The Dutch government is to bring in legislation reducing the maximum terms on which large companies can pay their SME suppliers from 60 days to 30 days. The change is one of the results of a reassessment of the current Large Business Payment Terms Act. That exercise showed that average payment terms increased from 41 days in Q1 2019 to 41.4 days in Q2 2019.

Joost van Hondel, director of the (pay me now) initiative, set up to encourage earlier payment, said, “The announced legislative amendment shows that the Cabinet is also convinced that things have to be done differently. A legal payment term of no more than thirty days will give a huge boost to liquidity for SMEs. That is what we have been doing from the beginning. Hopefully, this will soon be followed up in a European context, to avoid avoidance behaviour. ”

The new bill is expected to come into effect in The Netherlands in Autumn 2020.