Important Update on Payment Conditions in Public Procurement in Belgium

The Belgian government has implemented significant changes to payment rules in public procurement, effective January 1, 2025. These changes are designed to streamline processes and ensure timely payments to suppliers and contractors. The Royal Decree of August 12, 2024,  was published in the Belgian Official Gazette on September 16, 2024, follows the CJEU ruling C-585/20 of October 20, 2022. The CJEU ruling C-585/20, issued on October 20, 2022, addressed the interpretation of EU payment directives in the context of public procurement. The court emphasised the importance of timely payments to suppliers and contractors, reinforcing that verification and payment periods should not exceed the stipulated limits unless justified by exceptional circumstances. This ruling underlined the necessity for member states to ensure compliance with EU directives to prevent delays and financial strain on businesses involved in public contracts. 

Key Changes Effective January 1, 2025

Currently, a distinction is to be made between the verification period of the invoice (default period: 30 days) and the payment period (default period: 30 days). In principle, subject to certain particularities, the 30-day payment term runs from the date on which the verification is completed (max. 30 days), provided that the contracting authority is at the same time in possession of the invoice duly drawn up and any other documents required. For public procurements below €30,000, the standard B2B rules apply unless the procurement documents provide otherwise.

The new Royal Decree provides several changes: 

• Verification and payment operations will now need to be completed within a single processing period of 30 days. The calculation of this period depends on the subject-matter of the public procurement: 
  • Works Contracts: The 30-day period starts upon receipt of the claim statement and detailed work report by the contracting authority. Additional documents may be required for verification, as specified in the contract documents. If the contractor fails to provide a sufficiently detailed report or required documents, the contracting authority may reject the claim statement, delaying the processing period.
  • Supply Contracts: The 30-day period begins at delivery, provided the contracting authority has received a properly issued invoice and any other required documents.
  • Service Contracts: The period starts from the written confirmation of the total or partial completion of services, with the date and modalities specified in the contract documents. As with supply contracts, a properly issued invoice and any other required documents must be provided.
• The consequences of violating local mandatory limits depend on whether the deviation is included in the tender documents or the bid. In the tender documents, while shorter terms are always permissible, longer terms are subject to stringent conditions:  
  • The extended processing period must be explicitly stated in the contract documents.
  • The extension must be objectively justified by the particular nature or characteristics of the contract.
  • The processing period cannot exceed 60 days.
  • The extension must not constitute a manifest abuse towards the contractor.

Any extension in violation of the applicable rules would be deemed unwritten, reverting to the 30-day default.

Please note that Bidders may not include provisions in their bid or annexed terms and conditions that extend or lower the verification and payment terms. Failure to comply could result in the contracting authority considering it a substantial irregularity and rejecting the bid.

Finally, the new regulatory framework provides some exceptions: 

• Low-Value Contracts: Unless otherwise agreed, payment is made within 30 days from the day following the receipt of the invoice or equivalent payment request, or the receipt of goods/services if the invoice date is uncertain or received before the goods/services.
• Advance Payments: Advances must be paid within 30 days from the day following the written and dated payment request. A longer payment period can be agreed upon if objectively justified by the contract’s nature or specific elements.

Conclusion

The new payment conditions introduced by the Royal Decree aim to streamline and expedite the payment process in public procurement, ensuring timely payments and reducing financial strain on contractors and suppliers. It is crucial for all parties involved in public procurement to familiarise themselves with these changes and ensure compliance to avoid any potential issues or delays.