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REPORT (COM(2023)0533 – C90338/2023 – 2023/0323(COD))

On the proposal for a regulation of the European Parliament and of the Council on combating late payment in commercial transactions

A-9-2024-0156

Committee on the Internal Market and Consumer Protection · Rapporteur: Róża Thun und Hohenstein

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Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

Parliament's amended version of the Commission proposal for a regulation on combating late payment in commercial transactions sets a maximum payment period of 30 calendar days, extendable to 60 days by agreement and to 120 days for slow-moving or seasonal goods. It bans contractual terms and practices that abuse freedom of contract against creditors, requires Member States to designate independent enforcement authorities, and sets flat-fee compensation for recovery costs. It introduces annual reporting on payment practices by contracting authorities, a European Observatory of Late Payments, and amendments to the European order for payment and small claims procedures. It defers application by 18 months, with a further 12 months where micro-undertakings are debtors, and requires the Commission to report on implementation four years after entry into force and every three years thereafter.

Committee position. The committee proposes to adopt Parliament's position at first reading with amendments to the Commission proposal, including a 30-day maximum payment period, extensions to 60 and 120 days, bans on abusive terms, independent enforcement authorities, reporting obligations, and a European Observatory of Late Payments.

Key points

  1. The regulation aims to combat late payment in commercial transactions to ensure the internal market works and to foster the competitiveness of undertakings, especially SMEs.
  2. Payments made under insurance contracts are covered by the regulation, while payments as compensation for damages remain excluded.
  3. The payment period must not exceed 30 calendar days from receipt of the invoice or equivalent request, provided the debtor has received the goods or services.
  4. In transactions between undertakings, the payment period may be extended to 60 calendar days if expressly agreed in the contract.
  5. For slow-moving or seasonal goods, the payment period may be extended to 120 calendar days; the Commission must publish technical guidance before application.
  6. Acceptance or verification procedures may be provided for in national law only where strictly necessary, must be described in the contract, and must not exceed 30 calendar days.
  7. Member States must introduce measures to improve public authorities' payment practices, including allowing creditors to offset amounts due against outstanding amounts owed to the same authority.
  8. Creditors cannot waive their right to interest for late payment or to flat-fee compensation when the debtor is a public authority or a large undertaking.
  9. Flat-fee compensation for recovery costs is EUR 50 for transactions valued between 0 and EUR 1 500, EUR 100 for 1 501 to EUR 15 000, and EUR 150 above EUR 15 000.
  10. Contractual terms and practices that exclude or limit the creditor's right to assign credit or use a court executive order, or that prevent or postpone the sending of the invoice, are null and void and prohibited.
  11. Creditors must obtain an enforceable title within 60 calendar days of lodging an action, and Member States must designate independent enforcement authorities with adequate resources.
  12. Contracting authorities must report annually on their payment practices, including amounts paid in specified time bands and average time to pay an invoice, and the Commission must set up a European Observatory of Late Payments.

Who is affected

  • Undertakings and public authorities in commercial transactions: must comply with maximum payment periods and cannot impose prohibited contractual terms.
  • Micro-enterprises and SMEs: benefit from deferred application where they are debtors and from accessible credit management and financial literacy training.
  • Public authorities: must improve payment practices, report annually on payments, and cannot benefit from waiver of interest or compensation.
  • Member States: must designate independent enforcement authorities, promote alternative dispute resolution, and raise awareness of late payment remedies.
  • Retailers of slow-moving or seasonal goods: may agree payment periods up to 120 calendar days for such goods.

Figures and deadlines

  • 30 calendar days: maximum payment period from receipt of invoice or equivalent request.
  • 60 calendar days: extended payment period if expressly agreed in the contract between undertakings.
  • 120 calendar days: extended payment period for slow-moving or seasonal goods.
  • 30 calendar days: maximum duration of acceptance or verification procedure from receipt of goods or services.
  • EUR 50, EUR 100, EUR 150: flat-fee compensation for recovery costs depending on transaction value.
  • 60 calendar days: deadline for creditors to obtain an enforceable title from lodging an action.
  • 18 months: period after entry into force before the regulation applies.
  • 12 months: further deferral for micro-undertakings when they are debtors.

Legal basis: Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union.