On 8 March 2013, a new act was adopted on payment terms in commercial transactions (Official Journal of Laws from 2013, item 403), which constitutes implementation of the directive of the European Parliament and the European Council 2011/7/UE dated 16 February 2011 on combating payment delays in commercial transactions. The Act was brought into force on 28 April 2013 and superseded the former act of the same title.
The Act is applicable to commercial transactions (contracts whose subject matter is paid delivery of goods or paid service provision as long as the parties conclude such contract in connection with the performed business activity), between entities running a business activity, and also public-sector entities (defined in the Act on Public Procurement Law). It is necessary to remember, however, that the Act is applicable only to contracts executed after the law was brought into force, i.e. after 28 April 2013. In the case of contracts earlier concluded, the provisions of the Act on payment terms in commercial transactions formerly in force are still applicable.
The new Act introduces two categories of payment terms, which if provided for in the contract, impose different consequences on the debtor.
Payment Term Longer Than 30 Days
When the parties agreed in the contract to adopt a payment term longer than 30 days, the creditor may claim statutory interest for the period after the lapse of the agreed 30-day payment term, starting from the contract performance and VAT or simplified invoice service on the debtor, to confirm the goods delivery or service rendering (despite the fact that under the provisions of the Civil Code, the receivables are not due yet), until the payment date, but no longer than until the maturity date of the cash consideration (i.e. the payment date provided for in the contract). The aforementioned principle is applicable also in the event when no payment term is provided for in the contract.
Payment Term Longer Than 60 Days
According to the new Act, the payment term stipulated in a contract may not be longer than 60 days, counted from the date of VAT or simplified invoice service on the debtor, to confirm the goods delivery or service rendering, unless the parties agreed otherwise and provided that such parties’ arrangement is not contradictory to the social and economic purpose of the contract as well as the principles of social coexistence, and is objectively justifiable in terms of the goods’ or service’s nature. When the payment term is longer than 60 days, the creditor who has delivered their contract performance is entitled to claim interest in an amount equal to interest on an outstanding tax payment, once the 60-day payment term has lapsed (irrespective of the longer payment term agreed by the parties in the contract). The rate is determined under article 56 § 1 of the Act of 29 August 1997 – Tax Ordinance (Official Journal of Laws from 2012 item 749 as amended). The legislator’s objective was, apparently, to ensure a more favourable position of the creditor than it is the case when statutory interest is claimed. Nevertheless, the amount of interest on outstanding tax dues depends on the discount rate, which is variable. As a consequence, the current rate amounts to 10% yearly and is significantly lower than the statutory interest rate (13% yearly). The situation may, however, be subject to change.
Payment Term in the Case of Public-sector Entities
The 60-day payment term referred to above is not applicable in the case of a transaction where the debtor is a public-sector entity. When the contractual payment term is longer than 30 days, counted from the date of VAT or simplified invoice service on the debtor, to confirm the goods delivery or service rendering, the creditor is entitled to claim interest in an amount equal to interest on an outstanding tax payment (determined under article 56 § 1 of the Tax Ordinance). The parties may agree to adopt a payment term longer than 30 days provided that such parties’ arrangement is objectively justifiable in terms of the contract’s or its particular components’ nature. The term, however, may under no circumstances be longer than 60 days.
EUR 40 Lump Sum Compensation
The new Act on payment terms in commercial transactions introduces yet another significant change. The creditor, starting from the date of their becoming entitled to claim interest (in an amount equal to interest on an outstanding tax payment), without a prior call, is entitled to claim a compensation from the debtor for the costs of the debt recovery in an amount equivalent to EUR40, converted into the Polish zloty according to the mean EUR exchange rate announced by the National Bank of Poland on the last working day of the month preceding the month when the cash consideration became due. If the debt recovery costs are higher than EUR 40, the creditor is entitled to have the total expenditure reimbursed, inclusive of the court proceedings costs less EUR 40.