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Payment term for trade with SMEs in the Netherlands halved to 30 days

  • Netherlands
  • Commercial agreements

29-08-2022

As of 1 July 2022 stricter payment terms apply following which large companies (as debtor) are prohibited to agree upon payment terms of longer than 30 days when entering into commercial contracts with small and medium sized enterprises (SMEs) (as creditor). The rule applies to companies that are established in the Netherlands or transactions that are executed in the Netherlands.

 Large companies are - broadly speaking - defined as legal entities that meet at least two of the following three criteria: (i) a balance sheet total of more than EUR 20 million, (ii) a net turnover exceeding EUR 40 million, and (iii) more than 250 employees. All companies that do not meet two out of the three criteria are considered SMEs.

 For agreements which already existed before 1 July 2022, a transition period of one year applies. This means that agreements signed prior 1 July 2022 with a payment term longer than 30 days must be changed to a 30 day payment term within a year (so ultimately by 1 July 2023). If this change is not made within one year, the payment term of the contract shall be null and void, and the contractual or statutory interest for late payment shall accrue automatically.

 Large companies should update their contract templates and review existing agreements with SMEs to ensure that the agreed payment term is compliant.

 With the new payment term for trade with SMEs, the applicable payment terms in the Netherlands can be summarized as follows: 

Term without contract 30 days

Maximum contractual term large companies In principle 60 days, only longer if various conditions are met

Maximum contractual term SMEs 30 days