What is happening and when?

A radical new law aimed at combating payment delays has been just approved by the lower house of the Polish Parliament and is likely to be adopted before Parliamentary elections in October/November this year and come into effect from 1 January 2020.

It will affect most companies operating in Poland, especially non-SMEs (>250 employees and >EUR 50m turnover), by establishing public oversight over each company payment practices, imposing new reporting obligations, shortening payment terms and introducing considerable changes to the current income tax and competition law regimes.

Why bother?

It is proposed among other things, that:

  • Payments delayed by more than 90 day after the payment date will increase taxable income for debtors and decrease it for creditors. All affected tax submissions will have to be amended.

  • Executives will be personally liable for reporting payment terms and payment discipline to the tax authorities. The first reports will be made for 2020.

  • The Competition Authority will oversee the payment practices of companies on the basis of data received from tax authorities and whistle-blowers. Non-compliance will be deemed to be an unfair competition. All proceedings and decisions will be publicly announced.

  • The default interest rate in B2B relationships will be increased to the NBP ref rate plus 10% (currently 11,5%).

  • Payment terms in non-SME vs SME dealings will be limited to 60 days. All non-SMEs will have to classify each contractor and will not be able to rely on their declarations.

  • All payment terms above 60 days will be subject to an enhanced “gross unfairness” test. Sellers will have three years after the end of a contract to claim interest. The burden of proof will be shifted onto buyers.

  • The creditor will have a discretional right to terminate an agreement with the payment term exceeding 120 days.