Whether the input tax amount shall be deducted pursuant to a tax invoice prepared and delivered retroactively by the date of preparation in accordance with the actual time of supply after the expiration of the taxable period of the value-added tax (negative)

Even if a tax invoice is prepared and issued retroactively after the actual transaction date in violation of Article 16(1) of the Value-Added Tax Act, even if the preparation date is different from the actual transaction date, and the fact of transaction is confirmed in accordance with the entries of the tax invoice, an input tax amount on the fact of transaction shall be deducted. However, even in cases where the preparation and issuance date of the tax invoice is made after the transaction date and the preparation date is entered retroactively as the actual transaction date, even if the transaction is confirmed, it shall be limited to the case where the taxable period to which the actual transaction date belongs belongs, and the taxable period to which the actual transaction date belongs. Thus, the tax invoice, which is prepared and delivered retroactively after the expiration of the pertinent taxable period, is consistent with all the facts, and the transaction date is confirmed ex post at the request for correction as stated, barring special circumstances, shall be excluded from the input tax amount deduction pursuant to Article 17(2)1-2 of the Value-Added Tax Act.

Articles 9(1), 16(1), 17(1), 17(2)1-2 of the Value-Added Tax Act, Articles 21(1)4, 53(1), 54, and 60(2) of the Enforcement Decree of the Value-Added Tax Act, Article 9 of the Enforcement Rule of the Value-Added Tax Act, Article 45-2(1) of the Framework Act on National Taxes

Supreme Court Decision 87Nu956 delivered on January 19, 198 (Gong1988, 464) Supreme Court Decision 95Nu634 delivered on August 11, 1995 (Gong1995Ha, 3140)

Effective Co., Ltd., the taking over of the lawsuit of filial piety Co., Ltd.

Head of Yeongdeungpo Tax Office

November 17, 1999

Seoul Administrative Court Decision 98Gu24859 delivered on March 31, 1999

1. The judgment of the court below is revoked and the plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the plaintiff in both the first and second instances.

The defendant's decision that each disposition rejecting a request for reduction or correction of value-added tax for the second term of 24,055,393 won in 1996 and the first term of 197 amount in 197 should be revoked.

The same shall apply to the order.

1. Details of the instant disposition

The following facts are not disputed between the parties, or can be acknowledged by considering the whole purport of the pleading in each of Gap evidence 1 and 2, Gap evidence 3-2, Gap evidence 4-1 and 4, Eul evidence 1 and 6.

A. Effective Real Estate Industry Co., Ltd. (hereinafter referred to as "non-party company") purchased each of the buildings listed in the attached Table 1 attached hereto (hereinafter referred to as "the building in this case" in total of the buildings listed in the attached Table 2 attached hereto from a stude, a business operator for the purpose of using it as a motor vehicle maintenance plant on December 26, 1996, at KRW 10,586,850,000, and paid KRW 2,17,000,000, and paid KRW 1,20,588,000 on March 31, 197 and June 30, 1997; KRW 1,58,00,000,000 each of the above buildings listed in the attached Table 1 attached hereto; KRW 5,293,80,000,0000; KRW 385,000,0000; KRW 3084,5840,05,040.

B. After that, even though the non-party company paid the purchase price in full on the agreed date to the early payment under the above sales contract, it did not receive each tax invoice on the supply price of the building of this case at each time of payment of the down payment and the first and the second intermediate payment. However, on August 30, 1997, the remaining payment date came into existence on August 30, 1997, the non-party company received 240,553,930 won of supply price of this case as of December 26, 1996, and 24,05,393 won of tax amount, 24,05,393 won of tax amount, March 31, 197, and June 30 of the same year, each of the supply price amount of 180,43,860 won of tax amount, 18,044,386 won of tax amount (hereinafter referred to as the "tax invoice of this case") together with the actual payment date on the delivery date of this case.

C. On January 25, 1997 and July 25, 1997, respectively, the non-party company filed a final return on the second term portion of 1996 and the first term value-added tax for the first term of 1997, respectively, within the statutory due date of return, to the Defendant, the non-party company did not include the value-added tax on the supply of the building of this case in the input tax amount. Upon the expiration of each taxable period, the date of preparation was delivered the tax invoice of this case, which was retroactively stated by the date of preparation, on October 27, 1996, the non-party company filed a claim for correction against the Defendant on October 27, 1996 for the reduction of the input tax amount under the tax invoice of this case under Article 45-2(1) of the Framework Act on National Taxes.

D. However, on January 19, 198, the Defendant rendered the instant disposition rejecting a request for correction by Nonparty Company on the ground that the date of issuance of the tax invoice violates Article 16 of the Value-Added Tax Act (hereinafter “Act”) and the date of preparation is different from the date of actual preparation, and it cannot be subject to the deduction of each input tax amount pursuant to Article 17(2)1-2 of the Act.

E. On November 27, 1998, the non-party company was merged with the Plaintiff and succeeded to its status comprehensively.

2. Whether the instant disposition is lawful

A. The parties' assertion

In regard to the Defendant’s assertion that the instant disposition is lawful on the grounds of the above disposition grounds and relevant statutes, the Plaintiff asserted that the date of preparation of the instant tax invoice is only different from the date of actual preparation, and all the remaining entries are true, and thus the relevant transaction is confirmed in accordance with the stated contents. Therefore, each input tax amount under the instant tax invoice should be deducted from the output tax amount of the second half-year portion in 1996 and the first half-year portion in 197 where the relevant transaction was conducted.

