The new Directive on late payments is ready. Yesterday, the European Parliament adopted by a very large majority (612 votes in favour, 12 against and 21 abstentions), the report by Barbara Weiler (S&D), which confirms the agreement concluded with the Council. The Council will adopt this Directive formally in the coming weeks. The new Directive will enter into force 20 days after its publication on the Official Journal of the European Union. Then Member States will have to transpose the new rules into the internal laws within 24 months.
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. The new Directive gives to Member States the possibility establish a term of payment of 60 days for public authorities providing health services like public hospitals or nurseries.
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. European Commission Vice-President Antonio Tajani, Commissioner for Industry and Entrepreneurship, welcomed the vote of the European Parliament and said: “Who works must be timely remunerated. This is a basic principle of fairness but plays a crucial role in relation to the solidity of a company, its treasury, its access to credit and to finance. Therefore, the new directive will help the entire European economy.”