Last Updated on Thursday, 21 July, 2022 at 9:21 am by Andre Camilleri
As of 1st July 2022, Maltese businesses have been notified by the Malta Association of Credit Management (MACM), that the legal interest rate in the event of late payment in commercial transactions is 8%.
Local Suppliers of goods and services (Creditors) should note that:
Creditors can now charge 8% interest plus the European Central Bank (ECB) reference rate on late payments, from the date after the agreed end-of-term payment.
In the case where the payment terms are not specified in the contract of sale, “the creditor is entitled to interest on late payment following thirty calendar days from the date of receipt of goods or services, or thirty days from the date of invoice”.
“The period for payment agreed by the parties in the contract of sale may not exceed 60 calendar days. However, the parties may expressly agree for a longer period as long as the extension of time is not grossly unfair to the supplier of goods and services (Creditor).”
The creditor has no obligation to remind the debtor of the amount that is due.
Transactions between undertakings and public authorities shall have a period of payment of “thirty calendar days if not expressly agreed in the contract and may not exceed sixty calendar days if fixed in the contract”.
“However, in case the client (the debtor) is a public authority which carries out economic activities of an industrial or commercial nature and if the public authority provides health care, and the payment period is not expressly fixed in the contract, the payment period shall not exceed sixty calendar days.”
An agreement between the creditor and the debtor to extend the date of receipt of the invoice is null and void.
The creditor is entitled to reasonable compensation for the Supplier’s own recovery costs at a minimum of €40.
“When the contract of sale provides for the retention of title between the seller and the buyer, the seller is entitled to retain title over the goods until the price has been paid in full by the buyer.”