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Starting point for payment times: invoice date or date of receipt of the invoice?

12/07/2017

The CEPC (French commission examining commercial practices) was asked to give an opinion on the procedure for calculating the 60-day payment time when the supplier is located outside France. More specifically, it was asked whether this payment time could be calculated from the date of receipt of the invoice rather than its issue date.

As you will know, article L.441-6 of the French Commercial Code introduced maximum payment times. The standard payment time is therefore 60 days from the date of invoice, providing that the invoice is issued on the date the sale takes place, pursuant to article L.441-3 of the French Commercial Code. At most it was accepted in business administration that the completion date should be understood as the date of delivery of the goods for a sale of goods or the date the service is provided for provision of services (DGCCRF memo no. 5322 of 3 February 1988).

For the first time, the CEPC provides us with an analysis of the starting point for calculating the payment time, albeit a fairly confusing one (notice no. 17-5 of 22 March 2017), and sidesteps the question of whether French regulations apply to payment times between a supplier located outside France and a purchaser located in France. It refers applicants to its fairly vague notices on this issue, no. 16-1 of 10 February 2016 and no. 16-12 of 24 June 2016.

Having emphasised that calculation of the contractual payment time can only begin from the date of invoice and not from the date of receipt of the invoice, the CEPC presents three case studies to illustrate its response:

  • the invoice is issued on delivery of the goods: in that case, the invoice is issued at the same time as delivery of the goods and constitutes the starting point for calculating contractual payment times (article L.441-6 I, subparagraph 9 of the French Commercial Code);
  • the invoice is issued after delivery of the goods: surprisingly, the CEPC states that in this case it is possible for the parties to calculate from the date of receipt of the goods, by way of exception to article L.441-6 I subparagraph 10. Yet article L. 441-6 I subparagraph 10 of the French Commercial Code, which states that "professionals in a sector, customers and suppliers, may […] also propose to take the date of receipt of the goods or performance of the requested services as the starting point for this payment time. Agreements may be concluded for this purpose by their professional bodies. A decree may extend the new maximum payment time to all operators in the sector or, where relevant, validate the new calculation method and extend it to the same operators." This implies that in order for such an exception to apply, a corresponding agreement would need to be concluded by the professional bodies in a particular sector. This is not a general rule applicable to all operators.
    Except in cases where a tax derogation on deferred invoicing may apply – for sales whose price is not agreed at the time of the sale, but determined by factors beyond the parties' control (e.g. sales contracts linked to a subsequent pricing index to determine the sale price) – it concludes from this that the issue date shall constitute the start date for calculating the contractual 60-day payment time.
  • the invoice is issued on delivery of the goods: in this case, the CEPC states, with reference to fiscal tolerance, that the invoice is issued at the same time as delivery of the goods since the event triggering issuing of the invoice is the physical handover of the goods. It concludes that issuing the invoice constitutes the starting point for calculating contractual payment times (article L.441-6 I, subparagraph 9).

Authors

Nathalie Pétrignet
Nathalie Petrignet
Partner
Paris