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If you sell products or provide services, often a payment term is determined. You can decide on any payment term for consumers. If you deliver to companies or governments you need to comply with the legal maximum payment terms. The payment term is usually detailed in the general conditions of the contract.
Payment terms for consumers
There is no legal payment term for consumers. As an entrepreneur you can set a reasonable payment term for consumers. This term may not be unreasonably long. You specify this term in the contract or general conditions.
Business-to-business (B2B) contracts
Payment terms for agreements between companies are laid down in a European Directive.
- Companies must pay the invoice within 60 days, unless you have made other arrangements and specified these in the contract.
- You may set a longer payment period of up to 60 days in the contract if it can be demonstrated that this is not harmful to either party.
If no payment term is specified, the payment term is 30 days. There are additional rules for large companies to ensure that small suppliers are not disadvantaged by excessively long payment terms set by the larger party.
- A payment term of over 60 days is not permitted between large companies and SMEs or self-employed professionals (zzp’ers).
- Agreements with a payment term of over 60 days will be annulled. The payment term will then automatically be changed to 30 days.
- If the purchaser pays the invoice after the 30-day payment term, it will owe statutory interest over the period exceeding the 30-day payment term.
Contracts between companies and governments
There are legal payment terms for contracts between companies and governments. Governments must pay the invoice within 30 days of receiving it. This period can only be extended to 60 days in extraordinary circumstances. The central government in the Netherlands uses the General Government Terms and Conditions.
When your customer fails to pay
Did you deliver goods or services and has your customer not paid your invoice in time or not at all? You are allowed to:
- charge a standard fee for collection costs of at least €40;
- charge a reasonable compensation for expenses incurred, such as legal fees of collection costs;
- charge statutory interest, calculated from the date the payment term expires.
Collection costs are the costs you incur as a creditor in order to collect a money claim, if your debtor fails to pay this claim of his own accord. The fee is a percentage of the bill. If your debtor is a company (B2B), you can deviate from this in an agreement. Statutory regulations will apply if there is no agreement.
Statutory interest for commercial transactions applies to deliveries to companies and to the government. In case of deliveries to consumers, the statutory interest rate for non-commercial transactions applies. The Dutch central bank (De Nederlandsche Bank, DNB) publishes several interest rates, among others the current statutory interest rates.
Demand for payment
Only if your customer is a consumer, you must send them a demand for payment. If your customer is a company, you are not obliged to do so.
Reporting late payment
If you have an SME and a large company fails to pay within the agreed or legal payment term (at most 60 days), you can notify the Netherlands Authority for Consumers and Markets (Autoriteit Consument en Markt, ACM, in Dutch). Please note that reporting will not help you get paid. ACM uses this temporary (1 year) reporting point to gain insight in payment behaviour of large companies and so determine if an independent supervisory body should be set up.