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  • Interpretation
  • No.757【Supplementary Interpretation of J.Y. Interpretation No. 706】
  • Date
  • 2017/12/15
  • Issue
    • Whether the Petitioner of J.Y. Interpretation No. 706 can directly use the payment receipt issued by the Execution Court as input tax certificate?
  • Holding
    •     In respect of the resulting case of J.Y. Interpretation No. 706, the Petitioner of this Interpretation may, within three months of the service of this Interpretation and in accordance with the meaning and purpose of J.Y. Interpretation No. 706, use the court-issued receipt indicating the type and price of the auctioned or sold goods or the payment receipt attaching the auction record indicating the type and price of the auctioned or sold goods as input tax certificate and apply for the deduction of output tax. J.Y. Interpretation No. 706 shall be supplemented as such.
  • Reasoning
    •     The Petitioner Yung An Leasing Co. Ltd was the Petitioner of J.Y. Interpretation No. 706 (hereinafter “Concerned Interpretation”). After the publication of the Concerned Interpretation, the Petitioner filed an action for retrial with the Supreme Administrative Court in light of the Concerned Interpretation. The Supreme Administrative Court 2013-Pan-Tze 212 judgment (hereinafter “Final Judgment 1) opined that “the retrial plaintiff (note: the Petitioner of this Interpretation) was not entitled by J.Y. No. 709 to directly use vis-à-vis the retrial defendant (note: National Taxation Bureau of Taipei, Ministry of Finance) the Panchiao District Court-issued payment receipt as input tax certificate and deduct output tax”, and overruled the action. The Petitioner objected to the judgment, and filed another action for retrial. The Supreme Administrative Court 2013-Pan-Tze 736 judgment (hereinafter “Final Judgment 2) opined that the previous retrial judgment was not in error and overruled the action. The Petitioner objected to the judgment again, and filed the other action for retrial. The Supreme Administrative Court 2014-Chai-Tze 235 ruling (hereinafter “Final Ruling”) opined that at the time of filing the action for retrial, 5 years had lapsed since the original judgment (Supreme Administrative Court 2008-Pan-Tze 63 judgment) became final and binding, and therefore the action for retrial was illegal and overruled.
      
    •     The Petitioner separately applied for the setoff of overpaid business tax on 19 March 2014. The Daan Branch, National Taxation Bureau of Taipei, Ministry of Finance rejected the application by its 2014.4.21 Tsai-Bei-Kuo-Shuei-Da-An-Ing-Yeh No. 1030458069 letter. The Petitioner objected to the decision, and brought an administrative appeal to the Ministry of Finance. The Ministry of Finance 2014.8.27 Tai-Tsai-Shu No. 10313940740 administrative appeal decision (hereinafter “Administrative Decision”) opined that before the publication of J.Y. Interpretation No. 706, the Petitioner was consigned goods which were subject to business tax, the matter for the deduction of output tax from input tax had been brought up for administrative remedy and been finally overruled; according to Ministry of Finance 2014.1.7 Tai-Tsai-Shuei No. 10204671351 order, the court-issued payment receipts cannot be used as input tax certificate to deduct output tax; as a result, the administrative appeal should be overruled (Note 1).
      
    •     The Petitioner argued that the aforesaid Final Judgments 1 and 2 piecemeal selected the wording of the Reasoning of the Concerned Interpretation “the relevant authorities shall have discussions as soon as possible … shall, in accordance with Item 3 Article 33 of the Business Tax Act, approve the eligibility … as the input tax certificate of the buyer business entity”, and misunderstood the essence of J.Y. Interpretation No. 706 which was to declare the regulations unconstitutional, and contradicted the important purpose of the Concerned Interpretation which was to allow the resulting case to seek for retrial or other remedies. The Petitioner thus petitioned for supplementary interpretation. 
      
    •     A petition filed by a party for a supplementary interpretation of the ambiguity of a J.Y. Interpretation as applied by a final binding judgment shall be accepted if there are legitimate grounds (see J.Y. Interpretation Nos. 503, 741, and 742). The current Petitioner’s business tax deduction matter had been judged by the Final Judgments 1 and 2 in the light of the Concerned Interpretation. However, the Concerned Interpretation did not expressly indicate whether the Petitioners of the resulting cases may directly use the court-issued payment receipts as input tax certificate of the buyer business entity such that some of the Petitioners of the Concerned Interpretation could not be granted remedies. It is considered that the petition has legitimate grounds and shall be accepted. This Interpretation is thus made. The reasons are as follows:
      
    •     The J.Y. Interpretations have the binding effects on every government agency and person of the country. When dealing with relevant matters, each government agency shall abide by the meaning and purpose of the Interpretations. In addition, the Interpretations as resulted from people’s petitions shall be applicable to the resulting cases of the applications (see J.Y. Interpretation Nos. 177 and 185). The Petitioner of the resulting case may, from the date of publication of the Interpretation, exercise his rights in accordance with the favorable Interpretation such that the rights and interests of the Petitioner who petitioned for constitutional interpretation will be protected and his contributions to the preservation of the Constitution will be affirmed (see J.Y. Interpretation Nos. 725 and 741).
      
