Prompt Payment of Accounts Act, 1997
Acts of the Oireachtas
Source: Acts of the Oireachtas

num: 1
paragraphs: —(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—
num: 2
paragraphs: —This Act shall apply only to and in relation to goods and services supplied on or after the commencement of this Act.
num: 3
paragraphs: —(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.
num: 4
paragraphs: —(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.
num: 5
paragraphs: —(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.
num: 6
paragraphs: —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.
num: 7
paragraphs: —(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.
num: 8
paragraphs: —(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).
num: 9
paragraphs: —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.
num: 10
paragraphs: —(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.
num: 11
paragraphs: —(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.
num: 12
paragraphs: —(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.
num: 13
paragraphs: —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.
num: 14
paragraphs: —(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.
num: 15
paragraphs: —(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.
num: 16
paragraphs: —(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.