Unfair invoice payment times in the private sector

Subject: Unfair invoice payment times in the private sector

In Spain, businesses in the private sector had to wait on average 77 days in 2020 for their invoices to be paid, a far cry from the 60 days laid down in Law 15/2010 and Directive 2011/7/EU.

Spain’s biggest firms (50 %) are the ones that are the slowest to pay.

Better payment practices are needed in the EU, along with a guaranteed level playing field for SMEs competing with businesses in a dominant position. For this, compliance with the Directive must be stepped up. This would strengthen the proposed Spanish law on combating late payment in commercial transactions, which will bring in a system of penalties.

In addition, Article 3(5) of the Directive allows parties to a contract to agree on a longer period for payment than the legally established period of 60 days, provided that this is not ‘grossly unfair’ to the creditor. This gives rise to unfair practices by many businesses in a dominant position.

Does the Commission plan to step up its vigilance regarding compliance with Directive 2011/7/EU in order to prevent breaches thereof in the Member States and unfair practices by many businesses in a dominant position?

Answer given by Mr Breton on behalf of the European Commission

(8 September 2021)

Late payments are endemic to commercial transactions between businesses (B2B). It has been estimated that in the EU, 60% of B2B transactions are paid late (1). Small and medium-sized enterprises (SMEs) are more exposed to the risk of late or non-payment, with potentially disastrous consequences for their survival and the resilience of supply chains.

The European Parliament resolution of 2019 (2) highlighted that tackling late payment requires a set of different measures targeting processes, people, practices and provisions at both national and EU level. As indicated in its reply to that resolution (3), the Commission will support the Member States in enforcing the Late Payment Directive (4) more effectively.

Relevant actions are included in the ‘SME Strategy’ (5) and ‘Updated Industrial Strategy’ (6), as well as the 2021 work programme of the Fit for Future Platform (7). These actions will provide the Commission with additional tools to fight late payments.

Moreover, on 16 June 2021, the Commission gave a positive assessment to Spain’s recovery and resilience plan, which included dedicated measures to combat late payments in B2B transactions (8).

⋅1∙ https://op.europa.eu/en/publication-detail/-/publication/c8b7391b-9b80-11e8-a408-01aa75ed71a1/language-en

⋅2∙ European Parliament Resolution of 17 January 2019 on the implementation of Directive 2011/7/EU on combating late payment in commercial transactions.

https://www.europarl.europa.eu/doceo/document/TA-8-2019-0042_EN.html ⋅3∙ https://oeil.secure.europarl.europa.eu/oeil/spdoc.do?i=31942&j=0&l=en

⋅4∙ Directive 2011/7/EU on combating late payments in commercial transactions https://eur-lex.europa.eu/legal-content/EN/TXT/?

uri=CELEX:32011L0007 ⋅5∙

COM (2020) 103

⋅6∙ COM (2021) 350

⋅7∙ https://ec.europa.eu/info/sites/default/files/2021_annual_work_programme_fit_for_future_platform_en.pdf

⋅8∙ https://ec.europa.eu/commission/presscorner/detail/en/ip_21_2987