Value-added tax invoice is the legal evidence of value-added tax input deduction, "Invoice Management Measures" clearly stipulates the requirements of invoicing, but in practice, there are many cases in which the payer's rights and interests of deduction are impaired due to the payee's failure to issue invoices, and some of the payers have filed a civil lawsuit, or requested the payee to issue invoices or requested the payee to compensate for the losses arising from the invoices not being issued for deduction. Judicial practice of such cases are not consistent, the author will analyze the referee case as an entry point, and discuss how to protect the rights and interests of the payee deduction, for readers' reference.

I. Introduction of Cases

(I) Case 1: does not support the payer's request for compensation from the payee for the tax loss caused by the failure to invoice

Plaintiff Company A is a production enterprise engaged in steel structure manufacturing, and purchases steel for production and processing from Defendant Company B all year round.In May 2019, after checking between the two parties, Chen, the legal representative of Company B, issued a note to Company A stating that it had not yet issued a VAT invoice of RMB 4 million yuan (which had been paid by the Plaintiff) to the Plaintiff. Based on the note, Company A sued the court, requesting the defendant to compensate for the loss of tax credit caused by the refusal to issue 4 million yuan of VAT invoices.

The Court of First Instance held that when a general taxpayer sells goods or provides taxable labor services, it should issue VAT invoices to the buyer, and the buyer should offset the VAT input tax. However, the failure to issue VAT invoices for the sale of goods or the provision of taxable services to the purchaser only resulted in the temporary non-deductibility of VAT input tax, and did not lead to the loss of the purchaser's property. The plaintiff claimed 4 million yuan of uninvoiced amount, because the defendant has not yet lost the qualification of issuing VAT invoices, the plaintiff is still pending the defendant to issue VAT invoices to deduct VAT input tax, the defendant's failure to issue invoices did not result in the loss of the plaintiff's property, so it does not support the plaintiff's litigation request.

The plaintiff appealed. The court of second instance, the plaintiff and the defendant of the sale contract is based on the true meaning of the two sides, does not violate the provisions of the law, should be valid. The focus of the dispute is whether the defendant company b should bear the responsibility for the loss of invoices. Company B sells goods and collects the payment of tax is its legal obligation as a taxpayer, it should issue the corresponding invoice to company A according to law. In accordance with the provisions of the Measures for the Administration of Invoices, if the invoices should be issued but are not issued, or if the invoices are not issued in accordance with the prescribed time limit, order and columns, and all the invoices are issued at one time, the tax authorities shall order rectification, and may impose a fine of less than RMB 10,000 yuan; and if there is any illegal income, it shall be confiscated. Company B failed to issue invoices in accordance with the specified time limit, according to the provisions of the tax authorities should be ordered to make corrections, and make corresponding penalties, so the behavior of Company B does not necessarily lead to the economic losses incurred by Company A. Company A claimed that Company B failed to issue invoices in a timely manner. Company A claimed that Company B failed to issue VAT invoices in time, resulting in its loss of tax deduction, insufficient evidence and lack of factual and legal basis. The court of second instance rejected the appeal and upheld the original judgment.

Company A was not convinced and filed for retrial. The court held that the seller of a sales contract issued VAT invoices to the buyer, which was a legal obligation under the tax law of China. Company A claimed that Company B did not issue VAT invoice of 4 million Yuan to it, which was a kind of illegal tax evasion and should be reported to the competent tax authority to solve the problem according to the law. Now Company A crosses the tax authorities and claims losses directly to Company B without factual and legal basis, therefore, Company A's application for retrial is rejected.

(II) Case 2: Supporting the payer's request for the payee to compensate for the tax loss caused by non-invoicing

In May 2018, Plaintiff Company C and Defendant Company D entered into a subscription contract whereby Company C purchased smart bracelets from Company D. Company C has paid for the smart bracelets and Company D has paid for the smart bracelets. Company C made the payment and Company D supplied the goods as agreed. on November 16, 2018, Company C sent an email to Company D urging Company D to issue a full amount of VAT invoice to Company C before December 17, 2018 in relation to the ordering contract. As the Defendant never issued the invoice, the Plaintiff filed a lawsuit to the Court seeking compensation for the loss of tax credits due to the Defendant's failure to obtain the invoice. The Plaintiff argued that the Defendant failed to issue VAT invoices to it in time, which resulted in its inability to offset the corresponding VAT payment and its overburdened losses of urban maintenance and construction tax and education surcharge. The Defendant, on the other hand, argued that it had not issued VAT invoices to it because the legal representative of its upstream supplier had been subjected to compulsory measures in connection with a criminal offense of illegal fund-raising, and that the issuance of invoices could be dealt with after the criminal case had been dealt with.

