30 Day Time Limit Introduced For Payment of Commercial Invoices

debt collection in spainReal Decreto 4/2013, introduced in February 2013 has introduced  measures to support business and to stimulate  employment at a time of national and international economic stagnation.

While a number of areas have been targeted such as lowering the costs of social security contributions for young people who opt for self-employment and introducing incentives for companies to employ young people or long-term unemployed, an important objective has been to tackle the problem of business failures due to cash-flow problems brought about by late and non-payment of commercial invoices.

The new Spanish legislation is in effect implementing EU Directive 2011/07 which establishes measures to counteract late and non-payment of debts  in commercial operations. The relevant measures targeting late payment are contained in the second chapter of Royal Decree 4/2013.

New Time Limits

The changes brought in by the new legislation may be summarised as follows:

30 natural days is now the standard period within which commercial bills fall for payment, and that period applies even where there is no period expressed in the contract. The parties may, if there is express agreement, agree to a 60 day period for payment of an invoice.  There are a number of variations depending on sector as follows:

  • 30 days for the Public Sector
  • 30 days for companies generally, which may be increased to 60 days by express agreement between the parties
  • 30 days for construction companies, which may be increased to 60 days by express agreement between the parties
  • 30 days for non-perishable goods, which may be increased to 60 days by express agreement between the parties
  • 30 days for perishable goods

If a payment period has been established by the terms of the contract, time runs from receipt of invoice (by electronic means) and not reception of goods. Also, if a process has been agreed by which delivery of products or services must be verified before accepting an invoice, that process may not last more than 30 days, and payment must be effected within 30 days from the time that verification takes place.

In order to facilitate the management of payment of invoices,  where there are a number of distinct invoices, these may be grouped together for a single payment, but the dates of the invoices may not be more than 15 days apart.

 

Compensation and Interest

With regard to agreements where payment by installments is envisaged, failure to make a payment shall mean that legal interest and compensation shall be calculated from the date that payment was due.

That interest that the debtor must pay has been revised from 7% to 8% which is added on top of the official interest rate as calculated by the European Bank. A fixed amount of €40 is payable to the creditor together with the costs that the creditor has incurred in order to recover the debt.

The previous limit fixed on the amount that the creditor could claim as compensation of 15% of the amount of the debt has been removed. The creditor may claim any costs relating to the recovery of the debt such as the cost of a lawyer or other debt-collection agency.

The new law has full effect on all contracts, including those that were signed before the coming into effect of the law.

It is to be hoped that the new law will force those companies with a track-record of delaying payment to reconsider willful delay of payments that so badly affect the cash-flow especially of smaller business. Time will tell.

If you require assistance with recovery of a debt in Spain, read more about potential solutions.

 

Send Us Your Enquiry

Select Office

Select Office

Select Office

Select Office

Select Office

Select Office

Select Office

Select Office

Select Office

Select Office

Select Office

Choose Files

 

×
Call or Message Us on WhatsApp!