Purchase tax invoices not issued within the taxable period to which the time of supply belongs shall not be subject to deduction.

Since the input tax amount of purchase tax invoices not delivered within the taxable period to which the time of supply belongs is not subject to deduction, the rejection disposition is legitimate.

Article 5 of the Value-Added Tax Act

2015Guhap2102 Disposition rejecting the rectification of value-added tax

AAAA et al.

○ Head of tax office

July 17, 2015

August 21, 2015

1. All of the plaintiffs' claims are dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

The Defendant’s refusal to refund value-added tax for the second term portion of 2013 against Plaintiff AAA on June 23, 2014 is revoked. The Defendant’s refusal to refund value-added tax for the second term portion of 2013 against Plaintiff BB on June 20, 2014 is revoked.

1. Details of the disposition;

A. Disposition against the Plaintiff, AAA (hereinafter referred to as “Plaintiff AA”)

1) Plaintiff AAA purchased six households from the CCC Construction (hereinafter “CC Construction”), ○○○○○○○○○○○○○○-ro ○○○○○○ apartment (hereinafter “instant apartment”), and completed each registration of ownership transfer on November 26, 2013.

2) On January 10, 2014, Plaintiff AA received 6 copies of the electronic tax invoice on December 1, 2013 (total supply value ○○○○) entered as of December 1, 2013 with respect to 6 households of the instant apartment from the CCC Construction, and filed a return on the input tax deduction for the second period of value-added tax for 2013. However, the Defendant deducted the input tax amount on the instant tax invoice pursuant to Article 39(1)2 of the Value-Added Tax Act on the ground that the instant tax invoice was “other tax invoices than the facts received after the lapse of the normal taxable period.”

3) Accordingly, on April 29, 2014, Plaintiff AA requested the Defendant to seek the deduction of the above input tax amount, but the Defendant rejected the said request for correction on the same ground as on June 23, 2014.

4) Plaintiff AA filed an appeal with the Tax Tribunal on September 17, 2014, but was dismissed on December 18, 2018.

B. Disposition against Plaintiff BB

1) Plaintiff BB (hereinafter “Plaintiff BB”) purchased two households of the instant apartment from CCC Construction, and completed each registration of ownership transfer on November 26, 2013.

2) On January 10, 2014, Plaintiff B received two copies of the electronic tax invoice (referring to the total supply value of KRW 00, hereinafter “instant tax invoice”) issued by Plaintiff AAA on December 1, 2013, which entered as of December 1, 2013 from the CCC Construction with respect to the two households of the said apartment, and filed the input tax return for the second period of value-added tax (tax refund) for 2013. However, the Defendant was not allowed to deduct the input tax amount for the instant tax calculation pursuant to Article 39(1)2 of the Value-Added Tax Act on the ground that the instant tax invoice was “the fact that it received after the lapse of the normal taxable period.”

3) Accordingly, on April 29, 2014, Plaintiff B filed a request for correction with the Defendant for the deduction of the above input tax amount, but the Defendant rejected the said request for correction on the same ground on June 20, 2014 (hereinafter referred to as “each of the instant dispositions”) (hereinafter referred to as “each of the instant dispositions”).

4) Plaintiff BB filed an appeal with the Tax Tribunal on September 17, 2014, but was dismissed on December 23, 2014.

[Ground of recognition] Facts without dispute; Gap evidence Nos. 1 and 2; Eul evidence Nos. 1 through 3 (2015Guhap2102), Gap evidence Nos. 1 and 5 (2015Guhap2102), Eul evidence Nos. 1 through 5 (2015Guhap21040; hereinafter the same shall apply); the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiffs' assertion

1) Although the instant tax invoice was issued after the taxable period to which the time of supply for the instant apartment belongs (on November 26, 2013), the date of preparation, which is a requisite entry in the tax invoice, was entered and issued on December 1, 2013, which is the same taxable period as the time of supply for the instant apartment (til December 31, 2013), does not constitute the case where the necessary entry in the tax invoice under the proviso to Article 39 (2) of the Value-Added Tax Act and Article 75 subparagraph 3 of the Enforcement Decree of the same Act is written differently from the fact, as it is based on the Special Provision for Issuance of Tax Invoice under Article 34(3) of the Value-Added Tax Act. Accordingly, each of the instant dispositions is unlawful.

