Prompt Payment of Accounts Act, 1997

Prompt Payment of Accounts Act, 1997 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.ie) Translations (Houses of the Oireachtas) Government Publications for Sale EU Law (EUR-Lex) FAQ Disclaimer Feedback Helpdesk Search Baile Reachtaíocht Achtanna an Oireachtais Ionstraimí Reachtúla Reachtaíocht Réamh-1922 Bunreacht Acmhainní Seachtracha Billí (Tithe an Oireachtais) Iris Oifigiúil Achtanna Athbhreithnithe (CAD) (An Coimisiún um Athchóiriú an Dlí) Liosta Rangaithe Reachtaíochta Aistriúcháin (achtanna.ie) Aistriúcháin (Tithe an Oireachtais) Foilseacháin Rialtais ar Díol Dlí AE (EUR-Lex) CCanna (Ceisteanna Coitianta) Séanadh Aiseolas Deasc chabhrach Cuardach TitleTeideal Year(s) or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 1997 Prompt Payment of Accounts Act, 1997 Prompt Payment of Accounts Act, 1997 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Open PDFOscail PDF Print Full ActPriontáil an tAcht Iomlán Number 31 of 1997 PROMPT PAYMENT OF ACCOUNTS ACT, 1997 ARRANGEMENT OF SECTIONS Section 1. Interpretation. 2. Application. 3. Amendment of list of purchasers. 4. Prompt payment of accounts. 5. Return of invoice for correction. 6. Information to accompany payment. 7. Amounts payable in case of dispute. 8. Supplier may submit dispute to arbitration. 9. Prompt payment to subcontractors. 10. Minister shall fix rates of interest penalty and may fix prescribed payment date. 11. Restrictions on power to extend payment periods. 12. Disclosure of payment practices of purchasers. 13. Duty of auditors. 14. Tax clearance certificates and withholding tax. 15. Regulations and laying of orders and regulations before Oireachtas. 16. Short title and commencement. SCHEDULE Purchasers Acts Referred to Arbitration Acts, 1954 and 1980 Companies Act, 1963 1963, No. 33 Finance Act, 1987 1987, No. 10 Finance Act, 1995 1995, No. 8 Harbours Act, 1946 1946, No. 9 Harbours Act, 1996 1996, No. 11 Local Government Act, 1941 1941, No. 43 Number 31 of 1997 PROMPT PAYMENT OF ACCOUNTS ACT, 1997 AN ACT TO PROVIDE FOR THE PROMPT PAYMENT OF BUSINESS ACCOUNTS BY CERTAIN PUBLIC SECTOR AND OTHER PURCHASERS OF GOODS AND SERVICES, AND FOR RELATED PURPOSES. [21st May, 1997] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS: Interpretation. 1.—(1) In this Act, unless the context otherwise requires— “invoice” means a written document or electronic transmission provided by a supplier requesting payment for goods or services provided to or on the directions of a purchaser; “the Minister” means the Minister for Enterprise and Employment; “prescribed payment date”, in relation to the provision of goods or services, means— (a) the date on which payment is due under the terms of any written contract for the provision of the goods or services, or (b) where there is no written contract or the written contract does not provide for the date of payment, 45 days after— (i) receipt by the purchaser of an invoice for the payment due, where the invoice is received after the completed delivery of the goods or services, or (ii) the delivery of the goods or services, where the delivery is made at the time of or after receipt by the purchaser of an invoice therefor, or such lesser number of days as the Minister may, by order under section 10 (2), prescribe; “purchaser” means— (a) a person or body specified in the Schedule , (b) a subsidiary (within the meaning of the Companies Act, 1963 ) of a person or body referred to in paragraph (a), where the subsidiary is not already specified in the Schedule , or (c) a person (“the main contractor”)— (i) who obtains goods or services from another person to supply to, or (ii) contracts with another person for that other person to provide goods or services on the main contractor's behalf to, a person or body, or subsidiary, referred to in paragraph (a) or (b) of this definition; “supplier” means a person who provides goods or services to or on the directions of a purchaser under a contract between that person and the purchaser. (2) For the avoidance of doubt, a purchaser referred to in paragraph (a) or (b) of the definition of “purchaser” in subsection (1) may for the purposes of this Act be a supplier in relation to the supply of particular goods or services. (3) For the purposes of this Act, an invoice sent by post or an electronic transmission comprising an invoice shall be taken to have been received in the normal course of the post or that transmission service, unless the contrary is proved. (4) In this Act— (a) a reference to a section is a reference to a section of this Act, unless it is indicated that reference to some other enactment is intended, (b) a reference to a subsection, paragraph or subparagraph is a reference to the subsection, paragraph or subparagraph of the section in which the reference occurs, unless it is indicated that a reference to some other provision is intended, (c) a reference to the Schedule is a reference to the Schedule to this Act, and (d) a reference to any other enactment shall be construed as a reference to that enactment as amended, extended or adapted by or under any enactment made subsequent to that enactment. Application. 2.—This Act shall apply only to and in relation to goods and services supplied on or after the commencement of this Act. Amendment of list of purchasers. 3.—(1) The Minister may, by order, amend the Schedule by adding to, deleting from, or substituting the name of a person or body for that of a person or body in, a list therein. (2) If the Minister amends the Schedule by deleting the name of a person or body, the Minister shall specify in the order the reason for the deletion. Prompt payment of accounts. 4.