EUU, Alm.del - 2022-23 (2. samling) - Bilag 322: Notat og høringssvar vedr. revision af direktivet om forsinket betaling (Late Payments)

Europaudvalget 2022-23 (2. samling)
EUU Alm.del Bilag 322
Offentligt

Ministry of Justice

Date:

Office:

Contact:

Our ref.:

Doc.:

March 17, 2023

Formueretskontoret

Christina Birkedal Chris-

tensen

2023-4071-0065

2769116

The Danish

Government’s response to the Commission’s

call for evi-

dence and public consultation on the revision of the Late Payments Di-

rective

1. General remarks

The government supports the goal of promoting a culture of prompt pay-

ment. The tools used to promote a culture with prompt payment should be

suitable and necessary and not excessive in relation to the objective sought

to be achieved. We are positive regarding the digitization of business report-

ing tools, including payment solutions and e-invoicing infrastructure. This

can support the digital transition of European businesses through allowing

for innovation of business models and the easing of internal processes.

2. Follow a light touch approach. Make a clear distinction between

late payment in breach of contract and long payment terms

based on contractual agreement.

Flexibility allowed by freedom of contract has its own value. This is part of

the reason why the current directive also protects the interest of businesses

to agree on terms most suitable for their business models. The problem of

late payment is also easily misinterpreted to cover all payments later than

60 days, regardless of whether they are agreed fairly between businesses or

in breach of contract. A recent study from the JRC contributes to blurring

the distinction by estimating the economic impact of payments within a

fixed period and thereby measuring fair contracts as part of the problem.

Slotsholmsgade 10

DK - 1216 København K.

European Commission, Joint Research Centre, Ferrara, A., Ferraresi, M., Assessing the

economic impact of faster payments in B2B commercial transactions : final report, Publi-

cations Office of the European Union, 2022,

https://data.europa.eu/doi/10.2760/219348

Phone +45 7226 8400

www.justitsministeriet.dk

[email protected]

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EUU, Alm.del - 2022-23 (2. samling) - Bilag 322: Notat og høringssvar vedr. revision af direktivet om forsinket betaling (Late Payments)

We suggest that the Commission makes clear distinction between late pay-

ment contract breaches versus long payment agreements in analytic works

and when solutions are presented in the impact assessment. To avoid risk of

over-regulation, we also encourage the Commission to follow a light touch

approach, making sure any further intervention is proportionate to the avail-

able evidence.

3. Promote shorter payment terms in sectorial agreements or

standard contracts instead of setting maximum payment terms.

Promotion of fair payment terms and practices should be balanced with re-

spect for freedom of contract. Contracts are a result of negotiation and com-

petition on many factors. Contract flexibility is a necessary driver for inno-

vative business models, because SME needs vary in sectors and individu-

ally. For these reasons, setting maximum payment terms risks weakening

the bargaining position of SMEs regarding their needs apart from short term

liquidity.

As a result, less flexibility in payment terms is likely to result in

less favourable price negotiations for SMEs.

We urge the Commission to explore alternatives to setting maximum pay-

ment terms. A possible solution is instead to promote sectorial agreements

between representatives of business sectors where an issue is identified. The

agreements could set standard terms within each sector, including payment

terms. The terms should not be binding, but information about the agree-

ments should be publicly promoted to help SMEs leverage them as a base-

line in their individual contract negotiations.

4. Unleash the potential of e-invoicing and digital bookkeeping

Many businesses, especially SMEs, struggle to keep up with their bookkeep-

ing. This includes maintaining the necessary overview related to making

payments on time. In this context, wider use of e-invoicing has opened pos-

sibilities to simplify bookkeeping processes, minimizing burdens, leading

to more accurate and timely handling of payments. From a compliance per-

spective, e-invoicing and digital bookkeeping can also create a basis for im-

proved transparency on payment terms and performance as well as data-

driven targeting of interventions.

For example, an SME might negotiate for a long term of termination to ensure continuous

income in difficult times and be willing to accept long payment terms in return if that allows

the counterpart to stick to a good price, resulting in a better result long-term.

