In order to deduct input tax from the current VAT system, whether the taxable period to which the date of actual preparation of the tax invoice belongs and the taxable period to which the date of actual transaction belongs should be the same (affirmative)

[1] Articles 16 and 17 (2) 1-2 of the Value-Added Tax Act, Article 60 (2) 2 and 3 of the Enforcement Decree of the Value-Added Tax Act

Supreme Court en banc Decision 2002Du5771 Delivered on November 18, 2004, Supreme Court Decision 2003Du1905 Delivered on November 26, 2004

[Defendant-Appellant] Han Jae-chul et al. (Law Office for Pohang Port and General Law Office, Attorney Lee Jae-soo, Counsel for defendant

Kim head of the tax office

Daegu High Court Decision 2002Nu2957 delivered on May 16, 2003

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

We examine the grounds of appeal.

1. The judgment of the court below

According to the reasoning of the judgment below, the court below acknowledged the facts as stated in its reasoning. Since the Enforcement Decree of the Value-Added Tax Act was amended by Presidential Decree No. 1661 on December 31, 1999, and all or part of the items to be entered under Article 16 (1) 1 through 4 of the Value-Added Tax Act (hereinafter “necessary entry items”) are different from the facts, where the input tax amount is deducted as one of the items to be entered under Article 16 (1) 3 of the Enforcement Decree of the Value-Added Tax Act, and where the tax invoice was issued after the time of supply for goods or services, which provides for "if the tax invoice is delivered within the taxable period to which the time of supply belongs, it shall be newly established and the tax invoice can not be deducted from the other items to be entered under Article 60 (2) 3 of the Enforcement Decree of the Value-Added Tax Act after the expiration of the taxable period to which the time of supply belongs, the court below determined that the provision of this case refusing the request for reduction of the whole entry or exemption of the tax invoice cannot be made within 7 (2).

2. The judgment of this Court

Even in the interpretation of Article 60 (2) 2 of the Enforcement Decree of the Value-Added Tax Act before the enactment of Article 60 (2) 3 of the Enforcement Decree of the Value-Added Tax Act, in order to deduct the input tax amount under the current system of the Value-Added Tax Act to avoid undermining the function of mutual verification by issuing the tax invoice under the same Article, it shall be deemed that the taxable period to which the date of actual preparation of the tax invoice belongs belongs and the taxable period to which the date of actual transaction belongs (in this case, the date of preparation on the tax invoice shall be entered as the date of actual preparation, but shall not be entered retroactively to any actual transaction or any specific period, regardless of whether it is entered as the date of actual preparation). (See Supreme Court en banc Decision 2002Du5771 Decided November 18, 2004)

In light of the above legal principles and the records, the court below's decision that the provision of Article 60 (2) 3 of the Enforcement Decree of the Tax Act is not invalid is just, and there is no violation of law of misunderstanding legal principles as otherwise alleged in the ground of appeal. The ground of appeal cannot be accepted

The court below erred in holding that the input tax amount of the relevant value-added tax is legitimate under Article 60 (2) 3 of the Enforcement Decree of the Enforcement Decree of the Value-Added Tax Act, even if a tax invoice is prepared and delivered retroactively after the time of supply or the expiration of the taxable period, until before the new establishment of Article 60 (2) 3 of the Enforcement Decree of the Enforcement Decree of the Value-Added Tax Act. However, the court below's decision that the disposition of this case

3. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-dam (Presiding Justice)