In recent years, it has become a trend for large companies, especially, to extend their payment terms to their suppliers. SMEs are particularly affected by this trend. This was one of the reasons why new legislation came into effect on March 16, 2013. This regulation is a boost for suppliers and hopefully makes buyers aware of the significant financial risks they face legally if they extend payment terms or pay late.
The regulations stipulate a standard payment term of 30 days for contracts concluded after March 16, 2013 (Article 119a of Book 6 of the Dutch Civil Code). A term of up to 60 days may be agreed upon. A term longer than 60 days may only be agreed upon if this is expressly not unreasonable or disadvantageous to the supplier, or if it can be demonstrated that it is not disadvantageous to either party. The paying party will have to provide a compelling argument to deviate from the 60-day maximum. Moreover, the paying party runs a risk if the supplier experiences financial difficulties due to the enforced long payment terms or late payments. In the worst-case scenario, in the event of bankruptcy, the trustee will use the legal options to claim interest and penalties.
The payment terms for agreements between businesses and between businesses and government bodies are now legally established. Previously, the law only stipulated that payment terms must not be unreasonable.
- If you do not contractually specify anything, the invoice must be paid within 30 days of receipt of the invoice.
- The agreement may stipulate a longer payment term of up to 60 days.
- A payment term longer than 60 days is only permitted if it can be demonstrated that this is not detrimental to either party.
Businesses and government agencies
must pay within 30 days of receipt (by government agencies) of the invoice. Deviating from this deadline is virtually impossible.
Missed or late payment?
Did your counterparty fail to pay the invoice or pay it late? Then you can request a standard fee for collection costs. You don’t need to send a reminder. If you haven’t agreed on the amount of the fee, the fee will be a percentage of the invoice amount, depending on the total amount. See www.rechtspraak.nl for more information on extrajudicial collection costs. The minimum amount is €40. You may also charge statutory interest.
In the European context,
Directive 2011/7/EU requires that invoices between businesses be paid within 60 days,
unless businesses reasonably agree on a longer period.
If nothing is contractually agreed upon, the 30-day term applies.
Governments must pay within 30 days.
The creditor is entitled to interest after the payment term has expired. The creditor may also receive compensation for collection costs.
Governments are obliged to pay invoices within 30 days. If a government is in arrears with payments, a creditor may charge interest.