AS FROM FEBRUARY 1, 2022, BUSINESSES MUST PAY THEIR INVOICES WITHIN 60 CALENDAR DAYS
The Act of 2 August 2002 on combating late payment in commercial transactions got amended on 14 August 2021.
Effective February 1, 2022, all businesses must limit their payment terms in their commercial transactions to a maximum of 60 calender days. Also, if the payment terms provide for a period during which the debtor is allowed to check the conformity of the goods delivered and/or services rendered with the contract terms, such period must be included in the maximum payment term of 60 calendar days.
The protections and restrictions offered by the current Act of 2002 have proven to be insufficient to protect SMEs from large companies using their market dominance to force them into accepting long payment terms, sometimes even more than 90 calendar days. Such long payment terms put a heavy financial strain on these businesses, especially when they must pay their own suppliers and creditors within a much shorter period. The COVID-19 pandemic has simultaneously intensified the problem and laid bare the urgent and immediate need for relief.
On 14 August 2021, a law was voted that amends the Act of 2002 effective February 1, 2022. From that date forward, parties are still free to determine the payment term in their commercial transactions, but such term will have to be limited to a maximum of 60 calendar days, irrespective of the parties’ size. Any contractual clause providing for a payment term in excess of 60 calendar days shall be considered as not written.Consequently, the legally provided default payment term of 30 calendar days will then apply. It is therefore strongly recommended to revise the payment terms and shorten any excessive term before 1 February 2022 to reduce it to the maximum term allowed.
Please bear in mind that if the payment terms provide for a period during which the debtor is allowed to check the conformity of the goods delivered and/or services rendered with the contract terms, such period must be included in the maximum payment term of 60 calendar days The new Act of 2002 further stipulates that contractual arrangements regarding the date of receipt of the invoice are henceforth prohibited and that customer (debtor) must also provide the supplier (creditor) with all the information required to issue the invoice, at the latest upon receipt of the goods or delivery of the services.
As a reminder, if the creditor has fulfilled his contractual and legal obligations and has not received the amount due on time, the outstanding amount will be increased with interest from the following day, ipso jure and without notice of default. This interest amounts to 8.0% for the first semester of 2022. In addition, the outstanding amount will also be increased, ipso jure and without notice of default, by a fixed amount of EUR 40 to compensate the creditor's collection costs.
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