Late payments in Portugal

Subject: Late payments in Portugal

Timely payment for purchased goods or contracted services is essential for the confidence of economic operators, but it is also a necessary condition for the liquidity of businesses, especially small and medium-sized enterprises. The Commission’s proposal1 for a Regulation on combating late payments is welcome, and we hope that it can bring about a drastic reduction in the significant delays in business-to-business transactions, but above all in the relationships between businesses and the Member States.

The Portuguese State has been failing to fulfil its obligations towards businesses. It should be noted that in the third quarter of 2023 there were late payments in the order of 661 days (Administrative and Financial Management Department of the Portuguese Ministry of Culture)2. The problem is not a new one and has already led to infringement proceedings3 and earlier questions to the Commission4.

In light of the above:

1. What is the outcome of the Commission’s dialogue – if any – with the Portuguese authorities on this matter?

2. How does it anticipate the application of the Regulation in a scenario of chronic non-compliance in cases such as the Portuguese one?

3. How does it reconcile the aims of the proposed Regulation with the principle of freedom of contract in business-to-business transactions?

Submitted:1.2.2024

1 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2023%3A533%3AFIN

2 https://www.dgo.gov.pt/execucaoorcamental/ProgramaPagarATempoEHoras/PMP60_3Trim2023_AC-AR.pdf

3 INFR(2017)2037

4 https://www.europarl.europa.eu/doceo/document/E-9-2023-002107_EN.html

Answer given by Mr Breton on behalf of the European Commission

(10 April 2024)

The Commission welcomes the Honourable Members’ support to the Commission proposal on combating late payment in commercial transactions (5).

The proposal addresses the shortcomings of the current Late Payment Directive (6) by capping payment terms at maximum 30 calendar days, introducing automatic payment of interests, and identifying enforcement and dispute resolution mechanisms.

These elements — clearer rules, stronger enforcement, more effective and accessible remedial measures — will help ensure prompt payment in Portugal and the whole EU, since late payments still affect all Member States, despite the adoption of the Late Payment Directive in 2011 (7).

The impact assessment accompanying the proposal (8) illustrates that the absence of clear rules, maximum payment terms and enforcement tools has contributed to systemic payment practices and clauses that are detrimental to weaker or smaller creditors.

This context, where only 50% of invoices are paid on time, hampers growth and competitiveness and discourages investments towards the green and digital transition.

At the same time, the proposal still allows for certain alternative solutions, such as the extension of the payment term while the creditor retains the ownership of the goods (9).

1 ∙ ⸱ https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2023%3A533%3AFIN

2 ∙ ⸱ https://www.dgo.gov.pt/execucaoorcamental/ProgramaPagarATempoEHoras/PMP60_3Trim2023_AC-AR.pdf

3 ∙ ⸱ INFR(2017)2037

4 ∙ ⸱ https://www.europarl.europa.eu/doceo/document/E-9-2023-002107_EN.html

5 ∙ ⸱ COM(2023) 533 final.

6 ∙ ⸱ Directive 2011/7/EU, OJ L 48, 23.2.2011, p. 1-10.

7 ∙ ⸱ In the EU, the percentage of on time payments are 51.2% by micro small and medium-sized enterprises (SMEs),47.9% by small SMEs, 41.4% by medium

SMEs and 34.4% by large companies. In Portugal the relevant proportions are: 19.4% (micro), 17.9% (small), 10.1% (medium), 4.1% (large). Dun & Bradstreet Payment Study 2023, https://www.dnb.com/en-ch/knowledge/study/payment-study-2023-download3.html. Additional data can be found in Annex 17 of the impact assessment accompanying the Commission’s Proposal, SWD(2023) 314 final. 8 ∙ ⸱ SWD(2023) 314 final. 9 ∙ ⸱

Article 10 of COM (2023) 533 final.


















| | )In the context of the infringement proceedings mentioned by the Honourable Members and following extensive monitoring procedures undertaken in 2022, the Commission concluded that insufficient improvement had been made and decided in April 2023 (10) to refer Portugal to the Court of Justice of the European Union.

The case (C-487/23) is pending before the Court.

10 ∙ ⸱ https://ec.europa.eu/commission/presscorner/detail/EN/IP_23_2133 | | ( | | )