Faster payment of your invoices from February 1, 2022

The Act of 2 August 2002 on combating late payment in commercial transactions will have new changes from 1 February 2022, as a result of which:

• The maximum payment term of 60 calendar days also applies to large companies.
• The verification period can no longer extend the maximum payment term.
• It is no longer possible to contractually agree on the receipt date of the invoice (and thus extend the maximum payment term).
• That all information required to draw up and send the invoice must be known at the time of delivery or performance of the agreement.

After exceeding the payment term, late payment interest is due automatically and without notice of default, as well as a fixed amount of EUR 40.

As an entrepreneur, you want to see your invoices paid on time and in full and you are therefore not unfamiliar with the Act of 2 August 2002 on combating late payment in commercial transactions.

After the law was revised in 2019 to protect SMEs even better, the loopholes that regularly occur in practice are now being closed.

This change in the law can have important consequences for your company, either as a creditor or as a debtor.

The Commercial Transactions Combating Late Payment Act applies to transactions between companies or between companies and government agencies that lead to the delivery of goods or the provision of services for compensation.

In this news item we focus on transactions between companies.

The Law stipulates that every payment must be made within a period of 30 calendar days from the day of receipt of the invoice or equivalent payment request, unless the parties have agreed on a different payment term.

If it is not certain when the invoice or payment request was received, the period starts from receipt of the goods or services.

Until February 1, 2022, it was possible to agree on a payment term longer than 60 calendar days, unless the creditor was an SME and the debtor was not.

The legislator wanted to protect companies against the power of large companies.

From February 1, 2022, the protection of SMEs will be extended to all companies and under no circumstances can a payment term longer than 60 calendar days be agreed. If a longer term is stipulated, the term of 30 calendar days will apply and interest will therefore be due from the 31st calendar day.

In addition to limiting the maximum payment term, a number of provisions that close creative loopholes will come into effect from February 1, 2022:

• Any verification period (procedure for the control or acceptance of the goods or services), provided for by law or agreement, will be a mandatory part of the payment term, which guarantees the maximum payment term of 60 calendar days.
  • Under current legislation it was still possible to impose a verification period of a maximum of 30 calendar days (for SMEs) or longer (for large companies and provided that it was not manifestly unfair) before the payment term.
  • In practice, large companies sometimes provided an artificial verification period in order to maintain their standard payment term of 90 calendar days or longer, with a negative impact on the cash flow of SMEs.
• It is no longer possible to contractually agree on the receipt date of the invoice.
  • Under current legislation, it was not (explicitly) prohibited to de facto extend the payment term, by contractually recording the moment of receipt of the invoice in the agreement or through purchase conditions.
• The debtor must communicate to the creditor all information required to draw up and send the invoice no later than the time of delivery or performance of the agreement.
  • The practice, especially in large companies, where the latter must first provide invoicing information, such as a PO number (Purchase Order number), to the supplier or service provider before the latter can draw up an invoice, is well known. In concrete terms, the large companies granted themselves a payment deferral. This is no longer allowed.

If the payment term is exceeded, late payment interest becomes due by operation of law (unless the debtor proves that he is not responsible for the delay). A notice of default by the creditor is therefore not required. Currently, the statutory interest rate on commercial transactions is 8%.

In addition, the creditor is entitled to charge a fixed amount of EUR 40 to cover its own collection costs. If the debt is collected before the court, the creditor is additionally entitled to legal compensation (lump sum compensation for attorney's fees).

If the debtor deviates from these legal provisions through contractual clauses, a court can moderate these clauses.

Do you have any questions about this new legislation? Are you confronted with a debtor who refuses to pay you on time? Or do you fear that your contracts or general terms and conditions are no longer legal? Please contact our specialists and we will help you further.

Andreas Ketele – Jeroen Lison

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