New Directive on Combating Late Payment in Commercial Transactions

The European Parliament has approved the final text of a new directive on combating late payment in commercial transactions. As a general rule, the deadline for both public and private sectors to pay a bill for goods or services will now be 30 days. For business-to-business payments the general deadline is 30 days unless otherwise stated in the contract. If both parties agree, it is possible to go up to 60 days. The payment period may be extended beyond 60 days only if “expressly agreed” by the creditor and the debtor in the contract and provided that it is not “grossly unfair” to the creditor.

For public-to-business payments the general deadline is 30 days. If the two parties wish to extend the payment period, this has to be “expressly agreed” and “objectively justified in the light of the particular nature or features of the contract”. Member states may choose a payment deadline of up to 60 days for public entities providing healthcare.

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