The European Parliament adopted by a very large majority (612 votes in favour, 12 against and 21 abstentions), new rules against late payments.

The text approved by the Parliament confirmed, as general rule for both the public and the private sector, the 30 days limit to settle invoices for the purchase of goods and services. Some exceptions are foreseen in the following cases: in business-to-business relations, the 30 days limit could be extended to 60 days if agreed by both parts and if this possibility is specifically stated by the contract; in the public sector, every extension of the terms of payment needs to be clearly provided and objectively justified.  

It is also confirmed that in case of late payments debtors will be liable for interest of 8% to be added to the interest rate applied by the European Central Bank. Businesses have also an automatic right to charge a flat rate of a minimum of 40 euro to cover the costs of recovery. The European Commission emphasizes that access to finance should be facilitated for SMEs and that a legal and business environment is supportive to timely payments in commercial transactions should be developed.

Source:  European Union