Dear business partner,

We would like to inform you about a change in our compensation process for the Inventories, Retails & Warranty Claim (“IRW Claims”) which are operated through the Tavant system.

Current IRW claim process (“as-is”)

As you are aware, any IRW Claim made by our business partners is administrated through the Tavant system. After the review and acceptance of an IRW claim, Doosan Bobcat EMEA (“Bobcat”) issues a “credit note” to the respective business partner. The credit note is in substance a discount provided by Bobcat for previous supplies and the credit note is then offset against outstanding payables from the respective business partner to Bobcat.

New IRW claim process (“to be”)

As part of a process improvement initiative, we are changing the format of our settlement document which is issued to you in respect of approved warranty claims. Instead of sending you a credit note, we will issue an invoice to ourselves on your behalf. This is a common European approach to similar transaction types and is known as a “Self-Billing” process which is compliant with the EU VAT Directive. In summary, the new IRW claim process will be the following:

1. Step: IRW Claim is raised by a Bobcat business partner in Tavant system (no change).
2. Step: IRW Claim is reviewed and approved by Bobcat’s warranty team (no change).
3. Step: Bobcat issues a „self-billing“ invoice on behalf of the business partner for the approved warranty services. Issuing an invoice on your behalf means that we will record an Accounts Payable transaction instead of an Accounts Receivable transaction.
4. Step: The IRW Claim will be paid to your bank account within 14 days. In the view that EMEA Doosan Bobcat standard payment terms are Net 60 days, we believe that this should be acceptable on your side.

From a business operation perspective, there should be no change and you should be able to operate and submit your warranty claims as usual.

The expected go-live date for the new IRW billing process is on February 1^st, 2022.

Cooperation required from your side

A – Legal agreements

The self-billing invoice will be issued by Bobcat on behalf of your company according to the Self-Billing Agreement which is already the Schedule E of your Distributor Agreement. In case that such Self-Billing Agreement is not yet signed, you will be contacted by our legal team to proceed with its signature.

The IRWS Claims and “Self-Billing” process is not subject to a payment deduction or a set-off against Bobcat accounts receivables.

Therefore, it is important that our business partners continue to comply with Article 10.12 (Set-off) stating that the Distributor agrees that it shall make no deduction or set-off against sums due to Bobcat unless Bobcat has issued a credit note in the amount of such deduction or set-off.

In case of doubt, please, contact your regional EMEA cash collections coordinator.

B – Bank account details

We will have to collect and validate your bank account details to which you would like to receive the compensation for the warranty claims. Please provide your bank account details to the following e-mail address: demea.funding@doosan.com

We will need to collect the following information:

• Legal entity name (inc. legal status eg. LTD, PLC, SRO, GMBH etc.)
• Bank name and
• Bank branch name
• BIC/SWIFT CODE
• IBAN
• Sort Code (UK – GBP accounts ONLY)
• Account Number (Accounts outside EEA only (except UAE as IBAN is used in UAE)

Our internal rules require bank account validation is two-steps process. Therefore, after you provide us your bank account details, you will be contacted by your usual business representative and they will ask you to validate the bank account information by phone.

C – VAT reporting

The warranty repairs performed by our business partners on behalf of Bobcat represent taxable supply from the perspective of the EU VAT Directive. Bobcat will report these transactions in it’s VAT return as intracommunity services received from our business partners.

For all EU-based business partners, it will be important to download the self-billing invoices from the Tavant system on a regular basis (monthly or quarterly, depending on your VAT reporting period) and include these transactions into the relevant VAT reports according to the VAT legislation applicable in your country. For non-EU business partners, please follow the rules according to your domestic regulations.

In case that you have any queries related to the new IRW claim process, please, contact your usual Bobcat business partner.

Yours faithfully,

Insu Jung
Vice President Finance