Beginning in February 2022, a series of amendments to the Belgian law regarding the payment term for invoices in B2B transactions will come into effect, which are intended to protect weaker business partners against abuses and loopholes that have been exploited over the years. Under the amendments, the legal payment term for invoices in B2B transactions will be a maximum 60 days from the date of the invoice. The amendments further address existing abuses of postponing the payment term for verification of goods/services and contractually agreeing on postponing the sending of the invoice as a mean to delay the starting date of the payment term.
Current regime and established abuses
The Law of August 2, 2002 on combating late payments in commercial transactions (the “Law on combating late payments”) has long protected entrepreneurs and companies against late payment of invoices from their business partners. This has included, e.g.:
- Setting the legal payment term for invoices between companies to 30 days, although the parties are allowed to extend this term to 60 days;
- Unless agreed otherwise, an automatic interest of 8% for late payment (from the third quarter of 2021) which will apply without the need for any notice of default.
In recent years, however - and partly due to provisions of the Law on combating late payments - it became clear that several loopholes have been (ab)used to circumvent B2B protections, e.g.:
- Delaying the start of the payment term until after verification of the goods or services. Article 4 of the Law on combating late payments sets out a maximum 30 additional days for such verification purposes. This would bring the payment term to a maximum of 90 days;
- (Contractually) delaying invoicing from the supplier, to postpone the start of the legal payment term.
In line with other recently adopted B2B protection measures (prohibition of unfair market practices, prohibition of abuse of economic dependence and prohibition of unfair clauses), Belgian lawmakers have recently decided to tackle these abuses by amending the Law on combating late payments (see below).
From February 1, 2022, additional protections will be offered in B2B transactions with the adoption of the following payment-term conditions:
- Payment term: If the agreement between the companies provides for a procedure for accepting or verifying the conformity of the goods or services, this verification term will now form part of the payment term. This reduces the payment term to 30 days, which can be extended by the parties to a total maximum of 60 days;
- Date of invoicing: The date of invoicing can no longer be contractually postponed, as the debtor will have to provide all relevant information for invoicing at the latest by the delivery date of the goods or services. This enables the creditor to immediately issue an invoice after delivery, starting the legal payment term.
- Flat fee: In the event of late payment, the amount due is automatically increased by a flat fee of €40 to cover collection costs. This is in addition to the 8% late payment interest.
What about existing agreements?
The amendments to the Law on combatting late payments come into force on February 1, 2022. From that date onwards, agreements and terms and conditions must be drafted in accordance with the new legislation.