(b) Related statutes;

According to Article 9(1) of the Act, Article 21(1)4 of the Enforcement Decree of the Act, Article 21(1)4 of the Act, and Article 9 of the Enforcement Decree of the Act, where the payment of any price other than the down payment is made before the goods are delivered or made available for use, the time when each portion of the price is received for the supply of the goods under interim payment condition for which the period of the payment is not less than six months is not less than six months, is the time when the goods are supplied. According to Articles 16(1), 53(1), and 54 of the Decree, where an entrepreneur registered as a taxpayer supplies the goods at that time, the entrepreneur’s registration number and name or title, the registration number and value-added tax amount, the date of preparation, and the date of delivery shall, in principle, be delivered to the person who receives the goods. Provided, That where a monthly tax invoice is issued by each customer or it is confirmed by related documentary evidence and the tax invoice is issued as the date of issuance, a tax invoice may be issued by the tenth day of the following month.

In addition, according to Article 17 (1) and (2) 1-2 of the Act and Article 60 (2) of the Decree, the amount of value-added tax payable by an entrepreneur shall be governed by the so-called "pre-stage tax credit (the pre-stage tax credit)," which deducts the amount of input tax from the amount of output tax, and the "where the tax invoice under Article 16 (1) and (3) of the Act is not issued, or where the whole or part of the requisite entry items under Article 16 (1) 1 through 4 of the Act are not entered or entered differently from the fact in the tax invoice issued," the deduction of the amount of input tax shall be excluded: Provided, That even if some of the requisite entry items are entered by mistake, if the fact of transaction is confirmed in view of the other requisite entry items or discretionary entry items in the relevant tax invoice, the amount of input tax shall be deducted.

(c) Markets:

(1) A tax invoice under the Value-Added Tax Act is, in principle, delivered at the time of supply of goods unless the tax invoice is delivered in advance before the transaction date (see Article 9(3) of the Act) or the special case of issuance under Article 54 of the Decree (i.e., a monthly aggregate tax invoice under Article 54 subparag. 1 of the Decree, a tax invoice under Article 54 subparag. 2 of the Decree, and a tax invoice issued by the 10th day of the month following the date of supply in cases where the transaction is confirmed). However, a tax invoice is an evidential document to determine value-added tax and its preparation and delivery are to guarantee the truth of the documentary evidence. Thus, even if a tax invoice is prepared and issued retroactively after the actual transaction date in violation of the time of preparation and delivery under Article 16(1) of the Act, and if the transaction is verified as the date on which the actual transaction date is prepared, the input tax amount should be deducted (see, e.g., Supreme Court Decision 198Nu658, Jan. 198, 198).

However, in the event that the preparation and delivery of the tax invoice is made after the transaction date and the preparation date is entered retrospectively, even if the transaction is confirmed, the input tax deduction shall be allowed only when the taxable period to which the actual preparation date belongs and the actual transaction date are the same.

First, the case where a tax invoice is prepared and delivered after the transaction date in violation of the provisions of Article 16 of the Act refers to the case where only the preparation date is the retroactive entry of the transaction date, and the case where the preparation date is not the retroactive entry of the transaction date but the actual preparation date is entered or the transaction date is entered differently from the transaction date. In this case, there is no reasonable ground to regard the preparation date differently depending on the contingency situation where the actual time of supply does not coincide with the actual time of supply. Thus, in the above case, the deduction of the input tax amount is allowed only when the taxable period to which the date of the tax invoice belongs belongs and the taxable period to which the actual transaction date belongs are the same (see Supreme Court Decision 95Nu634 delivered on August 11, 195, etc.). It is reasonable to interpret the same as this case ①.

Second, without any restriction as above, even after the expiration of the pertinent taxable period without preparing and delivering a tax invoice, the preparation and issuance of a tax invoice up to the period for filing a request for correction (one year) under Article 45-2(1) of the Framework Act on National Taxes is allowed, and the deduction of an input tax amount is inevitable for a considerable period of time.

Third, under the current VAT Act, the purpose of the tax invoice system is to induce normal transactions between the parties under the current VAT Act, to encourage sincere tax payment of value-added tax, and to properly perform the role of a withholding receipt for preventing the omission of value-added tax. However, if a tax invoice prepared and issued retroactively after the lapse of the relevant taxable period is allowed to claim the input tax deduction at the stage of filing a claim for correction with respect to the tax invoice prepared and issued after the lapse of the relevant taxable period, the most essential role of the above tax invoice system in the VAT system is not properly performed.

Therefore, a tax invoice prepared and delivered retroactively according to the actual time of supply after the lapse of the pertinent taxable period, even if it conforms to all the matters to be entered except the date of preparation, and the fact that there was a fact of transaction as stated is confirmed ex post facto at the claim stage of correction, such a tax invoice shall be excluded from the list of input tax deduction pursuant to Article 17 (2) 1-2 of the Act, unless there are special circumstances.

(2) As seen earlier, the instant tax invoice submitted by the non-party company to deduct the input tax amount at the time of filing a claim for correction is retroactively prepared and delivered in accordance with the actual time of supply after the lapse of the taxable period to which the date of each transaction belongs. Thus, even if all the remaining entries except the date of each preparation are true and the fact of transaction is confirmed as the content of each entry, the input tax amount may not be deducted pursuant to Article 17(2)1-2 of the Act.

3. Conclusion

Therefore, the disposition of this case which rejected the claim for correction by the non-party company claiming the deduction of input tax amount as to the tax invoice of this case is legitimate. Thus, the plaintiff's claim of this case seeking the revocation is dismissed on the premise that the disposition of this case is unlawful, and the judgment of the court below is unfair and the defendant's appeal is with merit. It is so decided as per Disposition.

Judges Shin Hyun-chul (Presiding Judge) (Presiding Justice)