Spain: Recent Developments In Late Payment In Commercial Transactions
Recent Developments In Late Payment In Commercial Transactions
Partner of Estudi Jurídic Sánchez & de Canals
Lawyer specialized in Corporate Operations, Corporate Agreements and Inheritance Planning
Given the difficult economic situation the country is currently going through, and aiming to try to ensure the survival of Spanish companies and meet the requirements laid down by the European Union, a series of measures to support business people, SMEs and the self employed have recently been adopted. Among them are measures aimed at reducing late payment in commercial transactions.
For this reason, on the 23rd of February, Royal Decree Law 4/2013, of 22nd of February “of measures of support for business people and stimulus for growth and jobs creation”, came into force. With this decree various changes to the latest law fighting late payments were introduced, the main points of which can be summed up in the following points:
- With respect to the payment period for paying invoices: The normal payment period (with very few exceptions) is as follows:
Where the parties have not agreed a payment period: this is set at 30 days (previously it was 60).
The payment period will be counted from the actual receipt of the goods or provision of the services, even if the invoice has been previously received .
Where the parties have agreed a payment date or period: the payment period will be that agreed by both parties and can NEVER exceed 60 days.
In this case, the receipt of the invoice by electronic means (by email, for example) will have the effect of starting the calculation of the payment period, so long as the identity and authenticity of the signatory and the integrity of the invoice and its reception are guaranteed.
- Possibility of batching invoices: To facilitate the management of the invoice payment process, invoices may be batched throughout an established period no longer than 15 days, by means of one only invoice which will cover all deliveries made in this period.
- With respect to charging interest for late payment: The legal interest rate for late payment has been increased to 8 percentage points (instead of 7) which the debtor is legally required to pay as of the payment due date on the invoice, taking as reference the rate of interest applied by the European Central Bank to its most recent principal financing operation. (The interest rate for late payments can be checked as it is published twice yearly in the Official Gazette of the Spanish State (BOE) and there are also several pages on Internet which give the interest rate charged for late payment in commercial transactions).
- With respect to debt recovery costs: When an invoice has not been paid by its payment due date, this debt can be automatically increased by €40, without the need for justification or prior notification.
If the debt recovery costs amount to more than €40, the creditor can also claim the payment of the corresponding indemnity for all the debt recovery costs incurred (for example, the legal costs for claiming the debt) so long as these can be duly accounted for.
- With respect to abusive clauses and practices: Clauses which exclude an indemnity for debt recovery costs are considered abusive and are therefore null and void.
It is important to emphasise that all contracts, including those formalised prior to the coming into force of the aforementioned Royal Decree Law (23rd of February), have a year from that date to comply with these requirements.
For further information, please contact email@example.com
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