Late payment interest for Belgian contractors: the law and how to apply it

Belgian law protects contractors and small businesses from slow-paying clients. The Wet van 2 augustus 2002 betreffende de bestrijding van de betalingsachterstand bij handelstransacties gives you the right to charge interest and an indemnity on every overdue B2B invoice. Most contractors never use this right because they do not know about it or do not know how to apply it.

What the law says

Under Belgian law, a B2B invoice becomes overdue 30 days after the invoice date if no payment terms have been agreed, or on the agreed due date if terms are specified. From that date, you are automatically entitled to charge interest at the European Central Bank reference rate plus 8 percentage points, published twice yearly by the Belgian government. You are also entitled to a flat-rate recovery indemnity of at least 40 euros per invoice.

The flat-rate indemnity

In addition to interest, Belgian law allows you to charge a fixed indemnity to cover your recovery costs. The minimum is 40 euros for invoices up to 1,000 euros. For invoices between 1,000 and 10,000 euros, the indemnity is 4% of the invoice amount with a minimum of 40 euros. For invoices above 10,000 euros, the indemnity is 1% with a maximum of 1,000 euros. These amounts are in addition to interest.

This applies automatically by law

You do not need to state late payment interest in your contract for it to apply. Belgian law grants this right automatically for B2B transactions. However, stating it explicitly in your quotation or general terms and conditions makes it much easier to enforce in practice, because clients cannot claim they were unaware.

How to apply it in practice

When an invoice becomes overdue, send a first reminder. If payment is still not received after a reasonable additional period, issue a credit invoice to the original amount and a new invoice that includes the original amount plus calculated interest and the flat-rate indemnity. Document every communication. QuotCraft calculates the correct interest amount and indemnity automatically and can generate the additional invoice with one click.

Does this apply to private clients?

The Wet van 2 augustus 2002 applies to commercial transactions between businesses. For private clients, different rules apply under general Belgian civil law. You can still charge interest on late payment from private clients, but the automatic entitlement under the B2B law does not apply. You must specify late payment terms in your consumer contract.