Glossary · Legal and regulation
Late Payment Directive
Also called Directive 2011/7/EU
The EU Late Payment Directive (2011/7/EU) gives B2B suppliers statutory interest, a €40 fixed sum and limits on payment terms when invoices are paid late.
Directive 2011/7/EU on combating late payment in commercial transactions sets minimum rules that every EU country has written into national law. In B2B and business-to-government deals, when a customer pays late, the supplier is entitled to statutory interest at the reference rate plus at least 8 percentage points, without needing a reminder.
It also gives a fixed €40 for recovery costs per late invoice, plus reasonable further costs; caps B2B payment terms at 60 days unless expressly agreed and not grossly unfair; and limits public authorities to 30 days, or 60 in exceptional cases.
Where no payment date was agreed, interest starts 30 days after the customer receives the invoice. National laws can be stricter than the Directive, so rates, margins and details differ from country to country.
Example
A German supplier’s business client pays a €20,000 invoice 45 days late. Under German law, which implements the Directive, the supplier can claim interest at the base rate plus 9 points and a €40 flat fee, without having sent a reminder.