Payment periods between traders and late payment penalties
Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister), Ministry of Economy
The payment deadline is, as a matter of principle, 30e day following receipt of the goods or performance of the service. However, this period can go beyond 30 days, without exceeding 60 days from the billing (or 45 days at the end of the month) if specified in the contract. Late penalties are imposed if these deadlines are not met.
General case
The payment is negotiated between the partners in the professional contracts. The time limit for payment must appear on the invoice and in the general terms and conditions of sale (GTC).
Several payment periods are possible:
- Cash payment: the customer has an obligation to pay for the goods or services on the day of delivery or realization
- Payment on Receipt: A delay of at least one week, including the time of receipt of the invoice
- Payment with default deadline: maximum deadline set at 30e day following receipt of the goods or performance of the service (where no time limit is specified in the contract)
- Payment with negotiated deadline: special clauses in the GCS or agreed between the parties may bring the deadline up to 60 days after the invoice is issued. The time limit may be extended 45 days end of month from the date of issue of the invoice provided that it is mentioned in the contract.
The choice between the 60 calendar days (from date to date) or the 45 days from the end of the month is a matter of contractual freedom.
The method of calculation used and the terms of settlement must be specified in the GCS or in the contract. As this is a maximum, this period may be reduced by mutual agreement between the supplier and his customer.
For the period of 45 days from the end of the month, 2 calculation methods are possible:
- Add 45 days at the end of the month the invoice is issued (for example, an invoice dated January 2 must be paid before March 17)
- Add 45 days to the invoice issue date, the payment limit at the end of the month in which the 45 days expire (for example, an invoice dated January 2 must be paid before February 28 or 29)
The method of calculation must be agreed in advance between trading partners.
Periodic (or recapitulative) invoices must be paid within a maximum of 45 days after they are issued.
Where a procedure for the acceptance or verification of goods is provided for in the contract, it shall be determined in accordance with good practice in the trade and commercial practice. However, it must not exceed 30 days from the receipt of the goods or the performance of the service.
For deliveries to overseas destinations, the time limit shall run from the time of customs clearance at the port of final destination. When the goods are made available to the buyer in mainland France, the period is counted from the 21ste the day following the date of such making available. This period may also be counted from the date of customs clearance, whichever is earlier.
The general terms and conditions of sale (GTC) They must also specify the conditions of application and the interest rate for penalties due in the event of late payment. There is a delay if the payment is made after the date mentioned on the invoice.
The interest rate provided by the GTC generally corresponds to the key interest rate (refinancing rate or Refi) of the European Central Bank (ECB), in force on 1er January or 1er July plus 10 points.
Example: 10.00% (0.00 + 10) for penalties due since 1er July 2019.
With effect from: | ECB rates | Increased interest rate |
|---|---|---|
March 16, 2016 | 0% | 10% |
December 9, 2015 | 0.05% | 10.05% |
September 10, 2014 | 0.05% | 10.05% |
June 11, 2014 | 0.15% | 10.15% |
November 13, 2013 | 0.25% | 10.25% |
May 8, 2013 | 0.5% | 10.5% |
However, it may be lower than the minimum rate of 6.18% (from 1er January 2023), corresponding to 3 times the statutory interest rate (= 3 x 2.06%).
The rate, either annual or monthly, can be converted to a daily rate. It is then multiplied by the number of days between the due date and the receipt date (or the date on which the calculation is made, if the payment has not yet been made).
It is applied to the amount TTC: titleContent of the invoice.
Penalties are due without a reminder: sending a registered letter is not required to trigger the right to collect late penalties.
Penalties run from the day following the settlement date on the invoice or, if not, the 31ste the day following the date of receipt of the goods or the end of performance of the service.
They shall not be subject to VAT: titleContent.
A lump sum of €40 shall be due to the creditor for recovery costs in connection with any late payment.
It applies only to activities subject to the Commercial Code (not commercial leases and insurance, for example).
However, the indemnity shall not apply if the debtor is in the course of the safeguard, recovery or bankruptcy proceedings.
This lump sum is in addition to late penalties, but is not included in the basis for calculating penalties.
Even if the creditor company is not obliged to do so (it is then a commercial gesture), the compensation must be mentioned in the terms of settlement of all contractual documents (GTC: titleContent, invoice in particular).
If the recovery costs actually incurred are higher than this lump sum, additional compensation may be claimed on the basis of justification. This is particularly the case with the use of a firm responsible for revival and formal notice.
As with penalties for late payment, the compensation is due the day after the due date and is not subject to VAT.
The compensation is due in full even in the case of partial payment of the invoice at the due date, regardless of the duration of the delay (it is not due for each day of delay).
FYI
The compensation applies to each invoice paid late, not to all invoices concerned. It is due per invoice.
