Offset — Netting mutual receivables
Offset is a method of extinguishing mutual obligations when two parties owe each other. Instead of paying separately, amounts are netted and only the difference is paid.
Definition
Offset is a method of extinguishing mutual obligations when two parties owe each other. Instead of paying separately, amounts are netted and only the difference is paid.
Details
Done via a written offset statement signed by both parties. Requirements: receivables must be due, same kind (monetary) and liquid. Offset is a legal payment method and has no VAT effect (VAT was already calculated on original invoices). Common in construction and trade.
Example
Client owes you 100K MKD (your invoice), you owe them 60K MKD (their invoice). You do an offset: 100K − 60K = client pays only 40K MKD.