Payments to SMEs - Bill to Impose Maximum Payment Terms for Payments by Large Businesses to SMEs

On 2 March 2018, a Bill amending the Law of 2 August 2002 on combating late payment in commercial transactions was submitted to the Federal Chamber of Representatives (Wetsvoorstel tot wijziging van de Wet van 2 augustus 2002 betreffende de bestrijding van de betalingsachterstand bij handelstransacties / Proposition de Loi modifiant la Loi du 2 août 2002 concernant la lutte contre le retard de paiement dans les transactions commerciales – the “Bill”). The Bill intends to protect small and medium-sized enterprises (“SMEs”) by imposing maximum payment terms for payments by non-SMEs to SMEs.

Pursuant to the Law of 2 August 2002 on combating late payment in commercial transactions (the “Law of 2 August 2002”), and unless agreed differently, any payment for commercial transactions between businesses should take place within a period of 30 calendar days. This period of 30 days starts running from the date of (i) receipt of the invoice; (ii) receipt of the goods or services (if the date of receipt of the invoice is unclear or if the debtor receives the invoice earlier than the goods or services); or (iii) acceptance or verification of the conformity of the goods or services with the agreement (if a procedure for acceptance or verification is foreseen by law or in the agreement and if the debtor receives the invoice before the date of acceptance or verification). Unless agreed differently, the period for acceptance or verification cannot exceed 30 days starting from the date of receipt of the goods or services.

Under the current rules, the parties are entitled to agree on an extension of both the payment term and the acceptance or verification term. Additionally, the Law of 2 August 2002 provides explicitly that the contractually agreed payment term for invoices between businesses may even exceed 60 calendar days. Contractual provisions providing for longer terms may be revised by a judge if considered to be “grossly unfair” to the creditor.

The authors of the Bill note that many businesses, mainly SMEs, accept payment terms with which they do not feel comfortable. Debtors, and especially large businesses, often insist on long payment terms which, according to the authors of the Bill, are detrimental to the liquidity of SMEs and thereby the entire economy.

Therefore, taking inspiration from a recent amendment to the Dutch rules on payment terms in commercial transactions, the Bill provides for a twofold limitation on contractually agreed payment terms for contracts in which the creditor is an SME (defined by reference to the Companies Code) and the debtor a large business (defined as businesses which do not qualify as SMEs). The Bill provides that contracts between large businesses, acting as debtor, and SMEs, acting as creditor, cannot provide for: (i) payment terms exceeding 60 calendar days; or (ii) acceptance or verification periods exceeding 30 calendar days. Contractual clauses in breach of these rules will be considered to be null and void.

Koen T’Syen

Femke Vanderhaeghen