1. Are there any specific legal requirements in respect to payment terms?
Yes, the Law on Financial Discipline, Official Gazette of North Macedonia nos. 187/13, 201/14, 215/15 and 124/19 ("Law on Financial Discipline") regulates specific requirements in respect to payment terms. These requirements refer to:
- Limitation of the maximum payment term that may be agreed upon between the parties up to 120 days;
- Limitation of the maximum payment term in case the payment term is not agreed upon between the parties up to 30 days; and
- The obligation for paying compensation in case of late payment in the amount of MKD 2,400 or approx. EUR 39 in addition to the amount of other costs and penalty interest ("Compensation").
The State Market Inspectorate carries out all supervision of compliance with financial discipline. The Inspectorate is part of the Ministry of Economy.
2. Is there a standard payment term set out in law? If so, what is it?
Yes, the standard payment term is 30 days.
3. In what circumstances may parties contractually agree to extend payment beyond the standard payment term?
The parties may agree to expend the standard payment term for up to 60 days without any requirements in respect to the form of the contract.
An extension of the payment term beyond 60 days requires the payment term to be explicitly provided in a written contract. The maximum period of extension may be up to 120 days and the term must not be grossly unfair to the creditor. It must not be contrary to good commercial practice, the principles of good faith and fair dealing, and it must reflect the nature and the specifics of the product, and the principal of equal rights and obligations of the contracting parties.
4. May an obligation beyond the standard payment term be evidenced in a PO?
Yes, an extension of the standard payment term up to 60 days may be evidenced in a PO or a contract. In case of a longer extension (up to 120 days), written consent is mandatory (i.e. it must be evidenced in a PO or a contract).
5. Are there any penalties for breach of payment term in legislation other that a civil claim by the seller?
Yes, the Law on Financial Discipline cites penalties up to EUR 10,000, which could be imposed on an undertaking in the event of:
- The breach of the agreed-upon payment term, or the standard payment term if the parties have not agreed on a specific payment term; or
- The use of cession, assignation, transferring a debt, approaching a debt, compensation, or other contractual conditions to delay the payment term.
These breaches may result in penalties to the responsible persons within the undertaking of up to 30% of the penalty imposed against the undertaking.
Before initiating a misdemeanor procedure for imposing the above penalties, the State Market Inspectorate must propose a settlement (i.e. if the undertaking acknowledges the breach, it need only pay 50% of the penalty within eight days.
6. Is there any special legislation regarding payment obligations for the COVID-19 situation?
The Government of North Macedonia has adopted a Decree on the application of the Law on Contracts and Torts ("Decree") that regulates a decrease in the statutory penalty interest rate.
According to the Decree, the penalty interest rate is determined monthly and is in the amount of the interest rate published by the National Bank of North Macedonia (or Euribor in case of a foreign currency obligation) applicable on the last day of the previous month, increased by:
- 5% in contracts between undertakings; and
- 4% in contracts between undertaking and a natural entity.
The expiry of the term payments (the standard or the extended payment term) starts the day after one of the following events:
- The debtor received the invoice after fulfilment of the creditor's obligations;
- The creditor fulfilled its duty (i.e. delivered the goods or services and the day of receiving the invoice cannot be determined);
- The creditor fulfilled its duties after receipt of the invoice; or
- The term for examining the received goods or services expired if such a term is agreed upon or stipulated by law, and the debtor received the invoice prior to expiry of this term. (The term for examination cannot be longer than 30 days as of receipt of the goods or services, and it must be agreed upon in writing in fair terms for the creditor).
All rules regarding payment terms must be adhered to regardless of whether the creditor has sent any reminders or notifications to the debtor. The creditor is entitled to statutory penalty interest and compensation even if otherwise agreed.