EU 30-Day Payment Cap: What CFOs Must Know
This video explains the European Commission’s proposed 30-day payment ceiling, the European Parliament’s amendments and the subsequent Council deadlock. It separates proposed changes from existing creditor rights and outlines what CFOs should consider when managing European receivables.
Key takeaways
- The Commission’s original proposal would have limited B2B and government-to-business payment terms to 30 days, but it did not become law.
- Parliament supported expressly agreed terms of up to 60 days, with up to 120 days for seasonal or slow-moving goods.
- The proposal would have made late-payment interest automatic and non-waivable, using the ECB reference rate plus eight percentage points.
- Other proposed measures included national enforcement bodies and at least €50 in compensation per late payment, alongside reasonable recovery expenses.
- CFOs should review contract terms, make interest provisions explicit and actively manage overdue balances across EU jurisdictions.
What this video covers
The video examines the EU’s attempted overhaul of commercial payment rules and explains why CFOs should distinguish legislative proposals from current obligations. In September 2023, the Commission proposed replacing the existing directive with a regulation that would apply directly throughout the EU. Its original text set a 30-day ceiling for business and public-sector commercial payments. Viewers learn how the proposal sought to strengthen creditor protection through compulsory late-payment interest, a specified list of unfair practices and national authorities empowered to investigate and penalise breaches. It also included minimum compensation of €50 for each late payment, plus reasonable recovery expenses. The video then traces the political changes. Parliament’s April 2024 position permitted expressly agreed 60-day terms and longer periods for certain goods. Member states subsequently failed to reach a compromise in the Council, leaving the proposed overhaul stalled rather than enacted. For receivables teams, the practical focus is on reviewing contractual payment periods, clearly stating interest rights and managing overdue invoices proactively. The existing directive already provides for interest at the ECB reference rate plus eight percentage points. Persistent payment delays and differing national approaches make jurisdiction-specific attention important, regardless of whether the EU proposal returns.
