Both companies and public administrations are subject to the Late Payment Law (Ley de Morosidad), which means they have an obligation to comply with the payment deadlines established in that law. According to Article 4 of the Late Payment Law, if the contract does not establish a payment deadline, the debtor must pay within 30 calendar days after receiving the goods or services. In addition, the payment deadline agreed between the parties cannot exceed 60 calendar days.
These obligations already existed before the “Crea y Crece” Law. However, after the approval of this law, changes have been introduced in the General Subsidies Law, such as the prohibition of obtaining subsidies for companies that do not comply with payment deadlines, and the modification of the definition of eligible expenses to include only those that have been paid within the deadline.
These new regulations have a direct impact on subsidy applicants and their expenses. It is important to understand who is required to comply with these new regulations, how companies must demonstrate compliance with payment deadlines, and when these new regulations apply.
The most relevant updates introduced in the modification of the General Subsidies Law are the following:
- Companies that do not comply with payment deadlines established in the Late Payment Law cannot receive the status of beneficiary or collaborating entity for subsidies over 30,000 euros.
- The definition of eligible expenses has been modified to include only those in which a beneficiary company has incurred in its commercial operations and that have been paid within a maximum period of 60 days from the invoice date. Otherwise, these expenses will not be considered eligible for subsidies.
As for the entities required to comply with these regulations, all companies, including societies, must comply with these obligations, except public administrations that do not belong to the business public sector.
Compliance with the obligations will be individually verified to determine the eligibility of expenses, and the payment moment criterion will be applied.
To demonstrate compliance with these obligations, companies can submit a responsible declaration and abbreviated profit and loss accounts, or a certification issued by an auditor registered in the Official Register of Auditors of Accounts.
At addwill, we advise you to review the payment deadlines of invoices applied to grants awarded in order to ensure compliance with the maximum payment deadline of 60 days.
We will be happy to help you with any doubts or questions that arise in this regard, or if you wish to expand the information or require advice on this subject from our professional experts.
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