—(1) A purchaser who obtains goods or services from a supplier shall pay for them by the prescribed payment date. (2) A purchaser who does not pay for goods or services by the prescribed payment date shall, subject to sections 5 , 7 and 14 , pay an interest penalty to the supplier in accordance with this section on the amount from time to time outstanding under the contract for the supply of the goods or services. (3) An interest penalty under this Act shall be paid to the supplier for the period beginning on the day after the prescribed payment date and ending on the date on which the payment of the amount due is made. (4) For the purposes of subsection (3), payment shall be taken to have been made when the appropriate amount of cash is received by the supplier, the appropriate amount is credited by, on behalf of, or at the direction of, the purchaser to an account nominated by the supplier, or the supplier is put in a position by the purchaser to be able, by the supplier's own actions, to credit the appropriate amount (for example, by the depositing of a cheque which is subsequently honoured) to such an account. (5) An interest penalty in accordance with this section is not capable of being waived by the supplier, and shall be included with the amount payable for the goods or services without demand for its payment being made by the supplier. Return of invoice for correction. 5.—(1) If, within 10 working days after receiving an invoice for goods or services supplied, a purchaser returns the invoice to the supplier because it is not adequate or sufficiently accurate on which to make payment, and at the same time gives to the supplier a written statement identifying the defects that prevent the payment being made, interest penalty in relation to the goods or services shall not accrue until the expiration of 10 working days after the receipt by the purchaser of a proper corrected or replacement invoice, or until the prescribed payment date, whichever is the later. (2) If a purchaser returns an invoice to a supplier in circumstances referred to in subsection (1) but later than 10 working days after receiving it, interest penalty in relation to the goods or services shall not accrue until the expiration of 10 working days after the receipt by the purchaser of a proper corrected or replacement invoice reduced by a number of working days equal to the number of working days the purchaser was late in returning the invoice, or until the prescribed payment date, whichever is the later. (3) In this section “working day” means a day which is not a Saturday, Sunday or public holiday. Information to accompany payment. 6.—Each payment in which an interest penalty is required by this Act to be included shall be accompanied by a notice stating the amount of the interest penalty included and the rate by which, and the period for which, the interest penalty was computed, and such other information, if any, as the Minister may prescribe. Amounts payable in case of dispute. 7.—(1) Where there is a dispute between a purchaser and supplier as to the amount due and payable under a contract for the supply of goods or services, the purchaser shall not be liable to pay an interest penalty in respect of any of those goods or services which— (a) the purchaser and supplier agree, or (b) a court or arbitrator before which or whom the dispute is brought for determination or settlement decides, are genuinely in dispute and the purchaser has, before the prescribed payment date, paid for the goods or services, if any, agreed or determined not to be in dispute. (2) For the purposes of subsection (1), goods or services which are complementary and designed to be used together with goods or services which are in dispute shall also be taken to be in dispute. Supplier may submit dispute to arbitration. 8.—(1) Subject to any written contract, where there is a dispute between a supplier and a purchaser on any matter relating to or affecting the payment of, or the purchaser's obligation to pay, an interest penalty under this Act, the supplier may submit the dispute to arbitration by an arbitrator appointed by agreement between the parties or, in the absence of such agreement within 14 days after either party has given to the other a written request to concur in the appointment of an arbitrator, appointed by the President of the Law Society of Ireland or such other person as the Minister may prescribe. (2) The Minister may make regulations— (a) prescribing a person to appoint an arbitrator for the purposes of subsection (1), (b) modifying the provisions of the Arbitration Acts, 1954 and 1980, in their application to arbitration under this Act, or (c) prescribing additional or other provisions in relation to such arbitration. (3) Subject to any regulations made under subsection (2), the Arbitration Acts, 1954 and 1980, shall apply to and in relation to an arbitration under subsection (1). Prompt payment to subcontractors. 9.—Where there is a contract (“the first contract”) between a purchaser and a supplier for the supply of goods or services and the supplier is also a purchaser under a contract (“the second contract”) for the acquisition or supply of the goods or services to be provided under the first contract— (a) where the first contract is in writing and provides for a date by which the payment of the agreed price for the supply of the goods or services shall be made, the period used in calculating the prescribed payment date for the second contract shall be the same number of days as the period between the supply of the goods or services and the payment for the goods or services provided for in the first contract or, if the second contract is in writing, any lesser period specified in the second contract, or (b) where the first contract is not in writing or is in writing but does not provide for the date of payment, the prescribed payment date for the second contract shall be 45 days— (i) after receipt by the purchaser of an invoice for the payment due, where the invoice is received after the completed delivery of the goods or services, or (ii) after the delivery of the goods or services, where the delivery is made at the time of or after receipt by the purchaser of an invoice therefor, or the least of such lesser number of days— (iii) as may be specified in the second contract (if the second contract is in writing), or (iv) as the Minister may, by order under section 10 (2), prescribe. Minister shall fix rates of interest penalty and may fix prescribed payment date. 10.