Handling Local Purchase Confirmations when Export Value falls below Purchase Price due to Exchange Rate Fluctuations
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Due to exchange rate fluctuations, the export value has become lower than the raw material purchase price. For example, the raw material purchase price is 100 KRW, but the export value is 90 KRW (the export value decreased due to exchange rate changes), and the electronic tax invoice for the purchase was issued for 100 KRW. When preparing the Local Purchase Confirmation, I entered the export value as 90 KRW and lowered the raw material purchase amount to 90 KRW (since I was told a Local Purchase Confirmation cannot be issued if the purchase amount is higher than the export value). However, in the tax invoice registration field, I entered the issued amount of 100 KRW, and the Local Purchase Confirmation was successfully issued. The supplier is asking if there will be any tax issues because the tax invoice amount and the Local Purchase Confirmation amount are different. I am inquiring for guidance on this matter.
Answer 1
- 0✓Generally, since export amounts are calculated by adding a margin to the purchase price, it is uncommon for the export amount to fall below the purchase price due to exchange rate fluctuations. Regarding the amounts on the Purchase Confirmation and the zero-rated tax invoice, the tax invoice amount cannot exceed the amount issued on the Purchase Confirmation. In practice, if tax issues arise later, you can either explain and seek recognition that the Purchase Confirmation amount decreased due to exchange rates, or you can separate the tax invoices by issuing zero-rated tax invoices only within the scope of the Purchase Confirmation amount and issuing regular tax invoices for the remainder. The latter approach is considered preferable.Machine translated
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