Fighting Late Payments
Many payments in commercial transactions between businesses or between businesses and public authorities are made much later than agreed. This is very costly for businesses. The EU's Late Payment Directive 2011/7/EU strengthens businesses' rights to prompt payment.
Late Payment Directive 2011/7/EU
- Harmonisation of period for payment by public authorities to businesses: Public authorities have to pay for the goods and services that they procure within 30 days or, in very exceptional circumstances, within 60 days.
- Contractual freedom in businesses commercial transactions: Enterprises have to pay their invoices within 60 days, unless they expressly agree otherwise and if it is not grossly unfair.
- Businesses are automatically entitled to claim interest for late payment and are also able to obtain a minimum fixed amount of €40 as a compensation for recovery costs. They can claim compensation for all remaining reasonable recovery costs.
- The statutory interest rate for late payment in the Member States should be increased to at least 8 percentage points above the European Central Bank’s reference. Public authorities are not allowed to fix an interest rate for late payment below.
Member States may continue to maintain or to bring into force laws and regulations which are more favourable to the creditor than the provisions of the Directive.
Directive 2011/7/EU replaces the earlier Late Payment Directive 200/35/EC, giving businesses stronger rights.
EU governments were required to bring their national laws into line with Directive 2011/7/EU by 16 March 2013. So far, 27 out of the 28 EU countries have done so.
Late payment information campaign
The campaign (running to December 2014) will include events across the EU to highlight businesses' rights under the 2011 Directive, provide a forum for the exchange of best practices and help businesses to tackle late payment issues.
The campaign will focus on small and medium-sized businesses, as they are most affected by the current culture of late payment across the EU.
Late Payment E-desk
Please do not hesitate to contact us (ENTR-LATE-PAY-E-DESK@ec.europa.eu) for further information on the late payment campaign, as well as information about the implementation and application of the late payment Directive in the 28 Member States.
The Commission also invites companies and citizens to share information concerning the application of the Directive in their own countries, and to send any evidence of problems experienced when applying the new rights conferred by the Directive. (ENTR-LATE-PAY-E-DESK@ec.europa.eu).
National websites on late payment
- Reference documents on fighting late payment
- European e-Justice Portal
- European Judicial Atlas in Civil Matters
- European Judicial Network in civil and commercial matters
- Other related EU legislation
- Other useful links