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Payment Policy

Prague POS Payment Policy

 

Background

 

1.       POS is purchased and supplied by Prague POS center. Legally and fiscally this activity belongs to Brown-Forman Czech & Slovak Republics, s.r.o. (BFCS). Fiscal rules do not allow BFCS to expense POS material supplied to other markets directly - the expense would be tax non-deductable for corporate income tax and VAT of 21% would need to be expensed on top of the purchase price. Therefore POS shipments from BFCS need to be invoiced out, either to a Brown-Forman entity, or to a third party distributor that will actually use the POS material. The ship-to may or may not be the same as the invoice-to.

2.       The invoice-to always needs to pay the POS invoice to BFCS within the payment term stated on the invoice.  

3.       For correct fiscal treatment, it is critical to identify the correct invoice-to before the shipment is made. Depending on the relation between invoice-to and ship-to, the Czech output VAT is applied and reported. The typical scenarios are following:

a.       Invoice-to and ship-to are based in the same EU country and invoice-to has an EU VAT number: no Czech VAT is applied, both BFCS and invoice-to need to report the shipment in INTRASTAT

b.      Ship-to is outside EU, export of the POS from EU is proved by customs documents. Then no Czech VAT output is applied, regardless of invoice-to location, and zero export VAT is reported.

c.       Shipment is sent from the supplier directly to the final ship-to while BFCS is invoiced by the supplier and then issues an invoice to the final invoice-to. VAT treatment needs to be assessed individually.

d.      Ship-to is in one EU country but invoice-to is in another EU country or outside EU. The Czech VAT of 21% may need to be applied which would not be recoverable, actual VAT treatment needs to be assessed individually.

 

Responsibility of Marketing Managers

 

1.       Before you place an order for POS to BFCS, contact internally the Finance Manager responsible for the respective market to verify the invoicing scheme for the required ship-to.

 

Responsibility of Finance Managers

 

1.       For the given market / ship-to, provide or confirm the invoice-to details to the POS center (currently katerina_pokorna@b-f.com):

a.       Legal name and address

b.      EU VAT number, if applicable

c.       Contact person to whom the invoice is to be sent electronically for processing and payment.

 

Responsibility of the POS team

 

1.       Shipment will not be sent without confirmed invoicing details as above

2.       Confirm the correct VAT treatment for scenario 3c and 3d above with the local accounting team

 

Write off policy

 

1.       In the event that an outstanding balance has to be written off, the value of the amount, along with the unavoidable tax implications (CIT of 19%, possibly also VAT of 21%) will be journaled to that market

2.       At the beginning of a new fiscal year, any amount that is beyond 180 days past due & has had 3 unanswered requests for payment, will be written off