The European Communities (Late Payment in Commercial Transactions) Regulations 2002 came into operation on 7 August 2002 to combat late payment in commercial transactions.
This law was implemented in Ireland by Regulations which provide that penalty interest will become payable if payments for commercial transactions are not met within 30 days, unless otherwise specified in a contract or agreement.
The Regulations, which apply equally to the public and private sectors, provide an entitlement to interest if payment for commercial transactions is late.
Unless otherwise specified in an agreed contract, the interest rate will be the European Central Bank main refinancing rate plus 7 percentage points.
The ECB rates in force on 1 January and 1 July apply for the following six months in each year. Only one rate will apply to a late payment – that is the rate in force on the payment date.
From the 1 July 2011, the late payment interest rate is 8.25% per annum (that is based on the ECB rate of 1.25% plus the margin of 7%).
That rate equates to a daily rate of 0.023% and penalty interest due for late payments should be calculated on a daily basis.
If you would like further help or guidance in relation to these regulations, please contact a member of our professional Team on +353 74 912 2820 or email us at: email@example.com.
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