Whether Zero-Rated Tax Invoices and Purchase Confirmations Can Be Issued for Packaging Services
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I am inquiring regarding tax invoices and Purchase Confirmations. The transaction structure is as follows: a subcontractor packages and supplies (sells) goods, our company purchases these goods and sells them domestically, and the final customer exports them. We issue the invoices to the subcontractor via reverse invoicing, issuing one invoice for the goods and one separate invoice for the packaging services (including packaging material costs). In this case, I would like to inquire: ① whether the invoice for packaging services (including packaging material costs) can be issued as a zero-rated tax invoice, and ② whether a Purchase Confirmation can be issued by treating this as an indirect export since the goods are ultimately exported.
Answer 1
- 0In the case of processing services for export goods supplied under a local LC or a purchase confirmation, a zero percent VAT rate can be applied (Article 33, Paragraph 2, Item 3 of the Enforcement Decree of the Value Added Tax Act). If your company's packaging services fall under processing services for export goods, and if your company receives a purchase confirmation from the exporter and subsequently issues a secondary purchase confirmation to the packaging company based on that, it is considered possible to issue a zero-rated tax invoice.Machine translated
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