The European Parliament and the Council adopted Directive 2011/7/EU on combating late payment in commercial transactions in 2011. The directive aims to support timely payments and promote a payment culture that does not allow low or absent interest for late payment. In particular, the directive protects small and medium-sized enterprises and sets a special responsibility on the authorities to support timely payments in commercial transactions.
In Finland, the directive was implemented through issuing a new Act on Payment Terms in Commercial Contracts (30/2013), which entered into force on 16 March 2013. The act applies to payments effected by entrepreneurs or contracting entities as consideration for goods or services. The contracting entities referred to in the act include state and municipal authorities and state enterprises.
The act provides that payment terms that exclude the creditor's right to interest for late payment are ineffective. The act also includes provisions on contract terms that prohibit collection charges and regulate the amount of the interest for late payment in case the debtor is a contracting entity referred to in the act.
At the same time, amendments will be made, e.g. to the Interest Act and the Act on Debt Collection. A new section 4a will be included in the Interest Act, according to which the debtor must pay annual interest on the delayed amount that is eight percentage points higher than the prevailing reference rate set forth in the Interest Act, if the delay concerns a payment referred to in the Act on Payment Terms in Commercial Contracts.