Irish Regions Office Website

September 16, 2010

Agreement on late payments to SMEs

On 13 September negotiators from the European Parliament and the Council reached agreement on how to reform the Late Payments Directive. The main objective of this undertaking is to improve the cash flow of European businesses, particularly SMEs based on a commitment in the Small Business Act (2008).

The recent discussions have overturned a discrepancy in the conditions to be applied to public body and business-to-business SME transaction payments for goods and services. A defined 30 day standard grace period is now to be allowed for both sectors, with a possibility to extend it up to 60 days only in exceptional circumstances (including for the healthcare sector). The initial draft proposal from the Commission had been for an open-ended period to be agreed between the parties. Where payment is delayed, the interest charge will be (a reduced) 8% of invoice value while the proposed additional lump sum compensation has now been removed. A simplified fixed EUR40 amount will be applied for associated recovery costs. Parliament’s October plenary session will be asked to ratify the agreement.

Further details

Posted by iroronan at September 16, 2010 10:36 AM