Late payments

Entrepreneurs are feeling the effects of recent difficult years, which often are a real challenge to their financial stability. Factors such as persistently high inflation, higher and changing business costs and an uncertain economic climate have made it more difficult to do business leading to a marked jump in late payments.

The issue of late payments primarily affects companies in the construction, trade, transport or industry sectors, but also companies in almost every other sector of the economy, and it does not look as if it will stabilise in the near future.

As payment arrears give rise not only to business consequences, but also to a number of tax and reporting implications and the risk of high penalties from the OCCP (Office of Competition and Consumer Protection) , it is necessary to know the obligations and legal options on both the creditor and debtor side that can be helpful in this situation.

MDDP will provide you with comprehensive support in managing the consequences of late payment, combining the experience of legal, tax experts in the areas of CIT, VAT, transfer pricing and accounting and management reporting.

How can we help?

For the creditor

Legal issues:

How to set payment deadlines so that you know when a debtor is actually past due.
Identification of restricted transactions.
Assessment of the existence of large trader status.

Tax issues:

Identification of overdue receivables for tax purposes and bad debts.
Determination of the right to reduce revenue due to non-payment on time and the right to adjust output VAT accordingly.
Calculation of the adjustment amount in CIT and VAT.
Preparation of revenue adjustment information to the tax office.
Verifying the marketability of transactions from a transfer pricing perspective.
Analysis of the issue of disguised financing and the amount of interest for late payment.

Reporting issues:

Support in the preparation and submission of a report on payment terms in commercial transactions for obliged businesses.

For the debtor

Legal issues:

Can a long payment period be agreed with each creditor.
How to extend the payment period.
Assessment of large entrepreneur status.
Assessment of the incidence of excessive delay in payment terms.
Minimise the risk of control by the President of the OCCP.
Representation during proceedings conducted by the President of the UOKiK.
Support in setting up appropriate systems to collect data for the reporting of payment deadlines for obliged businesses.
Support during report writing.
Assistance in extending payment terms including support in negotiations with creditors.

Tax issues:

Identification of liabilities at risk of overdue with adverse tax consequences.
Verifying the marketability of transactions from a transfer pricing perspective.
Analysis of the issue of disguised financing and the amount of interest for late payment.

Reporting issues: