12th October 2023 |
The Department of Enterprise, Trade and Employment is seeking the views of stakeholders on the EU proposal for a regulation on combating late payment in commercial transactions.
Planned scope of the proposed regulation
The EU is proposing to replace Directive 2011/7/EC on combating late payment in commercial transactions (Late Payment Directive) with a regulation.
The proposal is aimed at addressing shortcomings in the Directive that have been identified through studies and stakeholder consultations in the review of the current regulatory framework.
The Commission is proposing this new regulation with the aim of improving the payment discipline of public authorities, large companies and SMEs, while protecting businesses from the negative effects of payment delays in commercial transactions through, preventing late payment from occurring, promoting fairness between parties in commercial transactions, facilitating timely payments and strengthening redress systems.
Key aspects of the proposed regulation
The proposal will mean significant changes to the current rules which aim to addressing shortcomings identified in the Directive:
- a maximum payment-term cap of 30 days for both business-to-business transactions and transactions between public bodies and business (Article 3)
- making null and void any contractual terms impinging on rules set out in the regulation (Article 9)
- no right of waiver to payment of interest and compensation for late payments (Article 5)
- late payment interest will remain at the reference rate plus 8 percentage points (Article 6) and a flat fee compensation for recovery costs of €50 per commercial transaction (Article 8)
- specifying the nature of implementation and enforcement requirements for member states (for example, designation of specific enforcement bodies (Article 13), mediation options (Article 16))
- in public works contracts falling within the scope of the public procurement Directives, the main contractor must provide proof of timely payment to subcontractors (Article 4)
- member states to facilitate availability and access of SMEs to credit management tools, financial literacy training and foster the use by SMEs of digital tools for timely payments (Article 17)
Views from stakeholders and interested parties are requested no later than 5pm on Tuesday, 14 November 2023.
Submissions should be marked ‘Proposal for EU Regulation on combating Late Payments’ and should be emailed to firstname.lastname@example.org.
Further information is available at:
Supports for SMEs, Late Payments