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Adopted text

Combating late payment in commercial transactions

TA-9-2024-0299 · P9_TA(2024)0299 · PE756.002

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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 a proposed regulation on combating late payment in commercial transactions replaces Directive 2011/7/EU. It caps payment periods at 30 calendar days, allows up to 60 days by agreement and up to 120 days for slow-moving or seasonal goods. It gives creditors automatic interest of the reference rate plus 8 percentage points and flat-fee compensation of EUR 50, EUR 100 or EUR 150 per transaction. It bans contractual terms and practices that breach these rules, requires Member States to designate enforcement authorities, and sets up a European Observatory of Late Payments. It requires public contractors to prove payment of subcontractors and contracting authorities to report yearly on their payment practices.

Key points

  1. The regulation applies to payments between undertakings, and between undertakings and public authorities where the public authority is the debtor, for delivered goods or services.
  2. It excludes consumer transactions, damages compensation, and payments that can be cancelled or waived under insolvency or restructuring proceedings.
  3. Payment periods must not exceed 30 calendar days from receipt of the invoice or, if uncertain, from receipt of the goods or services.
  4. Undertakings may agree in the contract to extend the payment period up to 60 calendar days, and up to 120 days for slow-moving or seasonal goods.
  5. Acceptance or verification procedures may be provided only where strictly necessary under national law and must not exceed 30 calendar days.
  6. In public works contracts, contractors must give contracting authorities evidence that they paid their direct subcontractors, and authorities must report late payments to the enforcement authority.
  7. Late payment interest is automatic, equal to the reference rate plus 8 percentage points, and creditors cannot waive it when the debtor is a public authority or large undertaking.
  8. Flat-fee compensation for recovery costs is automatically due: EUR 50 for transactions up to EUR 1 500, EUR 100 up to EUR 15 000, and EUR 150 above EUR 15 000.
  9. Contractual terms and practices that breach the rules, such as setting longer payment periods or limiting the right to interest, are null and void and prohibited.
  10. Creditors must obtain an enforceable title within 60 calendar days of lodging an action for unchallenged claims.
  11. Member States must designate independent enforcement authorities with powers to investigate, impose fines and publish decisions, and must promote alternative dispute resolution.
  12. The Commission must set up a European Observatory of Late Payments and report on the regulation's implementation four years after entry into force and every three years thereafter.

Who is affected

  • Undertakings, especially micro, small and medium-sized enterprises, gain stronger rights to interest and compensation for late payments.
  • Public authorities as debtors face a 30-day payment limit, reporting duties and offsetting requests from creditors.
  • Large undertakings as debtors cannot require creditors to waive interest or flat-fee compensation.
  • Contractors in public works must prove they paid their direct subcontractors.
  • Member States must designate enforcement authorities, ensure training and tools for SMEs, and report data to the Observatory.

Figures and deadlines

  • 30 calendar days: maximum payment period from receipt of invoice or goods.
  • 60 calendar days: extended payment period if expressly agreed in the contract.
  • 120 calendar days: extended payment period for slow-moving or seasonal goods.
  • 30 calendar days: maximum duration of acceptance or verification procedure.
  • 8 percentage points: added to the reference rate for late payment interest.
  • EUR 50, EUR 100, EUR 150: flat-fee compensation for recovery costs by transaction value.
  • 60 calendar days: deadline to obtain an enforceable title for unchallenged claims.
  • 4 years after entry into force and every 3 years thereafter: Commission reporting deadline.

Legal basis: Article 114 of the Treaty on the Functioning of the European Union.