The Regulatory Decree on Fair Payment Terms for Business Invoices

As of 2022, businesses must pay their invoices within a maximum of 45 calendar days.*


By: Dr. Luz Eneida Saldaña, attorney, Universidad del Rosario, specialist in Administrative Law and Financial Law.

Under Law 2024 of July 23, 2020, Decree 1733 of December 22, 2020 saw the Ministry of Trade, Industry and Tourism implement that law regarding the obligation to pay within fair terms, adding a new chapter to Decree 1074 of 2015, the "Single Regulatory Decree for the Commerce, Industry, and Tourism Sector," which took effect on January 1, 2021.

Recall that, under Law 2024's own stated purpose, the measure's intended benefits included: proper capital flow to micro, small, and medium-sized businesses; preserving jobs; maintaining competitiveness; and preventing the financing costs many businesses were forced into by slow invoice payment from being passed on to the end buyer — effectively eliminating the possibility of 12- or 24-month invoice terms continuing to exist in Colombia.

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The Decree applies to all payments owed as consideration in commercial acts carried out by merchants, or by people who — without being merchants themselves — occasionally carry out commercial transactions, as long as the act qualifies as commercial for at least one of the parties.

The countdown for the fair-payment-term clock begins under the following scenarios:

• From receipt of the invoice, when the seller is required to invoice and the invoice is received electronically.
• From delivery of goods or actual performance of the service, in either of these cases: 1) when the buyer doesn't receive the invoice electronically, or 2) when the seller isn't required to issue a sales invoice.

These rules need to be read together with those on electronic invoicing and digital payments. Accordingly, for a sale with an electronically received invoice that isn't otherwise excluded, obligations must be paid within the following non-extendable terms, as originally set by the law this decree implements:

• 60 calendar days from receipt of the invoice, for invoices received between January 1, 2021 and December 31, 2021
• 45 calendar days from receipt of the invoice, for invoices received starting January 1, 2022
• 60 calendar days from receipt of the invoice, for commercial transactions carried out within the General Social Security Health System, starting January 1, 2023

While Law 2024 of 2020 set out three specific exceptions — (i) payments in commercial transactions involving consumers that are subject to consumer-protection rules; (ii) interest governed by check, promissory note, and bill-of-exchange legislation, damages payments (including those made by insurers), loan agreements, and other typical or atypical contracts where deferred terms are inherent to the nature of the contract; and (iii) debts subject to insolvency or corporate-restructuring proceedings, governed by their own special legislation — article 1 of the regulatory decree also excluded the following transactions from the law's scope:

• Payments owed as consideration for acts the Commercial Code doesn't classify as commercial.
• Those arising from insurance contracts and securities-market transactions, and those involving consumers subject to consumer-protection rules and their related legal transactions.
• Those arising from commercial transactions between companies classified as large enterprises.
• Obligations contained in negotiable instruments, except sales invoices.
• Payments corresponding to damages.
• Payments arising from performance of insurance contracts.
• Obligations arising from loan agreements and other typical or atypical contracts where deferred payment terms are inherent to the nature of the contract.
• Obligations subject to insolvency, corporate-restructuring, or liquidation proceedings, and those subject to the insolvency regime for non-merchant individuals or to the takeover-and-liquidation regime under the Colombian Financial System Statute (EOSF).
• Payment of subscribed capital in corporations (Sociedades Anónimas), simplified stock companies (SAS), and limited liability companies.
• International commercial trade transactions.

Additionally, obligations arising from "typical or atypical contracts where deferred terms are inherent to the nature of the contract" are excluded, as long as the parties agreed to that arrangement.

The decree also established that any change in a company's size classification that affects its fair-payment-term obligations must be certified under Decree 1074 of 2015 and promptly communicated to buyers.

Finally, it provided that the Ministry of Trade will grant "recognition" to companies that pay within terms shorter than those set by Law 2024 of 2020, through an annual open call for companies wishing to participate voluntarily, with the terms and recognition published on the Ministry's website by June 30 of each year.

At Consejurídico, #WeWantToBeThere

Source: Law 2024 of July 23, 2020, and Regulatory Decree 1733 of December 22, 2020.

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