual purchase volume of €30,000. In turn, it saves 3% through a rebate established by its packaging material supplier. In these cases, businesses must record both rebates separately in their accounting.

How Stripe can help you automate rebates

As revealed in McKinsey’s B2B Pulse Survey, 34% of companies and professionals preferred to use online self-service options in 2024. This means they prefer to make B2B purchases directly through an ecommerce platform instead of a physical store. Given this trend, it is advisable to automate discounts. Stripe Payments can help.

Stripe’s payment gateway allows you to add rebates and other types of discounts. These are applied automatically to avoid errors, which are common with tiered and incremental rebates. It also allows your customers to pay with their preferred payment methods, such as credit and debit cards, Apple Pay, Google Pay, and installment payments.

Meanwhile, Stripe Billing facilitates the implementation of volume pricing models, such as tiered rebate rates. Because of the flexibility this solution offers, you can charge different prices depending on the volume levels you set.

FAQs about rebates in Spain

How can I record products received free of charge due to a rebate?

If your supplier gives you a rebate that involves receiving a free product, you must record it as a direct reduction in the amount of your purchases. This is true even though, in practice, it is not really a discount on the price. To do this, record it in Account 609, which is recommended in the PGC. Alternatively, you can record it in the equivalent account used by the company in its accounting system.

Is it mandatory to record rebates in Accounts 609 and 709?

It is not necessary to use those specific accounts, but it is mandatory to record the discounts and comply with the rules and structure for organizing the contents of the financial statements. For this reason, the regulations recommend using a name similar to that of Accounts 609 and 709.

What is the difference between a rebate and a direct volume discount?

A business grants a rebate when the customer reaches the agreed-upon minimum purchase amount within a specific period. Therefore, they are typically applied retroactively. This requires modifying the invoice through a corrective invoice. Conversely, businesses apply direct volume discounts when processing the purchase. They reduce the amount, so issuing a corrective invoice is not necessary. Generally, the price and VAT of the original invoice are correct.

When should a corrective invoice be issued for a rebate?

Businesses should issue corrective invoices as soon as they grant rebates, if applying the rebate modifies the VAT tax base. This situation is common when applying this type of discount because rebates reduce prices that were previously paid and invoiced. The maximum period for issuing a corrective invoice is four years from the accrual of the tax (i.e., when the legal obligation to declare VAT arises).

Is it legal to cancel a rebate?

It is legal to cancel a rebate if the customer has not yet reached the agreed-upon purchase volume and breaches a contractual obligation, such as maintaining exclusivity with the supplier. However, it is not legal to cancel a rebate if the customer has already reached the agreed-upon thresholds. Article 1256 of the Civil Code prohibits unilaterally modifying or canceling contracts.