—(1) The Minister shall, by order, after consultation with the Minister for Finance, fix the rate of interest penalty payable pursuant to section 4 (2) and may, in the same manner, amend such an order. (2) The Minister may, by order, after consultation with the Minister for Finance, prescribe a payment date that is earlier than the 45 days referred to in the definition of “prescribed payment date” in section 1 (1) or in section 9 (b), and may, by order— (a) amend such an order, or (b) revoke the order and make another order in its place. Restrictions on power to extend payment periods. 11.—(1) Where the Minister is of the opinion that the practices of a purchaser specified in the Schedule in contracting for payments for the supply of goods or services have the effect of allowing the purchaser credit terms that are unreasonable in the circumstances, the Minister may, after— (a) advising the purchaser of, and the grounds for coming to, that opinion, (b) giving the purchaser an opportunity to make representations to the Minister, and (c) consulting with the Minister for Finance, by order, direct that the purchaser shall not be capable of agreeing a time of payment for the supply of goods or services that is later than the 45 days referred to in paragraph (b) of the definition of “prescribed payment date” in section 1 (1) or such earlier date as is from time to time fixed under section 10 . (2) An order under subsection (1) may be expressed to apply generally or in relation to a particular supplier or goods or services and may be subject to such conditions, if any, as the Minister thinks fit. (3) The Minister may by order, amend or revoke an order made under this section. (4) While an order made under this section remains in force, any contract entered into by the purchaser to whom it relates shall be construed accordingly. Disclosure of payment practices of purchasers. 12.—(1) Where a purchaser specified in the Schedule is required by statute to publish an annual report, the report shall include details of the purchaser's payment practice in the period covered by the report. (2) A purchaser specified in the Schedule who is not required by statute to publish an annual report shall, within the prescribed time, if any, lodge with the Minister an annual review of its payment practice in the period covered by the review and the Minister shall, as soon as practicable after receiving the report, cause a copy to be laid before each House of the Oireachtas. (3) The details to be included for the purposes of this section in an annual report or annual review of payment practices shall include such, if any, as the Minister may prescribe. Duty of auditors. 13.—An auditor auditing the affairs of a purchaser specified in the Schedule shall report on whether, in all material respects, the purchaser has complied with the provisions of this Act. Tax clearance certificates and withholding tax. 14.—(1) Nothing in this Act shall be construed as requiring the payment of an amount due to a supplier who has refused or failed to comply with a request from the purchaser to show a tax clearance certificate in accordance with the scheme referred to in section 177 of the Finance Act, 1995 . (2) If a supplier does not, within seven days after being so requested by a purchaser, show a tax certificate as required, the time for calculating the prescribed payment date shall cease to run from the expiration of that seven day period until the tax clearance certificate is shown or, where the prescribed payment date is a date specified in a written contract, the date for payment shall be deemed to be deferred for an equivalent period. (3) Nothing in this Act shall be construed as affecting the powers and duties of an accountable person as defined in section 14 of the Finance Act, 1987 , to deduct from any payment to a supplier the appropriate tax within the meaning and in accordance with section 15 of that Act. Regulations and laying of orders and regulations before Oireachtas. 15.—(1) The Minister may make regulations prescribing matters— (a) required or permitted by this Act to be prescribed (unless the context requires the matters to be prescribed in some other way), or (b) the Minister considers necessary or expedient to be prescribed for carrying out or giving effect to the provisions of this Act, and in particular prescribing— (i) the form of, and information to be included in, invoices for the purposes of this Act, and (ii) rules to apply to disputes about the accuracy or adequacy of invoices, the fact of supply, and such other matters as the Minister considers relevant to the determination of disputes, including the returning of invoices for correction or replacement and the extension of times for payment or the taking of any action in the circumstances of particular cases. (2) Every order (other than an order under section 16 (2)) or regulation made under this Act shall be laid before each House of the Oireachtas as soon as practicable after it is made and, if a resolution annulling the order or regulation is passed by either such House within the next subsequent 21 days on which that House has sat after the order or regulation is laid before it, that order or regulation shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder. Short title and commencement. 16.—(1) This Act may be cited as the Prompt Payment of Accounts Act, 1997. (2) This Act shall come into operation on such day as the Minister may by order appoint. SCHEDULE Purchasers sections 1 and 3 . 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