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Feasibility of issuing a Local L/C (Purchase Confirmation) for retroactive unit price adjustments on past exports

Machine translated
Our company operates as an intermediary trader, purchasing goods from Korean suppliers and exporting them to overseas clients. We currently issue Purchase Confirmations (Local L/C) to our suppliers to record purchases at the zero tax rate. Due to rising inflation, our purchase unit prices have increased. Consequently, an agreement has been reached between our supplier and our client to retroactively apply these price increases to past export shipments (those occurring after a specific point in time). My question is whether it is possible to issue a Purchase Confirmation for these agreed-upon retroactive adjustments. The supplier wishes to issue a zero-rated tax invoice since this represents an increase in the cost of goods. Since we export every month, we could, for example, issue a separate invoice for the retroactive amount during a specific month's export. We could then process export declarations for both the original goods invoice and the retroactive adjustment invoice, which would allow us to prove our export performance. However, I would like to know if these retroactive adjustments qualify as eligible subjects for the issuance of a Purchase Confirmation.

Answer 1

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    If you proceed with the export for the relevant month including the retroactive amount, and that amount is included in the export permit, it is judged that a purchase confirmation certificate including the retroactive amount can be issued based on that export permit.
    Machine translated
    tflow_expertLv.1Intern

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