The court of first instance held that the ordering contract signed by the plaintiff and the defendant company was a true expression of the parties' real intention, and its content and form did not violate the mandatory provisions of national laws and administrative regulations, and should be legal and valid. According to the ordering contract, the electronic equipment smart bracelet is the taxable goods of value-added tax (VAT) in our country, the seller should issue VAT invoice to the buyer according to the relevant provisions of the tax law, the invoice can be used as a proof of the buyer's VAT input amount, and the buyer's VAT input amount can be offset with the seller's VAT output amount, so as to reduce the buyer's tax burden. If the seller failed to provide the buyer with the VAT invoices in full and in time, the buyer could not enjoy the legal benefits of input tax deduction in accordance with the law, and the buyer was required to pay additional taxes such as urban maintenance and construction tax for the undeductible portion of the VAT invoices. In this regard, the court of first instance that the existing evidence is sufficient to prove that the company did not issue VAT invoices in accordance with the contract has led to the company can not deduct the corresponding input tax, but also need to pay the corresponding part of the urban maintenance and construction tax, education surcharge, local education surcharge, constitutes a violation of the contract; defendant d's defense of the relevant lack of factual and legal basis, not be adopted. Therefore, the plaintiff requested the defendant to compensate for the loss of value-added tax, urban maintenance and construction tax, education surcharge and local education surcharge due to the defendant's failure to issue VAT invoices according to the contract.

Defendant Ding Company appealed. The Court of Second Instance upheld the view of the original trial and held that Company Ding failed to issue VAT invoices to Company C, so it should compensate for the loss of VAT, urban maintenance and construction tax, education surcharge and local education surcharge, and therefore rejected Company Ding's appeal.

II. the views of the dispute: the payee is not fully invoiced, the payer can file a civil lawsuit to claim the loss of tax credits?

(I) The issuance of invoices is the legal obligation of the payee

The above two precedents show the two main views in the current practice. The first point of view that the payee should issue invoices is the "invoice management measures" obligations, if the payee does not issue invoices, should be ordered by the tax authorities to make corrections and may impose a fine. That is, the recipient can be reported to the tax authorities to obtain invoices, the recipient fails to issue the corresponding invoices in accordance with the provisions of the time limit does not necessarily lead to the payer to produce economic losses. In practice, there are similar views, if the court ruled that the payee to pay money to compensate for its failure to invoice the payer to bring the loss of tax credits, that is, judicial intervention in the administration - the payee itself has the obligation to invoice. In the author's view, for the payer, as an invoicee to obtain invoices for VAT input deduction; for the payee, in the tax control by invoice, invoicing is one of the bases for declaring income and calculating output tax, and the failure to issue invoices destroys the order of national invoice management, and it has the risk of concealment of income and evasion of tax.

(II) Whether the claim for issuing invoices belongs to the scope of the court's jurisdiction?

In addition to claiming tax loss to the court, there are payers claiming to the court to request the payee to issue invoices. In the current judicial practice, for whether to support the payer through civil litigation to request the contracting parties to issue invoices formed different views. The first point of view support through civil litigation request for invoices, that the invoice belongs to the parties to fulfill the civil and commercial contracts in the ancillary obligations, the parties based on the contract or the contract of the ancillary obligations of the payee to request invoices, should belong to the people's court to hear civil and commercial cases within the scope of the case, the payee to issue invoices is the obligation of the tax law, but at the same time the payee invoices issued by the payee is a proof of receipt, so the The payer has the right to request the payee to issue the invoice as a receipt, which is not in conflict with the payee's failure to issue invoices in accordance with the relevant provisions of the Tax Law and should bear the corresponding administrative penalties. Another viewpoint that, "tax collection and management law", "invoice management measures" and other laws and regulations clearly stipulate that the tax authority is the competent authority of the invoice, the invoice should be issued in accordance with the provisions of the tax authorities, the payer can be in accordance with the law to the tax authorities, complaints, reports, etc., handled by the tax authorities in accordance with the law, not by the people's court in charge of, which is the difference between civil and commercial and tax administrative legal relations. This is also the difference between civil and commercial legal relations and tax administrative legal relations.
In the author's view, the payee to issue invoices is both public law obligations, but also private law legal obligations, the two are not contradictory, the court can not be based on the issuance of invoices belongs to the obligations under the tax law, dismissed the party's litigation request. Therefore, regarding whether one party to the contract should issue invoices, even if there is no explicit agreement when signing the contract, one party also has the right to sue the people's court to require the other party to issue invoices.

