Feasibility of issuing a secondary Purchase Confirmation for services (processing of exported goods)
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I am inquiring regarding a request to issue a Purchase Confirmation for services. The transaction structure is Company A → Company B (our company) → Company C (subcontractor, service provider). Company C has requested Company B to issue a Purchase Confirmation to prove their indirect export performance. Both B and C are domestic companies, they transact in KRW, and tax invoices are being issued at a zero tax rate. When our company issues the Purchase Confirmation, I would like to inquire whether we can issue it by using the Purchase Confirmation issued to us by Company A as the supporting evidence for export.
Answer 1
- 0Generally, a secondary purchase confirmation can be issued based on a primary purchase confirmation issued by the exporter. In the case of processing services for export goods, to apply the zero tax rate under the Value Added Tax Act, you must either enter into a direct subcontracting agreement or issue a purchase confirmation. If the services you receive fall under processing services for export goods, you can apply the zero tax rate by issuing a purchase confirmation. However, since whether a service qualifies depends on the interpretation of tax laws, please consult with your tax accountant.Machine translated
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