Legal alert

New law bans large purchasers from imposing long payment deadlines

May 29, 2017
Legal alert

Under new Dutch legislation effective from 1 July 2017, large purchasers may no longer agree payment deadlines beyond 60 days with small or medium-sized counterparts. A longer payment period is void and automatically replaced by a 30-day period. Currently, a payment deadline beyond 60 days is allowed, but only where this is not “grossly unfair” and the deadline has been explicitly agreed. This new law is a further restriction of the Late Payment Directive (2011/7/EU) implemented in the Netherlands on 16 March 2013.

What changes?
As of 1 July 2017, in new agreements providing for a large entity purchasing goods or services from a small or medium-sized enterprise:

  1. periods for payment may not exceed 60 days
  2. a longer payment deadline is void and a 30-day deadline automatically applies, with the supplier entitled to claim interest at the statutory rate – currently at 8% – or another agreed rate after that 30-day deadline.


After the deadline expires, the large entity is automatically in default. The right to claim interest lapses five years from the payment deadline.


When is a party a large entity or an SME?
An entity is considered “large” if it has not met at least two of the three criteria below for two consecutive balance sheet dates and without interruption on the two successive balance sheet dates:

  1. Value of the assets < EUR 20,000,000
  2. Net turnover < EUR 40,000,000
  3. Average number of employees < 250.


An entity is small or medium-sized if it has met at least two of these criteria for two consecutive balance sheet dates and without interruption on the two successive balance sheet dates. Self-employed individuals are considered to be an SME under this law. 


When does this start affecting you?
New agreements must be in line with the new law as of 1 July 2017. For existing agreements, a one-year transition period applies, which means that these contracts have to be aligned with the new law from 1 July 2018.


For the new legislation, click here. If you have any questions, please contact Daan Beenders or Jorine ten Wolde.

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