(III) Attention should be paid to the time limit for the issuance of invoices and credits

The court in the aforementioned Case I held that "since the defendant has not yet lost the qualification of issuing VAT invoices, the plaintiff still has the right to offset VAT input tax after the defendant has issued VAT invoices, which has not resulted in the plaintiff's property being lost, so it does not support the plaintiff's litigation request to demand the defendant to compensate for the loss of offset due to the failure to issue invoices ". The author believes that the premise of this view is the recipient can make up the invoice, and the payer to obtain the invoice can be certified credit, here involves the invoice and credit time limit. Invoice Management Measures" stipulates that the invoice should be issued in accordance with the prescribed time limit, but for the invoice time without restrictive provisions. As to whether the payer can make VAT input deduction by obtaining the reissued invoice, the Announcement on Cancellation of VAT Deduction Voucher Authentication Confirmation Deadline and Other VAT Levy and Management Issues (Announcement of the State Administration of Taxation No. 45 of 2019) cancels the restriction on the authentication time for VAT special invoices issued on or after January 1, 2017, whereas for the VAT special invoices, they should be certified in accordance with the time limit specified at that time, otherwise they cannot be offset against tax.
It should be noted that the pre-tax deduction of enterprise income tax has clear provisions for the deduction period of the retroactive invoices, and Article 17 of the Measures for the Administration of Vouchers for Pre-tax Deduction of Enterprise Income Tax makes it clear that "except for the occurrence of the circumstances stipulated in Article 15 of the present Measures, if the enterprise should have obtained but did not obtain invoices and other external vouchers in the previous years and the corresponding expenditures have not been pre-tax deducted in that year, it shall not be possible to obtain the invoices, other external vouchers in the subsequent years. If the enterprise obtains invoices or other external vouchers in accordance with the provisions of Article 14 of these Measures in the following years or provides relevant information that can confirm the authenticity of its expenditures, the corresponding expenditures shall be deducted before tax.

III. the payee does not issue invoices, the payer how to effectively remedy?

(I) Beforehand: clear invoice terms in the sales contract

Although the invoice is the legal obligations of the seller, but in order to avoid disputes over invoicing, can be drawn up in the contract is not on time, the full amount of invoices issued by the breach of contract provisions, constraints on the collection of the invoicing obligations of the recipient's failure to fulfill the behavior of the payer's own legitimate rights and interests of deduction.

(II) During the process: retaining materials proving the authenticity of the business

VAT invoice is not only a proof of VAT input deduction, but also the most important proof of pre-tax deduction for enterprise income tax. Therefore, in order to avoid economic losses caused by the recipient's failure to issue invoices, it is recommended that enterprises keep materials proving the authenticity of the business, such as purchase and sales contracts, bills of lading, payment certificates, bookkeeping vouchers, etc., to support the reasonableness and legitimacy of other deduction vouchers and to realize the deduction of the pre-tax Enterprise Income Tax.

(III) Ex post facto: seeking relief from tax authorities

The Measures for the Administration of Invoices stipulates that "units and individuals selling goods, providing services and engaging in other business activities shall issue invoices to the payer when they receive payments for external business operations", and it also stipulates the behavior of failure to issue invoices, "If a person violates the provisions of these Measures, under one of the following circumstances, the tax authority shall issue an invoice to the person who has violated the provisions of these Measures. One of the following circumstances, the tax authorities shall order rectification, and may impose a fine of less than 10,000 yuan; there is illegal income shall be confiscated: (a) should be issued but not issued invoices, or not in accordance with the prescribed time limit, order, columns, all the joints of a one-time invoice, or not stamped with the invoice seal". Therefore, if the payee fails to issue invoices in time and in full, the payer can reflect the relevant clues to the tax authorities, which will order it to make corrections and issue invoices.