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EUU, Alm.del - 2022-23 (2. samling) - Bilag 322: Notat og høringssvar vedr. revision af direktivet om forsinket betaling (Late Payments)

In Denmark, e-invoicing has resulted in considerable cost savings on admin-

istration and more reliable data since it became mandatory in B2G (busi-

ness-to-government) transactions in 2011. Other Member States, including

Italy and Poland, have already made e-invoicing mandatory in B2B (busi-

ness-to-business) transactions, which has enabled more timely payments,

helping to reduce their VAT gaps further. The VAT in the Digital Age

(ViDA) proposal’s aim to make a move to real-time

digital reporting based

on e-invoicing for businesses that operate cross-borders in the EU under-

scores the fact that the EU is leaning into e-invoicing.

We urge the Commission to consider these developments closely to unleash

their potential towards faster payment practices, while being mindful of the

instances where the possible lifted burdens do not match the costs associated

with implementing the new infrastructures (i.e. micro businesses). In partic-

ular, we would like to highlight the following benefits and preconditions:

Enable more systematic payments, automatic charge of interests as

well as easier debt collection

Many businesses simply forget to pay, to charge interest or to send remind-

ers when payments are not made on time. However, adoption of e-invoicing

practices as well as available digital bookkeeping systems can make this

easy. Overviews of payments can be automatically generated for manage-

ment purposes, and individual transactions can be handled mostly automat-

ically.

We suggest looking into the available solutions for e-invoicing and digital

bookkeeping and encourage further adoption, as the technology is ready for

widespread use and can greatly reduce the number of unintentionally late

payments.

•

Improve transparency of payment performance

Some businesses intentionally pay late to improve their own cashflow,

which may be systematically or ad-hoc, for example to counteract the effects

of another business paying late. Fortunately, e-invoicing has an added ben-

efit of improving transparency on payment performance, as it provides data

that can be used by businesses to inform their actions. For example, some

systems for digital bookkeeping already utilize the available data to inform

the creditors with a ‘red flag’ on known late payers.

•

More information on the ViDA Proposal here:

https://taxation-customs.ec.europa.eu/tax-

ation-1/value-added-tax-vat/vat-digital-age_en

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EUU, Alm.del - 2022-23 (2. samling) - Bilag 322: Notat og høringssvar vedr. revision af direktivet om forsinket betaling (Late Payments)

We therefore also suggest considering that wider use of e-invoicing and dig-

ital bookkeeping would further enable aggregation of high-quality struc-

tured data to inform future intervention.

•

Avoid fragmentation of requirements.

EU can play an important role towards avoiding fragmentation, as different

requirements for e-invoicing emerge across member states and risk under-

cutting the benefits. A common European standard for e-invoicing can be-

come a positive driver for the roll-out of e-invoicing in general. It is im-

portant, that standards and not mandatory European solutions or platforms

become the drivers, as European countries should be allowed to create the

technical solutions that best fit their needs. The ViDA proposal already aims

towards a European standard on e-invoicing.

We remind the Commission that measures regarding e-invoicing and digital

bookkeeping should be closely coordinated with DG TAXUD and Tax au-

thorities in the member states. In our view, a European standard should build

on PEPPOL (Pan European Public Procurement Online) which is widely

supported across 18 countries in Europe as the method of delivery of e-in-

voices to the public sector

5. Consider the necessity of an increase in the rate of interest

In Denmark, the interest rate level is aligned across the area that the directive

regulates and other areas such as the consumer area. As we consider it es-

sential, we urge the Commission to take into consideration that the interest

rate level in the area of the directive should be in reasonable proportion to

interest rate level in other areas.

6. Fines or other criminal sanctions

In principal, Denmark regards imposition of fines or other criminal sanc-

tions on natural and legal persons as a matter for the courts. Furthermore,

the Danish constitution does not allow for fines to be imposed by adminis-

trative authorities. In the Danish legal system, imposition of criminal fines

is only to be done by the courts. Therefore, we urge the Commission to take

into consideration that rules regarding fines or other criminal sanctions

should be composed with respect for the national legal systems.

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