What is penalty interest on late commercial payments in the Netherlands?

Dutch term: Vertragingsrente | Legal basis: Articles 6:119-6:119a BW + Directive 2011/7/EU

Under Dutch law, late commercial payments automatically incur statutory commercial interest (handelsrente) under article 6:119a of the Dutch Civil Code, implementing the EU Late Payment Directive (2011/7/EU). The rate is set at the ECB refinancing rate plus 8 percentage points, currently over 10% annually. This rate applies by operation of law from the moment of default and cannot be reduced to the creditor's detriment.

In addition, parties can agree on a contractual penalty interest rate that exceeds the statutory rate. Such clauses are enforceable between commercial parties, subject to the court's power to moderate manifestly excessive penalties under article 6:94 BW. The statutory rate applies if no contractual rate is agreed or if the contractual rate is lower than the statutory commercial rate.

Why it matters for international businesses

For international creditors, the high Dutch commercial interest rate is a significant financial incentive for debtors to pay on time. Combined with the WIK recovery costs and the possibility of pre-judgment attachment, Dutch law provides one of the most creditor-friendly commercial payment frameworks in Europe.