    •     The Reasoning of the Concerned Interpretation “the auction or sale procedure administered by the Execution Court in accordance with the law is rigorous. There is public faith in the receipts of non-government unified invoices. The business tax included in the auctioned or sold price may be ascertained in accordance with the statutory formula. Relevant information may be verified by the above court record (see Article 10, Business Tax Act, Points 2 and 4, Handling Notes for Levying Business Tax for Court-, Administrative Execution Agency- or Customs-auctioned or -sold Goods; Item 22, Article 4, Usage Rules for Government Unified Invoices). Therefore, the receipt issued by the Execution Court to the buyer business entity upon receipt of the auctioned or sold price amounts to a certificate issued by a seller business entity” has binding effects on every government agency and person of the country. By way of this, the Petitioner of the Concerned Interpretation may, as a remedy, use the court-issued receipts indicating the type and price of the auctioned or sold goods or the payment receipts attaching the auction record indicating the type and price of the auctioned or sold goods (Note 2) as the input tax certificate and apply for the deduction of output tax.
      
    •     As to the Reasoning of the Concerned Interpretation “based on the meaning and purpose of this Interpretation, the relevant authorities shall have discussions as soon as possible, and the Ministry of Finance shall, in accordance with Item 3, Article 33 of the Business Tax Act, approve the eligibility of court-issued receipts, which indicate the type and price of the auctioned or sold goods or to which the court record indicating the type and price of the auctioned or sold goods has been attached, as the input tax certificate of the buyer business entity” , its purpose is to require the relevant authorities to apply more concrete general standards in dealing with other cases similar to the Petitioner’s. It shall not prejudice the Petitioner’s rights to directly use the court-issued receipts indicating the type and price of the auctioned or sold goods or the payment receipts attaching the auction record indicating the type and price of the auctioned or sold goods as the input tax certificate and apply for the deduction of output tax in accordance with the meaning and purpose of the Concerned Interpretation. However, the Petitioner of the Concerned Interpretation cannot offset the tax by way of litigations (see Final Judgments 1 and 2) or resubmission of tax filing to the tax authority (see Administrative Decision). The rights and interests of the Petitioner who petitioned for constitutional interpretation are not protected and his contributions to the preservation of the Constitution are not affirmed. It is therefore so supplementarily interpreted as the Holding by reference to the J.Y. Interpretation 747.
      
    •     As to the amount of the input tax amount which is deductable from the output tax amount in the resulting case of the Concerned Interpretation, of course it shall be calculated by the tax authority by reducing the already deducted amount as approved (see Songshan Branch, National Taxation Bureau of Taipei, Ministry of Finance 2015.8.1 Tsai-Bei-Kuo-Shuei-Shon-Shan-Ing-Yeh No. 0940017835). It is so pointed out concurrently.
      
    •     On a separate note, the Petitioner also petitioned for the supplementary interpretation of Paragraph 2, Article 28 of the Tax Collection Act and for the supplementary interpretation on the basis of the Final Ruling. However, Paragraph 2, Article 28 of the Tax Collection Act was not the subject of the Concerned Interpretation, and the Concerned Interpretation was not applied by the Final Ruling, the petitions were inconsistent with the Sub-paragraph 2, Paragraph 1, Article 5 of the Constitutional Interpretation Procedure Act, and both shall not be accepted in accordance with Paragraph 3 of the same Article. It is so explained concurrently.
      
    • Note 1: The Petitioner filed an administrative action in accordance with Paragraph 2, Article 28 of the Tax Collection Act to claim the return of overpaid tax and the interest accrued thereon. The Taipei Administrative High Court overruled the action. The Petitioner objected to the judgment, and appealed. The Supreme Administrative Court 2015 Tsai-Tze 873 ruled that the appeal was illegal and overruled. The Petitioner did not petition for the interpretation based on the said judgment and ruling.
      
    • Note 2: Ministry of Finance 2014.1.7 Tai-Tsai-Shuei No. 10204671351 order listed the following three items as input tax certificates: 1. Copy of certificate of concluded auction of movables or certificate of transfer of immovables, 2. Copy of payment receipts, 3. where payment below the auctioned price in the case of assumption by creditor, the insufficient amount may be substituted for by the copy of allocation sheet under compulsory execution or the allocation sheet of execution income.
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