Issuing Zero-Rate Tax Invoices and Purchase Confirmations for Payments Split into Down Payment, Intermediate Payment, and Balance

Question

Our company (B, the exporter) purchases finished goods from a domestic manufacturer (A) and exports them overseas. Company A wishes to obtain proof of indirect export performance, so we intend to issue a Purchase Confirmation. The payment for the goods is being made in installments: a down payment, an intermediate payment, and a final balance. Currently, Company A has issued a standard tax invoice for the down payment instead of a zero-rate tax invoice. In this case, to facilitate the issuance of the Purchase Confirmation and Company A's proof of indirect export performance, I would like to inquire about the following: Should we cancel the previously issued down payment invoice and re-issue zero-rate tax invoices for the total amount of the goods? Or, can we correct the down payment invoice to a modified zero-rate tax invoice and then issue separate zero-rate tax invoices for the intermediate and final payments? Furthermore, if we issue them separately, must we also issue the Purchase Confirmation three separate times?

tflow_expert · Answer

1. As a rule, tax invoices should be issued at the time of supply; however, if payment is made in advance as a down payment or similar, a pre-issued tax invoice can be issued at the time of the down payment. Additionally, if a Purchase Confirmation is issued prior to the date of purchase, a zero-rated tax invoice can be issued. In other words, if a Purchase Confirmation is issued in advance before the purchase date and a down payment has been made, a zero-rated tax invoice can be issued for that amount. 2. A Purchase Confirmation can be issued once for the total contract amount, and within that scope, it is possible to issue zero-rated tax invoices divided into down payments, interim payments, and final balances. 3. General tax invoices issued before the issuance of a Purchase Confirmation can be re-issued as zero-rated tax invoices after the Purchase Confirmation is issued.

Issuing Zero-Rate Tax Invoices and Purchase Confirmations for Payments Split into Down Payment, Intermediate Payment, and Balance

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