B2B Payments

CJEU Ruling Hits Cross-Border B2B Invoices

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A ruling by the Court of Justice of the European Union (CJEU) will impact businesses across the region that need to send invoices across borders.

Reports on Thursday (June 23) said the CJEU ruled over a case involving legislation in Belgium that requires invoices be generated in the Dutch language. The case has broader implications for cross-border invoicing and trade, reports noted, and for businesses that include requirements in their B2B contracts that require invoices to be written in a certain language.

The dispute stems from a disagreement between pharmaceutical companies, reports said, as one company based in the Dutch-speaking Flemish region of Belgium sued an Italian firm for allegations of nonpayment of invoices.

The invoices were sent in Italian, so the Italian company’s defense argued that those invoices were null and void because they were not written in Dutch, as mandated by Flemish legislation.

But in a ruling by the CJEU, the requirements for invoices to be drafted in a particular language were decided to threaten the free movement of goods within the EU.

“In depriving the traders concerned of the possibility of choosing freely a language which they are both able to understand for the drawing-up of their invoices and in imposing on them to that end a language which does not necessarily correspond to the one they agreed to use in their contractual relations, legislation such as that at issue in the main proceedings is likely to increase the risk of disputes and nonpayments of invoices, since the recipients of those invoices could be encouraged to rely on their actual or alleged inability to understand the invoices’ content in order to refuse to pay them,” the court declared.

In other words, language requirements on an invoice are likely to lead to more nonpayment disputes because businesses can argue against the validity of those invoices based solely on the language in which they are written.

The original dispute surfaced between Belgium-based New Valmar and Italy-based Global Pharmacies Partner Health.

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