After its first implementation on July 1, 2023, the law on payment terms entered a second phase on January 1, 2024. It will apply to individuals and legal entities with sales of less than 50 million Dirhams (USD 5 million) exclusive of tax, and more than 10 million Dirhams (USD 1 million) exclusive of tax, for the 2023 financial year.
This sales bracket represents a larger pool of entities than those with sales of 50 million Dirhams or more exclusive of tax. The companies concerned are therefore called upon to take steps to adapt to the new provisions governing payment terms between merchants. The first provision is that under article 2 of law n°69-21, the provisions of articles 78-3 to 78-10 will apply to invoices issued from January 1, 2024. Suppliers are also required to state the payment terms applied on their invoices and other documents in lieu of invoices. Indeed, Article 78-1 of Law no. 69-21 states that a payment period for transactions must be included among the terms of payment that the supplier is obliged to communicate before any commercial transaction is entered into, to any trader who so requests. If not agreed between the parties, the term of payment corresponds, by law, to the 60th day following the date of issue of the invoice. If agreed by both parties, the payment term may not exceed 120 days from the invoice date. It is only after this period that the 3% fine, increased by 0.85% for each additional month of delay or fraction of a month, becomes applicable. This fine is payable on the amount of each invoice not paid on time, all taxes included. For this reason, many of our business partners have signed agreements to avoid paying the penalty in the last quarter, some of those business partners having done so at the last minute.
For the time being, the late payment penalty provided for by law only applies to invoices of 10,000 dirhams (USD 1 000) or more, inclusive of tax. This provision will only be extended to all amounts from January 1, 2025.
In the case of invoices that are the subject of a dispute brought before the court, the fine counter is suspended until a final judgement has been rendered which has acquired the force of res judicata. If necessary, the fine counter will resume after the judgment.
From January 1, 2025, the law on payment deadlines will apply to entities with sales of over 2 million Dirhams (USD 200,000) and less than or equal to 10 million Dirhams (USD 1 million) exclusive of tax. Finally, these represent the bulk of businesses. On the other hand, entities with sales of less than 2 million Dirhams exclusive of tax (USD 200,000) will remain outside the scope of the law unless there is a change after the year 2025, when the legislation on payment terms will be fully applied.
Hassan EL ARIF