Failure to comply with the deadlines and the failure to mention penalties for delay in the GCS shall be punishable by an administrative fine of:
- €75,000 and up to €150,000 for a natural person in the event of repeated fault,
- €2 million and up to €4 million for a legal person in the event of repeated fault.
The fact that a debtor requires his supplier to delay the issue of the invoice in order to extend the period for actual payment shall be considered to be an abuse and shall be punished.
Food/Beverages
Type of food | Payment period |
|---|---|
Products which do not keep: | 30 days after the end of the delivery decade (for example, for a delivery on the 5th of the month, calculation of the 30 days from the 10th of the month) |
Live livestock and fresh meat, intended for consumption | 20 days after delivery |
Alcohols subject to consumption rights (e.g. armagnac, cognac, eaux de vie, gin, rum, vodka) | 30 days after the end of the delivery month |
Grapes and musts for making wine and spirits (wine, champagne, cider, grape sparkling, sparkling) | 45 days end of month or 60 days from billing |
The general terms and conditions of sale (GTC) They must also specify the conditions of application and the interest rate for penalties due in the event of late payment. There is a delay if the payment is made after the date mentioned on the invoice.
The interest rate provided by the GTC generally corresponds to the key interest rate (refinancing rate or Refi) of the European Central Bank (ECB), in force on 1er January or 1er July plus 10 points.
Example: 10.00% (0.00 + 10) for penalties due since 1er July 2019.
With effect from: | ECB rates | Increased interest rate |
|---|---|---|
March 16, 2016 | 0% | 10% |
December 9, 2015 | 0.05% | 10.05% |
September 10, 2014 | 0.05% | 10.05% |
June 11, 2014 | 0.15% | 10.15% |
November 13, 2013 | 0.25% | 10.25% |
May 8, 2013 | 0.5% | 10.5% |
However, it may be lower than the minimum rate of 6.18% (from 1er January 2023), corresponding to 3 times the statutory interest rate (= 3 x 2.06%).
The rate, either annual or monthly, can be converted to a daily rate. It is then multiplied by the number of days between the due date and the receipt date (or the date on which the calculation is made, if the payment has not yet been made).
It is applied to the amount TTC: titleContent of the invoice.
Penalties are due without the need for a reminder: a registered letter is not required to trigger the right to collect late penalties.
They shall run from the day following the settlement date shown on the invoice or, failing that, on 31e the day following the date of receipt of the goods or the end of performance of the service.
They shall not be subject to VAT: titleContent.
A lump sum of €40 shall be due to the creditor for recovery costs in connection with any late payment.
It applies only to activities subject to the Commercial Code (not commercial leases and insurance, for example).
However, the indemnity shall not apply if the debtor is in the course of the safeguard, recovery or bankruptcy proceedings.
This lump sum is in addition to late penalties, but is not included in the basis for calculating penalties.
Even if the creditor company is not obliged to do so (it is then a commercial gesture), the compensation must be mentioned in the terms of settlement of all contractual documents (GTC: titleContent, invoice in particular).
If the recovery costs actually incurred are higher than this lump sum, additional compensation may be claimed on the basis of justification. This is particularly the case with the use of a firm responsible for revival and formal notice.
As with penalties for late payment, the compensation is due the day after the due date and is not subject to VAT.
The compensation is due in full even in the case of partial payment of the invoice at the due date, regardless of the duration of the delay (it is not due for each day of delay).
FYI
the compensation applies to each invoice paid late, not to all invoices concerned. It is due per invoice.
Failure to comply with the deadlines and the failure to mention penalties for delay in the GCS shall be punishable by an administrative fine of:
- €75,000 and up to €150,000 for a natural person in the event of repeated fault,
- €2 million and up to €4 million for a legal person in the event of repeated fault.
The fact that a debtor requires his supplier to delay the issue of the invoice in order to extend the period for actual payment shall be considered to be an abuse and shall be punished.
Transport
The payment period may not exceed 30 days from billing in the following sectors:
- Car rental with or without driver
- Road freight transport
- Freight Forwarder
- Freight Forwarder
- Marine Officer
- Air cargo
- Cargo Broker and Customs Broker
The general terms and conditions of sale (GTC) They must also specify the conditions of application and the interest rate for penalties due in the event of late payment. There is a delay if the payment is made after the date mentioned on the invoice.
The interest rate provided by the GTC generally corresponds to the key interest rate (refinancing rate or Refi) of the European Central Bank (ECB), in force on 1er January or 1er July plus 10 points.
Example: 10.00% (0.00 + 10) for penalties due since 1er July 2019.
With effect from: | ECB rates | Increased interest rate |
|---|---|---|
March 16, 2016 | 0% | 10% |
December 9, 2015 | 0.05% | 10.05% |
September 10, 2014 | 0.05% | 10.05% |
June 11, 2014 | 0.15% | 10.15% |
November 13, 2013 | 0.25% | 10.25% |
May 8, 2013 | 0.5% | 10.5% |
However, it may be lower than the minimum rate of 6.18% (from 1er January 2023), corresponding to 3 times the statutory interest rate (= 3 x 2.06%).
The rate, either annual or monthly, can be converted to a daily rate. It is then multiplied by the number of days between the due date and the receipt date (or the date on which the calculation is made, if the payment has not yet been made).
It is applied to the amount TTC: titleContent of the invoice.
Penalties are due without the need for a reminder: a registered letter is not required to trigger the right to collect late penalties.
They shall run from the day following the settlement date shown on the invoice or, failing that, on 31e the day following the date of receipt of the goods or the end of performance of the service.
They shall not be subject to VAT: titleContent.
A lump sum of €40 shall be due to the creditor for recovery costs in connection with any late payment.
It applies only to activities subject to the Commercial Code (not commercial leases and insurance, for example).
However, the indemnity shall not apply if the debtor is in the course of the safeguard, recovery or bankruptcy proceedings.
This lump sum is in addition to late penalties, but is not included in the basis for calculating penalties.
Even if the creditor company is not obliged to do so (it is then a commercial gesture), the compensation must be mentioned in the terms of settlement of all contractual documents (GTC: titleContent, invoice in particular).
If the recovery costs actually incurred are higher than this lump sum, additional compensation may be claimed on the basis of justification. This is particularly the case with the use of a firm responsible for revival and formal notice.
As with penalties for late payment, the compensation is due the day after the due date and is not subject to VAT.
The compensation is due in full even in the case of partial payment of the invoice at the due date, regardless of the duration of the delay (it is not due for each day of delay).
FYI
the compensation applies to each invoice paid late, not to all invoices concerned. It is due per invoice.
Failure to comply with the deadlines and the failure to mention penalties for delay in the GCS shall be punishable by an administrative fine of:
- €75,000 and up to €150,000 for a natural person in the event of repeated fault,
- €2 million and up to €4 million for a legal person in the event of repeated fault.
The fact that a debtor requires his supplier to delay the issue of the invoice in order to extend the period for actual payment shall be considered to be an abuse and shall be punished.
Seasonal sector
Exceptional time limits may be agreed between the Parties if:
- it is provided for by contract,
- it does not constitute a manifest abuse of the creditor.
Sector | Professionals concerned | Payment period |
|---|---|---|
Agroequipment | Between manufacturers, manufacturers and importers, and specialist retail and repair companies |
|
Snow gliding sports articles | Between suppliers and seasonal companies | An additional period of 30 days may be added to the 60 days/45 days end-of-month period for the settlement of deliveries made before the opening of the operating season |
Leather industry | Between suppliers and specialty distributors | 54 days end of month from billing |
Watchmaking, jewelry, jewelry and goldsmiths | Between suppliers, manufacturers, importers or wholesalers on the one hand and specialized distributors on the other (point of sale, distance selling or central purchasing bodies) | 59 days end of month or 74 days net from billing |
Trade in toys | Between manufacturers and specialist distributors |
|
The general terms and conditions of sale (GTC) They must also specify the conditions of application and the interest rate for penalties due in the event of late payment. There is a delay if the payment is made after the date mentioned on the invoice.
The interest rate provided by the GTC generally corresponds to the key interest rate (refinancing rate or Refi) of the European Central Bank (ECB), in force on 1er January or 1er July plus 10 points.
Example: 10.00% (0.00 + 10) for penalties due since 1er July 2019.
With effect from: | ECB rates | Increased interest rate |
|---|---|---|
March 16, 2016 | 0% | 10% |
December 9, 2015 | 0.05% | 10.05% |
September 10, 2014 | 0.05% | 10.05% |
June 11, 2014 | 0.15% | 10.15% |
November 13, 2013 | 0.25% | 10.25% |
May 8, 2013 | 0.5% | 10.5% |
However, it may be lower than the minimum rate of 6.18% (from 1er January 2023), corresponding to 3 times the statutory interest rate (= 3 x 2.06%).
The rate, either annual or monthly, can be converted to a daily rate. It is then multiplied by the number of days between the due date and the receipt date (or the date on which the calculation is made, if the payment has not yet been made).
It is applied to the amount TTC: titleContent of the invoice.
Penalties are due without the need for a reminder: a registered letter is not required to trigger the right to collect late penalties.
They shall run from the day following the settlement date shown on the invoice or, failing that, on 31e the day following the date of receipt of the goods or the end of performance of the service.
They shall not be subject to VAT: titleContent.
A lump sum of €40 shall be due to the creditor for recovery costs in connection with any late payment.
