2023-09-12 21:04:12
The European Commission inaugurates the political course with a legislative package that aims to alleviate the situation of European SMEs. Brussels wants from now on there to be automatic penalties for those clients who take more than 30 days to pay an invoice that has been issued by an SME, since currently only 40% of receipts are paid on time. In addition, these companies may pay taxes according to the regulations of their country of origin, even if their businesses are established in several European countries.
According to data from the Community Executive, there are 24 million SMEs in Europe, which represent 99% of all companies, two thirds of the jobs in the private sector. The objective of the Community Executive is to facilitate its expansion by improving access to financing, fighting against excessive administrative burden and delays in payments. “A quarter of SME bankruptcies have their origin in payment delays, which sometimes reach 100 or 20 days,” said Internal Market Commissioner Thierry Breton, who yesterday presented this proposal that must now be approved. of the European capitals and the European Parliament so that it can come into force.
In reality, the initiative presented by the European Commission maintains the current period of 30 days, but reduces the numerous exceptions that exist in the current regulations and that allow some payers to have more advantageous conditions. For example, current regulations allow this period to be extended for certain public entities such as hospitals. In addition, current legislation also allows companies to negotiate another longer period of time when paying invoices, as long as this cannot be considered “extremely unfair.” An ambiguous concept that ends up generating numerous legal disputes.
For this reason, this proposal wants to implement a binding deadline for all European transactions, without any type of advantage for public administrations, which are usually the worst payers. Nor is any clause regarding fair additional deadlines permitted.
So that this does not remain a dead letter, any delay of these 30 days will be accompanied by automatic fines that include interest for delay and a penalty of 50 euros. Currently, many SMEs end up giving up on collecting these invoices due to the additional cost of judicial procedures. Furthermore, in public works tenders, the European Commission also requires main contractors to demonstrate that they have paid invoices on time to subcontracted SMEs, since in many cases they only make payment when the work has been completed.
The Spanish Confederation of Small and Medium Enterprises (Cepyme) has positively valued this proposal from the Community Executive since “delinquency is one of the main problems faced by SMEs, but at the same time it is a complex problem that requires an integrated framework that reduces it. The employers’ association recalls that, with the current high interest rates, it would be necessary to “evaluate the possibility that the activation of the rule occurs in a phased manner, starting, in the first place, by the public administrations; later by large companies; and finally, for small businesses and the self-employed.
According to data from the confederation, between April and June the average payment period in commercial operations between companies was above the maximum legal period of 60 days established by law, which represents an expense for companies in commercial debt of around 2.4 billion euros.
The proposal also wants states to set up national agencies to oversee collections. In addition, the Community Executive has also presented another series of measures to make it easier for SMEs that operate in several countries to pay their taxes without having to deal with several tax administrations. Brussels estimates that this measure would reduce administration costs by 32% and save 34 billion euros annually. The initiative proposes that companies calculate their tax base according to the rules of the country in which they have their headquarters and present a single tax return, which requires a coordination effort by the different tax administrations.
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