• Does your contractor fail to pay for services rendered? Soon, UOKiK will impose fines on such unreliable entrepreneurs.
• The act on counteracting payment backlogs is about to be adopted by the parliament.
• Find out more about UOKIK’s new rights.

Payment backlogs are one of the biggest problems of the Polish economy. Over 80% of Polish entrepreneurs do not receive their money on time, therefore very often they themselves are unable to make all their payments due.

- Payment problems can cause many companies, especially smaller ones, to go bankrupt. That is why it was urgent to solve this problem. Based on new regulations payment deadlines will be shorter and severe economic sanctions will be imposed against those who do not pay on time. Micro-, small and medium-sized entrepreneurs will be particularly protected. Fines will be imposed by the Office of Competition and Consumer Protection, says the President of UOKiK, Marek Niechciał.

The act on amending certain acts to limit payment backlogs is to become effective on
1 January 2020. On Friday, 19 July, the Sejm will vote on senate amendments. Once the act is passed, it will be presented to the president for his signature.

The act contains a whole set of legal solutions (tax changes, civil law and administrative solutions), aimed at reducing payment backlogs. One of the important changes is the shortening of payment deadlines in transactions between entrepreneurs or other entities covered by the act. Public entities will have to pay for services and products in 30 days, with the exception for medical institutions that will have 60 days to make all their payments due. As for transactions involving micro-, small or medium-sized companies as creditors and larger contractors as debtors, the payment deadline may not exceed 60 days. The amount of interest that an entrepreneur may demand has also been increased if the other party to a commercial transaction does not pay for goods or services.

The role of UOKiK

The Office of Competition and Consumer Protection will intervene in cases when delays in payment are excessive. UOKiK will be able to react if the sum of outstanding payments due to an entrepreneur over the next three months will amount to at least PLN 5 million to 2021 and PLN 2 million in subsequent years.

Proceedings will be initiated ex officio and will have to be completed within 5 months. Everyone, both an entrepreneur who fell victim to a payment backlog, and a person suspecting that an entity does not pay its contractors, may notify UOKiK that payments are not made on time. During the proceedings, the Office will audit payments from two years preceding the initiation of the proceedings. Fine will be calculated using the formula* based on the value of late payments, the delay period and statutory interest rate for delay in commercial transactions. A fined entrepreneur will have to right to request its case to be re-examined before UOKiK and, if necessary, file a complaint with a provincial administrative court.

What will the amount of your fine depend on?

We will react strongly to late payments, but we will consider mitigating circumstances. Economic sanctions may be reduced if a given debtor repays the overdue amounts. We will not fine entities that are themselves victims to payment backlogs. However, those who fail to pay for services or products on a regular basis will not be tolerated – they will have to pay more, says the President of UOKiK, Marek Niechciał.

The Office will be able to cut the fine down by 20% if an entrepreneur repays the amount due with interest within 14 days from the delivery of the UOKiK’s decision to initiate proceedings. The Office may also reduce the fine by further 10% if a debtor immediately pays the fine and waives the right to file a request for the case re-examination by the office. Entities that do not pay their contractors because they themselves have not received money from their debtors will not be fined. However, if UOKiK finds out that previously fined entrepreneur got behind with its payments again, and excessively, the next fine imposed may be increased by 50%.

UOKiK will be able to carry out inspections with an entrepreneur and demand that necessary information and documents be provided. According to the amendments, the cooperation between the Office of Competition and Consumer Protection and the State Treasury Administration will be closer. UOKiK will be able to obtain information that will allow it to avoid initiating proceedings against entrepreneurs making their payments on time; therefore, the Office’s operations will focus on entities that create payment backlogs.

Every year, by the end of the first quarter, the President of UOKiK shall provide the Prime Minister with a report on the above mentioned proceedings.

*JKP (fine) = WŚ × n/365 × OU, where:

JKP - individual fine for failure to make payment or for making late payment

WŚ - value of payment that has not been made at all or was made late

n - the number of days from the maturity date of payment that has not been made at all or was made late to the last day of the period covered by the proceedings, or to the day the payment is made if it was made within the time frame covered by the proceedings

OU - statutory interest for delay in commercial transactions, determined as of the day the decision to impose an administrative fine was made

Additional information for the media:
UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: biuroprasowe@uokik.gov.pl
Twitter: @UOKiKgovPL