What is statutory interest?

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Aida Kopijn July 9, 2024
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There is nothing more annoying than a customer who does not pay an invoice (on time). One tool you can use to encourage your customer to make a payment is to charge interest on the outstanding amount. The statutory interest (Article 6:11a BW) is the interest you can legally demand when your customer is in arrears. In this article, we explain when and what interest you can charge.

What is statutory interest

There are three forms of interest, and the law determines when you can charge which interest to your customers. The statutory interest rates are set every 6 months, so you have no influence on this percentage.

1. The statutory interest

The statutory interest is also known as the ‘ordinary’ interest. This interest applies to all non-commercial transactions. This means you can charge this interest to customers who are consumers. Currently, the statutory interest is 2% per year. This means you can charge an additional 2% of the unpaid principal annually after the due date. After a year, you can increase the amount on which the statutory interest is calculated with the interest owed for that year. This is called compound interest or ‘interest on interest’.

An example calculation for statutory interest to consumers

The customer’s outstanding amount is €500,-
The due date is July 23, 2021
On July 22, 2022, the interest sum is €500

  • 2% = €10,-

From July 23, 2022, you can charge interest on €510,-

You won’t get very rich from it, but you hope to motivate consumers to pay the outstanding amount before the due date. The interest accumulates.

2. The statutory commercial interest

If you sell to companies and/or government agencies, the statutory commercial interest applies. You can charge this interest for commercial agreements. Currently, the statutory interest is 8% per year. This means you can charge an additional 8% of the unpaid principal annually after the due date. Also, with the statutory commercial interest, you can increase the amount after a year with the interest owed for that year: the ‘interest on interest’. The statutory commercial interest does not apply to consumers or compensations. In these cases, the statutory or ‘ordinary’ interest applies.

An example calculation for statutory commercial interest to companies or government agencies

The customer’s outstanding amount is €1,500,-
The due date is July 23, 2021
On July 22, 2022, the interest sum is €1,500

  • 8% = €120,-

On July 23, 2022, you can charge interest on €1,620,-

In Article 6:119a paragraph 2 BW, it also applies:
“If no due date for payment has been agreed, the statutory interest is due by operation of law:
a) from 30 days after the start of the day following the day on which the debtor received the invoice, or

b) if the date of receipt of the invoice is not certain, or if the debtor receives the invoice before receiving the performance, from 30 days after the start of the day following the day on which the performance is received, or

c) if the debtor has stipulated a period within which he can accept the received performance or assess whether it complies with the agreement, and if he receives the invoice before accepting or assessing the performance, from 30 days after the start of the day following the day on which the debtor accepted or assessed the performance, or, if he does not express approval or acceptance, from 30 days after the start of the day following the day on which the period expires.”

On the website of De Nederlandse Bank (DNB), you can download the table of current statutory interest rates.

3. The contractual interest

When you have agreed with a customer – apart from the ordinary or commercial interest – on a certain interest rate (in writing), we call this the contractual interest. Some companies include this interest in their general terms and conditions. You do have influence on this percentage, but an excessively high interest rate (especially for consumers) can be deemed an unfair term by the court and be annulled. Then the statutory interest of 2% applies.

When is the interest due?

You can only charge interest to your customers when there is a default. If your customer is in arrears, you can request interest on it.

Do you want to ensure that your customers pay faster? A clear and efficient accounts receivable management makes the work a lot easier and more enjoyable. It also makes it easier for customers to pay. Curious about what we can do for your organization? Schedule a consultation below.

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By Aida Kopijn

Aida is an accounts receivable management expert at Payt, known for her precision and organisational passion. She ensures every process is perfectly managed and optimised.

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