VATFIN3235 - Credit, debts and related services: debts and related services: forfaiting
Description of service
Forfaiting, or 바카라 사이트˜without recourse바카라 사이트™ financing, is a method of trade finance whereby the forfaiter (normally a bank) purchases, on a 바카라 사이트˜without recourse바카라 사이트™ basis (see VATFIN3215), unconditional debts which have arisen from a supply of goods and/or services. It is most often used where goods and/or services are exported.
Forfaiting works as follows:
- An exporter agrees to sell to the forfaiter its rights to the payments to the export in return for a discounted cash payment. This means that the exporter no longer bears the risk of non-payment by the importer and/or the guarantor of that importer.
- In exchange for the payment, the forfaiter takes over the exporter바카라 사이트™s debt and assumes the risk on the payment from the importer and/or the guarantor.
Supply and liability
The sale of the debt from the exporter to the forfaiter is exempt under Group 5, item 1. If the forfaiter then sells on that debt that supply is also exempt under Group 5, item 1.
If the forfaiter holds on to the debt until maturity any income realised from the debt is not consideration for any supply.