Even during the same taxable period, a selection-level tax invoice issued without receiving the price shall not be eligible for input tax deduction.

In cases where a tax invoice is issued before the time of supply without paying the price, there is no provision that deducts the input tax amount, and there is no need to protect the purchaser, as well as the result that guarantees the purchaser to enjoy unjust benefits that are subject to the refund of the tax amount in advance, so even if the actual transaction is confirmed within the same taxable period, the input tax amount cannot be deducted.

2013Guhap1684 Disposition to revoke the imposition of value-added tax

AAA, Inc.

QQQ세무서장

August 22, 2013

September 26, 2013

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The Defendant’s imposition of OOO for the second period of value-added tax on June 1, 2012 against the Plaintiff and the imposition of OOO for the second period of value-added tax on July 10, 2013 is revoked.

1. Details of the disposition;

A. On July 6, 201, the Plaintiff was a corporation established for the purposes of logistics service business, warehouse business, etc., and entered into a contract for construction work with the Plaintiff on July 6, 201, on the construction period for the construction of the logistics center in the hinterland of the OB complex from July 7, 2011 to January 31, 2012, and the construction amount shall be paid from the OOO (excluding value-added tax) up to October 31, 201, and the pre-paid OOO(value-added tax shall be paid up to October 31, 201, and the remainder of the construction amount shall be paid after deducting the amount calculated at the rate of each base period from the construction amount calculated at each base rate up to the time of each month. The Plaintiff and the BB industry development concluded a contract for construction work by increasing the construction amount on December 23, 201 to the OO(value-added tax separately).

B. On October 18, 201, the Plaintiff issued each tax invoice for the above advance payment from the development of BB industry, and paid advance payment OOO to the development of BB industry on October 31, 2011.

C. Between July 201 and December 2011, the details that the Plaintiff received a tax invoice from BB industrial development and paid the construction cost are as follows:

See Table 3 of the Court Decision

D. After conducting a tax investigation with respect to the Plaintiff from March 12, 2012 to March 14, 2012, the Defendant imposed an imposition of the value-added tax of KRW OOOO (including additional taxes) on June 1, 201 on the ground that each tax invoice of the supply value as of October 18, 201 and the tax invoice of KRW OOOO (value) issued prior to the time of supply for services constituted a false tax invoice.

E. On July 31, 2012, the Plaintiff filed an appeal with the Tax Tribunal on July 31, 201. On February 19, 2013, the Tax Tribunal rendered a decision to deduct the input tax amount equivalent to the OOOO won (+OOOO won + OOOOO won) from the output tax amount on October 4, 201, and to dismiss the remainder of the tax claims, among the supply values of each tax invoice on October 18, 2011.

F. On March 5, 2013, the Defendant, upon the determination of the said Tax Tribunal, deducted the input tax amount from the output tax amount, and subsequently corrected the value-added tax amount for the second period of 201 from the OO0 won to the OO0 won (this tax EX + additional tax O0 won).

G. On July 10, 2013, when the instant lawsuit was pending, the Defendant revoked ex officio the part regarding the imposition of penalty tax, and subsequently re-exempt OOO (hereinafter referred to as the “instant disposition”), specifying the type of penalty tax and the basis for calculation (i.e., imposition of the principal tax as of June 1, 2012, which was revised on March 5, 2013 as of March 5, 2013; and (ii) imposed the penalty tax as of July 10, 2013).

[Reasons for Recognition] Facts without dispute, Gap evidence 1 through 4, Eul evidence 1-1 to 5-2, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Of each tax invoice dated October 18, 201, the remaining input tax amount, which was deducted from the output tax amount by the decision of the pertinent Tax Tribunal, is issued earlier than the actual date of supply. However, even if a tax invoice was prepared differently from the time of supply for goods or services, the defect is cured as long as it was made in the same taxable period as the time of supply for goods or services, and such circumstance does not vary depending on whether the tax invoice was made prior to the time of supply for goods or services or whether the tax invoice was made after the time of supply for goods or services. Thus, a tax invoice made after the time of supply for goods or services is treated as a legitimate tax invoice under Article 60(2)3 of the Enforcement Decree of the Act, as well as where the transaction of a tax invoice was confirmed even in cases of a tax invoice made before the time of supply for goods or services, it shall be deemed a legitimate tax invoice

2) The “seven days from the date of issuance of tax invoices” under Article 54(2) of the Enforcement Decree of the Value-Added Tax Act shall be construed as seven days from the date when the taxable period elapsed or as a decoration provision.

3) The Defendant’s act of unjust enrichment by refusing to deduct a large amount of input tax deduction on the grounds of minor circumstances in the same taxable period constitutes excessive prohibition, violation of the good faith principle, abuse of collection right, and violation of the tax law interpretation standard under Article 18 of the Framework Act on National Taxes.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

1) Requirements for input tax deduction

Article 16(1) of the former Value-Added Tax Act (amended by Act No. 11608, Jan. 1, 2013; hereinafter referred to as the “Act”) provides that where an entrepreneur registered as a taxpayer supplies goods or services, he/she shall deliver an invoice stating the registration number and name of the entrepreneur who supplies goods or services at the time prescribed in Article 9 of the Act, the registration number, the value-added tax, the value-added tax, the preparation date, etc. of the supplier (hereinafter referred to as “necessary entry”) to the person entitled to the supply. Article 9(2) and (3) of the Act provides that where a service is supplied or the goods, facilities, or rights are used, the tax invoice shall be deemed to be the time of supply of the service, but where a tax invoice, etc. is delivered after receiving all or part

