# Statutory interest

Source: https://contracko.com/glossary/statutory-interest

# Statutory interest

The interest rate set by law that a debtor owes on a late payment when no rate is agreed.

## Definition

Statutory interest is the default rate payable on overdue monetary obligations when the contract is silent. Dutch law distinguishes ordinary statutory interest (article 6:119 BW) for non-commercial debts from the higher statutory commercial interest (article 6:119a BW) for business-to-business transactions. Both rates are fixed periodically by government decree.

## Example

> A supplier whose invoice is paid two months late can claim statutory commercial interest from the day after the payment term expired.

## Why this is a business risk

Statutory interest accrues silently and is often overlooked until a dispute is already escalating. For sellers, failing to track when default begins means leaving money on the table. For buyers, unresolved overdue invoices across a portfolio can quietly accumulate significant interest exposure that only surfaces at the point of legal action.

## How to manage it

- Identify whether the transaction is B2B or B2C, since this determines which interest rate applies.
- Note the exact date of default in writing, as interest starts from that date and the calculation depends on it.
- For agreed payment terms with a fixed date, default is automatic; for open-ended terms, send a notice of default to start the interest clock.
- Check the current statutory rate periodically as it is updated by government decree; use the rate applicable at the time of default for each period.
- Include a contractual interest clause at or above the statutory rate to remove ambiguity and discourage late payment.

### How Contracko helps

Contracko tracks payment deadlines and sends reminders before they fall due, reducing the frequency of late payments that give rise to statutory interest claims. By centralising contract data, teams can quickly identify which agreements are overdue and what default date applies, supporting accurate interest calculations when needed.

## Legal references

- [BW 6:119 Dutch Civil Code: statutory interest Dutch law](https://wetten.overheid.nl/BWBR0005289)
- [BW 6:119a Dutch Civil Code: commercial interest Dutch law](https://wetten.overheid.nl/BWBR0005289)

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

## Relevant for

[Financial Services](https://contracko.com/industries/financial-services)[Logistics & Distribution](https://contracko.com/industries/logistics)[Manufacturing](https://contracko.com/industries/manufacturing)

## Related clauses

- [Payment Terms Clause](https://contracko.com/clause-library/payment-terms)

## Related terms

- [Payment default](https://contracko.com/glossary/payment-default)
- [Notice of default](https://contracko.com/glossary/notice-of-default)
- [Extrajudicial collection costs](https://contracko.com/glossary/extrajudicial-collection-costs)
- [Payment terms](https://contracko.com/glossary/payment-terms)

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## Frequently asked questions

Common questions about this term.

- **Q:** Is statutory commercial interest higher than ordinary statutory interest?
  **A:** Yes. The commercial rate under 6:119a BW is set higher to discourage late B2B payment.

- **Q:** From which date does statutory interest begin to run?
  **A:** Interest runs from the moment the debtor is in default. For a fixed payment date this is automatic; otherwise it starts after a valid notice of default has been sent and the cure period has expired.

- **Q:** Can parties agree a higher interest rate than the statutory rate?
  **A:** Yes, in B2B contracts parties are free to agree a higher contractual rate. For consumer contracts there are limits; any agreed rate that exceeds the statutory rate in a manifestly unfair way may be set aside.

- **Q:** Does statutory interest compound?
  **A:** Under Dutch law statutory interest is calculated on the outstanding principal. Compounding (rente op rente) requires an explicit contractual provision; it does not apply automatically.

- **Q:** Is a reminder letter required before statutory interest starts?
  **A:** Not always. If the contract names a specific payment date, default and interest begin automatically without a reminder. A notice of default (ingebrekestelling) is only needed when no fixed date was agreed.

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