It applies only to activities subject to the Commercial Code (not commercial leases and insurance, for example).
However, the indemnity shall not apply if the debtor is in the course of the safeguard, recovery or bankruptcy proceedings.
This lump sum is in addition to late penalties, but is not included in the basis for calculating penalties.
Even if the creditor company is not obliged to do so (it is then a commercial gesture), the compensation must be mentioned in the terms of settlement of all contractual documents (GTC: titleContent, invoice in particular).
If the recovery costs actually incurred are higher than this lump sum, additional compensation may be claimed on the basis of justification. This is particularly the case with the use of a firm responsible for revival and formal notice.
As with penalties for late payment, the compensation is due the day after the due date and is not subject to VAT.
The compensation is due in full even in the case of partial payment of the invoice at the due date, regardless of the duration of the delay (it is not due for each day of delay).
FYI
the compensation applies to each invoice paid late, not to all invoices concerned. It is due per invoice.
Failure to comply with the deadlines and the failure to mention penalties for delay in the GCS shall be punishable by an administrative fine of:
- €75,000 and up to €150,000 for a natural person in the event of repeated fault,
- €2 million and up to €4 million for a legal person in the event of repeated fault.
The fact that a debtor requires his supplier to delay the issue of the invoice in order to extend the period for actual payment shall be considered to be an abuse and shall be punished.
Purchases free of VAT
Purchases of goods and services in exemption from VAT delivered outside the EU: titleContent can be paid up to 90 days from the invoice date.
The contract of sale must indicate this period.
The general terms and conditions of sale (GTC) They must also specify the conditions of application and the interest rate for penalties due in the event of late payment. There is a delay if the payment is made after the date mentioned on the invoice.
The interest rate provided by the GTC generally corresponds to the key interest rate (refinancing rate or Refi) of the European Central Bank (ECB), in force on 1er January or 1er July plus 10 points.
Example: 10.00% (0.00 + 10) for penalties due since 1er July 2019.
With effect from: | ECB rates | Increased interest rate |
|---|---|---|
March 16, 2016 | 0% | 10% |
December 9, 2015 | 0.05% | 10.05% |
September 10, 2014 | 0.05% | 10.05% |
June 11, 2014 | 0.15% | 10.15% |
November 13, 2013 | 0.25% | 10.25% |
May 8, 2013 | 0.5% | 10.5% |
However, it may be lower than the minimum rate of 6.18% (from 1er January 2023), corresponding to 3 times the statutory interest rate (= 3 x 2.06%).
The rate, either annual or monthly, can be converted to a daily rate. It is then multiplied by the number of days between the due date and the receipt date (or the date on which the calculation is made, if the payment has not yet been made).
It is applied to the amount TTC: titleContent of the invoice.
Penalties are due without the need for a reminder: a registered letter is not required to trigger the right to collect late penalties.
They shall run from the day following the settlement date shown on the invoice or, otherwise, from 31e the day following the date of receipt of the goods or the end of performance of the service.
They shall not be subject to VAT: titleContent.
A lump sum of €40 shall be due to the creditor for recovery costs in connection with any late payment.
It applies only to activities subject to the Commercial Code (not commercial leases and insurance, for example).
However, the indemnity shall not apply if the debtor is in the course of the safeguard, recovery or bankruptcy proceedings.
This lump sum is in addition to late penalties, but is not included in the basis for calculating penalties.
Even if the creditor company is not obliged to do so (it is then a commercial gesture), the compensation must be mentioned in the terms of settlement of all contractual documents (GTC: titleContent, invoice in particular).
If the recovery costs actually incurred are higher than this lump sum, additional compensation may be claimed on the basis of justification. This is particularly the case with the use of a firm responsible for revival and formal notice.
As with penalties for late payment, the compensation is due the day after the due date and is not subject to VAT.
The compensation is due in full even in the case of partial payment of the invoice at the due date, regardless of the duration of the delay (it is not due for each day of delay).
FYI
the compensation applies to each invoice paid late, not to all invoices concerned. It is due per invoice.
Failure to comply with the deadlines and the failure to mention penalties for delay in the GCS shall be punishable by an administrative fine of:
- €75,000 and up to €150,000 for a natural person in the event of repeated fault,
- €2 million and up to €4 million for a legal person in the event of repeated fault.
The fact that a debtor requires his supplier to delay the issue of the invoice in order to extend the period for actual payment shall be considered to be an abuse and shall be punished.
Who can help me?
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- Commercial Code: Articles L441-10 to L441-16Time limits for payment and administrative penalty
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- Order of 26 December 2022 on the fixing of the statutory interest rate
- General Terms and Conditions of Sale (GTC)
- Business-to-Business Billing
- VAT exemption
- Key (or refinancing) rates of the European Central Bank (ECB)Banque de France
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