An EU directive to combat late payment in commercial transactions has been transposed into the Maltese law through a legal notice and now forms part of the Commercial Code, the Malta Association of Credit Management said.

This legislation applies to payments made as remuneration for commercial transactions carried out between private and public undertakings, between undertakings and public authorities, and between main contractors and their suppliers and subcontractors, as from March 1.

Through the notice, local suppliers of goods and services (creditors) have the right to charge interest on late payment equivalent to eight per cent plus the ECB reference rate from the day following the end of term for payment agreed in the contract of sale.

When payment terms are not specified in the contract of sale, the supplier of goods and services is entitled to interest on late payment following 30 days from the date of receipt of goods or services, or from the date of invoice.