2) Although a tax invoice was issued later than the actual time of supply for the apartment of this case, the date of preparation of the tax invoice was set as the date belonging to the same taxable period as the actual time of supply, and did not affect the Defendant’s determination of the tax base, and the document function of determining the transaction of the tax invoice and the value-added tax was not undermined. Each disposition of this case refusing to deduct the input tax amount of the tax invoice of this case solely on the

3) The Plaintiffs’ delayed issuance of the instant tax invoice is due to the fact that CCC Construction delayed the issuance of the tax invoice. As such, there exist justifiable grounds for the issuance of the tax invoice after the lapse of the taxable period, each of the dispositions of this case, which non-deductible input tax amounts under the instant tax invoice, is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether the necessary entry constitutes a case where it is false

Article 32(1) of the Value-Added Tax Act provides that the registration number, name or title (title 1), the registration number (title 2), the supply price, value-added tax (title 3), and the date of preparation (title 4), etc. of the entrepreneur who supplies shall be the requisite entry of the tax invoice. Article 39(1)2 of the same Act provides that the input tax amount under the tax invoice shall not be deducted if the entrepreneur fails to issue the tax invoice or if the requisite entry of the tax invoice is entered differently from the fact. Meanwhile, Article 34(3)3 of the same Act (hereinafter referred to as the "special case of issuance") provides that the tax invoice may be issued by the tenth day of the month following the month to which the date of supply belongs if the actual transaction is confirmed based on related evidentiary documents, etc. and a tax invoice is issued as the date of preparation of the relevant transaction.

Article 39(1)2 of the Value-Added Tax Act provides that "the date of preparation, which is a part of the requisite entry items of the tax invoice, is different from the facts." In such a case, if the transaction of the tax invoice is confirmed in accordance with the remaining entry items of the tax invoice under Article 39(1)2 of the Value-Added Tax Act, the input tax amount for the above transaction should be deducted, but it shall be limited to the case where the taxable period to which the actual date of preparation belongs belongs is the same (in such a case, the "date of preparation," which is stated in the tax invoice shall be entered as the date of actual preparation, but shall not be entered retroactively as the date of actual transaction or any specific period, even if the tax invoice is prepared after the expiration of the taxable period, which falls under Article 39(2)2 of the Value-Added Tax Act. 1. 2. 3. 1. 2. 1. 2. 2. 1. 2. 2. 2. 1. 2. 20, the Plaintiffs shall not be deducted from the output tax amount of the apartment case.

2) Whether each disposition of this case is unlawful, where the function of the tax invoice is not disturbed

Although the current Value-Added Tax system adopting the predevelopment Tax Credit Act, which provides for the issuance and issuance of documentary evidence to determine value-added tax at the time of transaction would ensure the truth of the documentary evidence, the tax invoice system has the function of mutual verification between taxpayers that facilitate the circulation of income tax and corporate tax as well as value-added tax by exposing the transaction between the parties concerned, and it is essential that the preparation and delivery of a tax invoice should be done normally within the taxable period to which the date of the transaction belongs in order for the assessment and mutual verification to function properly as above due to the characteristics of value-added tax conducted for each taxable period. Therefore, where the input tax amount is deducted pursuant to the special provision for issuance of this case, it shall be deemed that the taxable period to which the date of the actual preparation of the tax invoice belongs and the taxable period to which the date of actual transaction belongs (see, e.g., Supreme Court Decision 2002Du5771, Nov. 18, 2004).

Therefore, as seen earlier, unless the actual preparation date of the instant tax invoice (from January 1, 2014 to June 30, 2014) and the actual transaction period (from November 26, 2013 to December 31, 2013) belong to the taxable period (from July 1, 2013 to December 31, 2013) that belongs to the actual transaction date (from January 1, 2014 to June 30, 2014), it cannot be deemed that the reasons proposed by the Plaintiffs alone did not impair the function of the tax invoice. Thus, the Plaintiffs’ assertion on this part is without merit.

3) Whether there are justifiable grounds

According to Article 126-4 of the Restriction of Special Taxation Act and Article 121-4 of the Enforcement Decree of the same Act, where an entrepreneur who supplied goods fails to issue a tax invoice at the time of issuance of the tax invoice, the supplier of the goods may issue a purchaser-issued tax invoice after obtaining confirmation from the head of the tax office, and the supplier may deduct the input tax amount entered in the purchaser-issued tax invoice. Therefore, even if the CCC Construction delayed the issuance of the tax invoice, the Plaintiffs, the purchaser, can issue the purchaser-issued tax invoice upon confirmation by the Defendant, and thus, the Plaintiffs, as the purchaser, could be entitled to receive the input tax amount deduction. Thus, the testimony by the witness ○○○ does not have any justifiable reason to issue the

3. Conclusion

Thus, the plaintiffs' claims are dismissed in entirety as there is no ground.