These are some of the amendments to the General Law on Subsidies that affect the Late Payment Law
Below we summarize the main changes in the General Law on Subsidies that affect the Law on Dilatoriness, which establishes a 30-day payment term to suppliers in order to be eligible to be a beneficiary of subsidies over €30,000. These modifications affect all subsidies published since October 2022 and pending resolution.
Recently, Royal Decree-Law 5/2023 has been published, which amends the General Law on Subsidies and affects the Law on Dilatoriness. Specifically, it is Articles 214 and 215 that have introduced the main novelties. This new regulation affects all subsidies published since October 2022 and pending resolution.
By means of the new Royal Decree-Law, Article 13 of the General Law on Subsidies is thus modified in section 3 bis by means of which it is established that, for subsidies of more than €30,000, individuals and legal entities subject to the Law on Late Payments, by which the payment deadlines are established in order to obtain the status of beneficiary. In other words, they must comply with the mandatory payment term to suppliers of 30 calendar days, which may be extended up to a maximum of 60 calendar days, if so stipulated in the contract between the parties.
As a novelty, this section also adds that “any financing that allows the supplier to collect payment in advance shall be considered valid for the purposes of compliance with this section, provided that the cost is borne by the customer and there is no possibility of recourse to the supplier in the event of non-payment”. It is thus understood that any method of payment or financing that allows the supplier to be paid in advance will be valid, provided that the cost is borne by the customer and there is no possibility of recourse to the supplier in the event of non-payment. In this case, it would be possible for confirming to be valid as a payment made for performance.
Requirements and accreditation of performance
Another novelty has to do with the accreditation of the level of compliance established for the cases of legal entities that, in accordance with accounting regulations, cannot present an abridged profit and loss account. In this case, this may be done in two ways:
(a) Certification issued by an auditor registered in the Official Register of Statutory Auditors containing an itemized transcription of the information on payments described in the report of the last audited annual accounts, when it is clear from them that the level of compliance with the payment deadlines established in the Law on Dilatoriness is reached. This certification shall be valid until the annual accounts for the following year are audited.
b) In the event that it is not possible to issue the above certificate, an Agreed Procedures Report (IPA), prepared by an auditor registered in the Official Register of Statutory Auditors, shall be valid.
Once the certificates have been issued, they shall be valid for a period of 6 months from the date of issue.
Regulation of the IPA
In addition, an article has been introduced to regulate the aforementioned “Agreed Procedures Report” (IPA), which sets out the manner in which it must be prepared based on the review of the documentation provided by the audited company, specifically on the detail of invoices pending payment to suppliers, excluding those corresponding to suppliers that form part of the same group of companies (within the meaning of Article 42 of the Commercial Code). Thus concluding compliance with the payment deadlines according to the Delinquency Law, or in the event that exceptions are detected, that these do not prevent the required level of compliance from being reached. For the purposes of this Law, it will be understood that the company complies with the condition of beneficiary if the PPI reflects a level of compliance with the payment terms equal to or higher than that established in Law 18/2022, i.e. 90% of the total invoices.
What is the deadline?
Unless the regulatory bases foresee another term or moment of accreditation, the accreditation of compliance will be carried out within 10 working days from the notification of the provisional resolution proposal. In the event that the hearing is dispensed with, the accreditation shall be carried out within 10 days from the notification of the requirement addressed to that effect by the instructing body, prior to the proposal of the definitive resolution.
However, if it is not possible to obtain the auditor’s certification or the IPA in due time, proof of having requested said accreditation shall be provided and shall be presented, once obtained, immediately and, in any case, prior to the award decision.
