Late Payments Directive Faces Further Delays

Recently, the Business Europe President and Director General met with the European Commission about the status of Late Payments Directive. While the Directive has been approved by last European Parliament, it is currently blocked by the European Council but there is an understanding is that the Council are working towards progressing on the file. However, the upcoming elections in Germany has delayed progress.

What is the Late Payments Directive?

The directive aims to establish a culture of ‘prompt payment' between businesses and requires debtors to pay interest and the reasonable recovery costs of the creditor if they do not pay for goods or services on time. The limits are within 60 days for businesses and within 30 days for public authorities.

A possible alternative model that the Council is currently discussing is the UK model, which seems to provide for a voluntary approach in B2B based on an incentivizing system linked to payment performance.

Separately, but related to this matter is the 2024 EU Payment Observatory Annual Report, which published some interesting findings about payment performance in the EU (see below):

• governments still pay later than business in every MS according to suppliers
• sector heterogeneity remains
• the larger the company the higher the likelihood it pays late

The SFA through its representation in the Business Europe SME Committee and the Ibec Brussels teams will continue to monitor the situation as it develops.

For questions on this topic, please contact SFA Public Affairs Lead, Jonathan McDade - Tel: 01 605 1688 or Email: jonathan.mcdade@sfa.ie.