Legal term for payments in the Netherlands

Yes, the legislation in the Netherlands is based on EU Directive 2011/7/EU on combating late payments in commercial transactions. In 2013 the Dutch Act Combating late payments. in commercial transactions came into force and changed article 6:96, 6:119a, 6:119b of the Civil Code. The Dutch legislation imposes strict implementation of the regulations from the Directive. The Directive applies to all types of payments made to compensate transactions between public administrations and companies, or transactions between companies.

In 2017, the Civil Code Amendment on combating unreasonable late payments came into force and changed art. 6:119a of the Civil Code. Large companies cannot agree to a payment term longer than 60 days in new contracts with small and medium-sized enterprises. If large companies still use a payment term longer than 60 days in those contracts, the payment term under such an agreement is not valid and will automatically be changed into a maximum term of 30 days. If payment does not take place within this term, legal interest and collection costs (at a minimum of EUR 40) are due.

2. Is there a standard payment term set out in law? If so, what is it?

The standard payment term is set out in art. 6:119a(4) of the Civil Code. The standard payment term in domestic commercial transactions is 30 days. 1 Public authorities use Governmental Terms and Conditions (in Dutch: ‘Algemene Rijksvoorwaarden’) for commercial contracts. These conditions contain a maximum payment term of 30 days. Deviation to a longer term is only possible in very specific circumstances.

3. In what circumstances may parties contractually agree to extend payment beyond the standard payment term?

The period does not exceed 30 days from the date of receipt of the performance, unless the parties have expressly agreed upon a longer period of payment and this period is not evidently unfair to the creditor, in view of:

  • The question of whether the debtor has any objective reason to deviate from the 30-day period;
  • The nature of the performance; and
  • Any significant deviation from good commercial practice.

The parties may agree upon a deadline for payment of up to 60 days, unless they explicitly include a longer period of payment in the contract and this period is not evidently unfair for the creditor, in view of:

  • The question of whether the debtor has any objective reason to deviate from the 30-day period;
  • The nature of the performance; and
  • Any significant deviation from good commercial practice.

4. May an obligation beyond the standard payment term be evidenced in a PO?

Yes, the parties may agree upon a deadline for payment of up to 60 days, unless they explicitly include a longer period of payment in the contract.

5. Are there any penalties for breach of payment term legislation other that a civil claim of the seller?

Yes, in the event of a commercial transaction the collection of costs consists of a fee of at least EUR 40. This amount is due, without any reminder being required, on the day following the one on which the statutory or agreed-upon deadline for payment has expired. It is not possible to derogate from this rule to the detriment of the creditor.

Furthermore, the compensation for damages, chargeable because of a delay in payment of a sum of money, consists in the case of a commercial agreement of the statutory interest on the unpaid part of that sum from the day following the date considered the expiry date for payment under the agreement up until and including the day on which the debtor has paid the amount chargeable to him (art. 6:119a(1) Civil Code). This is known as statutory commercial interest (‘handelsrente’) where the rate is now 8%.

The ‘normal’ statutory interest, laid down in art. 6:119(1) Civil Code, is now 2%. Any creditor can claim a 2% statutory interest on the sum over the time that the debtor is in default of complying with his obligation. So the interest rate of the statutory commercial interest is considerably higher than that of the ‘normal’ statutory interest laid down in art. 6:119(1) of the Civil Code.

In case the stipulated contractual interest is higher than the interest chargeable to the debtor under the previous paragraphs, the creditor is entitled to this higher interest rate over the time that the debtor is in default of complying with his obligation unless the rate is neither reasonable nor fair.

At the end of each year, the amount on which the statutory interest is to be calculated shall be increased with the unpaid statutory interest chargeable over that year. This is called ‘interest on interest’ of art. 6:119(2) and art. 6:119a(3) Civil Code.

No statutory interest is chargeable when the creditor himself is in default or the delay cannot be attributed to the debtor.

6. Is there any special legislation regarding payment obligations for the COVID-19 situation?

Not yet, but the government is working on measures to help entrepreneurs and suppliers. (See: additional comments).  

7. Any additional comments

The government in the Netherlands is working on a measure to help entrepreneurs in respect of their supplier credit. This measure still has to be worked out in detail and the European Commission has to be asked permission. Similar measures are being prepared in other European Countries. (see: https://www.rijksoverheid.nl/actueel/nieuws/2020/04/07/kabinet-helpt-leveranciers-en-ondernemers-met-hun-leverancierskrediet) And see the following link for specific measures taken in The Netherlands due to the coronavirus: https://www.rijksoverheid.nl/onderwerpen/coronavirus-financiele-regelingen/overzicht-financiele-regelingen

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Aukje Haan
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