Meanwhile, Article 17 (2) 2 of the Act provides that an input tax amount shall not be deducted in cases where all or part of the matters to be entered under Article 16 (1) 1 through 4 are not entered or mistakenly entered in the tax invoice issued under Article 16 (1) of the Act, or where all or part of the matters to be entered under Article 16 (1) 1 through 4 are entered in the tax invoice, but the same shall not apply to specific cases prescribed by the Presidential Decree. Article 60 (2) 2 and 3 of the Enforcement Decree of the Act provides that an input tax amount may be deducted from the output tax amount in cases where the relevant tax invoice is entered in error in some of the necessary matters to be entered under Article 16 (1) of the Act, but the fact of transactions is confirmed by deeming the relevant tax invoice as other necessary matters or discretionary matters to be entered (subparagraph 2), and a tax invoice issued after the time of supply for

In addition, Article 54 (2) of the Enforcement Decree of the Act provides that if an entrepreneur issues a tax invoice prior to the arrival of the time of supply for goods or services and pays the price within seven days from the date of issuance of the tax invoice, the entrepreneur who pays the price shall be deemed to have issued a tax invoice pursuant to Article 16 (1) of the Act, and Article 16 (3) of the Act provides that if the entrepreneur who pays the price satisfies all the requirements (the time and time of payment shall be separately stated in the contract, etc. between the parties to the transaction; the person who is supplied the goods or services shall be issued a tax invoice at the time of the request for the price; the period between the time of request for the price and the time of payment shall be within 30 days) under the following subparagraphs, the entrepreneur who pays the price shall be deemed to have issued a tax invoice prior to the arrival of the time of supply for

With respect to the instant case, the part concerning the OOO(OO - OOO(hereinafter “instant tax invoice”) among the tax invoices of October 18, 2011 (hereinafter “OOOO”) is issued for the portion not yet supplied, and is falsely stated. Thus, if an input tax amount is to be deducted by the instant tax invoice issued without payment prior to the actual time of supply for the service as above, there must be grounds under Article 54(2) or (3) or Article 60(2)2 or 3 of the Enforcement Decree of the Act. First, since the instant tax invoice was issued prior to the time of supply, it does not fall under Article 60(2)3, since it does not fall under Article 60(2)3, and thus, it does not fall under Article 54(2), and thus, it does not fall under Article 54(3) of the Enforcement Decree of the said Act since the Plaintiff, who is an entrepreneur, did not meet all the requirements of each subparagraph of Article 54(3).

On the other hand, in order for the instant tax invoice to constitute a case where there is a reason under Article 60(2)2 of the Enforcement Decree of the Act, part of the requisite entries of the tax invoice should be the case where there is an error. There is no evidence to acknowledge that the requisite entries of the tax invoice of this case are entered by mistake, and barring any special circumstance, it does not constitute the above reasons.

2) Determination on the Plaintiff’s first argument

On the other hand, a tax invoice is an evidentiary document to determine value-added taxes, which is to ensure the authenticity of the documentary evidence. In addition, under the current VAT system adopting the predevelopment Tax Credit Act, the tax invoice system has the function of mutual verification between taxpayers that facilitate the dissemination of income tax and corporate tax as well as value-added tax by exposing transactions between the parties. Thus, a tax invoice prepared and issued differently from the actual time of supply should, in principle, be denied, unless there is any reason prescribed in Article 54 of the Enforcement Decree of the Act. However, even if a tax invoice is issued after the time of supply after the time of supply, if it is delivered within the taxable period to which the time of supply belongs, taking into account the frequent transaction situation where the tax invoice is paid by the seller, and in such a case, the purchaser shall bear the burden of receiving penalty tax pursuant to Article 22(4)1 of the Act and Article 70-3(4) of the Enforcement Decree of the Act.

On the other hand, in the case of this case, even if a tax invoice was issued prior to the time of supply, it is true that there is no provision that deducts the input tax amount as above, and there is no need to protect the purchaser, as well as that the tax invoice issued prior to the time of supply is confirmed to have been supplied and paid within the same taxable period, if an input tax deduction is allowed solely on the basis that the tax invoice was issued after the time of supply, it would result in guaranteeing that the purchaser would enjoy unfair benefits to be refunded in advance, even if the actual transaction is confirmed within the same taxable period, even if the tax invoice was issued during the same taxable period, and then the tax invoice is not treated equally, since the Plaintiff’s assertion on this part is without merit.

3) Judgment on the second assertion by the Plaintiff

However, Article 54 (2) of the Enforcement Decree of the Act explicitly provides that "if an entrepreneur issues a tax invoice prior to the arrival of the time of supply for goods or services and receives the price within seven days from the date of issuance of the tax invoice, it shall be deemed that a tax invoice has been issued pursuant to Article 16 (1) of the Act." Thus, the above explicit provision should be interpreted differently from the language and text, or there is no ground to regard it as a provision of decoration, the Plaintiff’s assertion on this part

4) Judgment on the third assertion by the Plaintiff

In light of the above, there is no evidence to acknowledge that the requisite entry of the tax invoice of this case is entered by mistake, and there is a need to treat differently from the case where a tax invoice is issued after the time of supply, as in the case of this case, the disposition of this case constitutes excessive prohibition, violation of the principle of good faith, or abuse of collection right, or violation of the standard of interpretation of the tax law under Article 18 of the Framework Act on National Taxes. Thus, the plaintiff's assertion on this part is without merit.

5) Sub-decisions

Therefore, since the tax invoice of this case is written differently from the facts, the deduction of the input tax amount should be denied, so the disposition of this case is legitimate.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.