Early Payment Discount (Skonto) in Procurement Law
An early payment discount (Skonto) is a percentage price reduction for prompt payment that can be stated in tenders and must be handled separately under procurement law.
Definition: Skonto is a percentage price reduction on the invoice amount that the bidder offers in its tender and that the contracting authority may apply if it settles the invoice within an agreed shorter payment period. Under procurement law, the early payment discount is not automatically a price component, and its consideration in the evaluation must be assessed case by case.
Last updated: January 2026 · Legal basis: BVergG 2018, ABGB, VOB/A, BGB
What is an early payment discount?
The early payment discount is a percentage deduction from the invoice amount that the bidder grants the contracting authority where the invoice is paid within a specified discount period. Typically the discount is 2–3% of the net invoice amount where payment is made within 8–14 days. The bidder states the discount and discount period separately in its tender – in Austria often in a dedicated field of the tender form, in Germany in accordance with VOB/A or the procurement documents.
The early payment discount must be distinguished from rebate and price reduction: a rebate is an unconditional price reduction that directly reduces the tender price. A price reduction (Nachlass) is also unconditional but often agreed after contract conclusion or during negotiated procedures. The early payment discount, in contrast, is always conditional on timely payment.
Significance in procurement procedures
The procurement-law treatment of the early payment discount is not uniformly regulated and depends on how the procurement documents define the basis for evaluation. Where the evaluation is based exclusively on the tender price without taking the discount into account – which is the standard case – the offered discount does not feed into the ranking of tenders. In that case, the discount is simply a payment incentive that affects the contracting authority's payment behaviour after the award.
Where the contracting authority expressly provides in its procurement documents that the early payment discount is to be taken into account in the evaluation, this must be regulated transparently and without discrimination. An automatic discount deduction in price evaluation without a corresponding rule in the procurement documents is impermissible, as it breaches the principles of transparency and equal treatment.
Related terms
Last updated: January 2026 All information without guarantee. For legally binding advice, please consult a law firm specialising in procurement law.
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