Statutory commercial interest: when can you apply it?

Statutory commercial interest or ordinary legal interest can be charged for late payment. But when can you do that? What is the difference between ‘ordinary’ statutory interest and statutory commercial interest? And how do you set the rate? In this blog debt collection lawyer Conner Canters you all about statutory interest and about legal commercial interest.

Statutory interest is the interest a creditor is allowed to charge under the law when a consumer or professional party is in arrears. It is, so to speak, compensation for the interest the creditor misses out on the outstanding amount. On Jan. 1, 2024, the level of statutory interest is set at 7% for non-trade agreements and 12.5% for trade agreements. On January 1, 2025, the rates adjusted (which happens every six months) to 6% and 11.15%, respectively.

When can legal interest be charged?

Statutory interest can be charged by a creditor when a sum of money, such as pursuant to an invoice, is not paid on time. In effect, the debtor is already in absence once the deadline on the invoice has expired. But under circumstances, a formal notice required before legal interest can be charged. This is usually done by means of an official demand letter, in which the debtor is exhorted to still pay within a reasonable period of time. Only after that period has passed can statutory interest be claimed.

What is the difference between statutory interest and statutory commercial interest?

Statutory interest and statutory commercial interest are not the same thing.

• According to article 6:119 BW is the ‘ordinary’ legal interest applicable to all agreements with individuals or consumers. These are not trade agreements, but, for example, agreements between an individual and a company or government agency.
• According to article 6:119a BW is the legal commercial interest applicable to an agreement between professional parties. This does involve a trade agreement. For example, between companies themselves or between companies and government organizations, such as the municipality, province or the UWV.

How do you determine the amount of statutory interest?

Central government reviews the amount of statutory (commercial) interest every six months. The legal interest rate is always binding. But when entering into a commercial agreement, the parties involved can also agree on a different rate. If this is stipulated in the contract or general terms and conditions, the contractual percentage applies in the event of a dispute.

Also read: Statutory interest rate increased from 2 to 4% for the first time in eight years.

When is there a trade agreement?

A commercial contract exists when a good or service is provided between two professional parties in return for payment. In legal terms, we also say that this is the case when a natural person acts in the exercise of a profession or business, or when a legal entity (nv, bv, foundation, association, et cetera) acts. Literally, the Civil Code states that a commercial contract means the following:

“The agreement for benefit which obligates one or more of the parties to give or do something and which is established between one or more natural persons acting in the exercise of a profession or business or legal persons” - Article 6:119a paragraph 1 BW.”

When can legal commercial interest be charged?

Statutory commercial interest can be charged by a creditor when 1) according to the above qualifications there is a commercial contract, and 2) the pecuniary performance corresponding to delivered goods or services has not been paid before the expiration of the payment period. The creditor can claim statutory commercial interest only on the primary, direct payment obligation from the commercial contract. Thus, it can never be an indirect payment obligation arising from the commercial agreement.

Collection lawyer in dispute over statutory commercial interest rate

Do you have questions as a result of this blog, or are you in a dispute and could use legal help? As a law firm, we assist both professional parties and consumers. Please feel free to contact with us at 010 600 2300. Then we will be happy to help you further.