Late payment by public buyers: your EU rights

After the award · This guide was generated with the help of an AI system. Its legal references were checked against the official EU texts listed under Sources on 11 October 2026. Next review due by 11 October 2027, or sooner if the law changes. EU rules only. Not legal advice.

Short answer. When a public authority buys goods or services from you, EU law caps its payment period at 30 calendar days, normally from receipt of your invoice (Article 4(3) of Directive 2011/7/EU). Member States may allow up to 60 days for public undertakings that sell on the market and for recognised public healthcare bodies. A contract may set a longer period only if it’s expressly agreed and objectively justified, and never beyond 60 days (Article 4(4) and (6)). If the buyer pays late, you are owed statutory interest automatically, without a reminder, at a rate of at least the reference rate plus eight percentage points, and at least €40 for each late invoice (Articles 4(1) and 6). A contract term that excludes interest is grossly unfair. The Court has held that Member States must make sure their public authorities actually keep to these periods, not just write them into law (C‑122/18). How you enforce these rights, and the exact national rate and method, are set nationally.

EU law · When the Directive applies

Directive 2011/7 applies to “all payments made as remuneration for commercial transactions” (Article 1(2)). A commercial transaction is one “between undertakings or between undertakings and public authorities which lead to the delivery of goods or the provision of services for remuneration” (Article 2(1)).

• Public authority means any contracting authority under the procurement Directives, “regardless of the subject or value of the contract” (Article 2(2)). So the rules apply below the EU procurement thresholds too.
• Works contracts are covered. The Court has held that a public works contract is a commercial transaction leading to the delivery of goods or the provision of services. That ruling was given under the predecessor Directive 2000/35, which used the same definition (Techbau, C‑299/19, ruling).
• Each delivery counts. Where a single contract provides for successive deliveries or services, each with its own payment period, each one is a commercial transaction (C‑419/21, ruling point 1).
• Older contracts. Member States could decide to exclude contracts concluded before 16 March 2013 (Article 12(4)).

Member States may keep or adopt rules that are more favourable to the creditor (Article 12(3)).

EU law · How long the buyer may take

The date of receipt of the invoice can’t be fixed by agreement between you and the buyer (Article 4(3)(b)).

No general 60 days. In BFF Finance Iberia (C‑585/20), Spanish law set a 60-day maximum for all transactions with public authorities: 30 days for acceptance followed by 30 days for payment. The Court held that Article 4(3) to (6) precludes national legislation that lays down such a period in general terms for all those transactions (ruling point 2).

The duty is real, not just on paper. The Commission brought Italy before the Court over the payment times of its public authorities. The Court held that the wording “Member States shall ensure that … the period for payment does not exceed” means the obligation “pertains to the effective compliance by their public authorities with the periods for payment” (C‑122/18, paragraph 40). That obligation sits alongside the right to interest. The two are “not alternative obligations, but complementary ones” (paragraph 41). Italy was found in breach (operative part, point 1).

EU law · What you’re owed if the buyer pays late

Interest, automatically. Once the period has expired, you’re entitled to statutory interest for late payment “without the necessity of a reminder”, provided you have fulfilled your contractual and legal obligations and haven’t received the amount due on time, “unless the debtor is not responsible for the delay” (Article 4(1)). Statutory interest is “simple interest … at a rate which is equal to the sum of the reference rate and at least eight percentage points” (Article 2(6)). For euro-area countries, the reference rate is the interest rate the European Central Bank applies to its most recent main refinancing operations, or the marginal rate where those operations are variable-rate tenders. The rate in force on 1 January applies for the first half of the year, and the rate on 1 July for the second (Articles 2(7) and 4(2)).

The amount due includes VAT. The amount due is the principal “including the applicable taxes, duties, levies or charges specified in the invoice” (Article 2(8)). The Court has held that the VAT on the invoice counts, whether or not you’ve already paid it to the tax authorities (C‑585/20, ruling point 3).

At least €40, per late invoice. Whenever interest becomes payable, you’re entitled to “as a minimum, a fixed sum of EUR 40”, without a reminder, as compensation for your own recovery costs (Article 6(1) and (2)). The case law:

• it’s due for each transaction certified by an invoice that wasn’t paid on time, even if several invoices are claimed together (C‑585/20, ruling point 1), and for each late payment under a contract with successive deliveries (C‑419/21, ruling point 2);
• national courts can’t dismiss a claim for it because the delay was short or the amount small (C‑279/23, ruling).

More than €40, if your costs were higher. You’re also entitled to “reasonable compensation” for recovery costs above the €40, such as a lawyer or a debt collection agency (Article 6(3)). That can include the cost of sending reminders (C‑287/17, ruling). The €40 is deducted from that reasonable compensation, so it isn’t paid twice (C‑131/18, order).

EU law · What the contract can’t take away

A term or practice on the payment date or period, the interest rate or recovery compensation is unenforceable, or gives rise to damages, if it is “grossly unfair to the creditor” (Article 7(1)). Two rules are fixed:

• a term or practice that excludes interest for late payment “shall be considered as grossly unfair” (Article 7(2));
• one that excludes the compensation for recovery costs “shall be presumed to be grossly unfair” (Article 7(3)).

Waiving it freely is a different matter. The Court has held that the Directive doesn’t preclude national rules letting a creditor waive interest and recovery compensation in exchange for immediate payment of the principal, “on condition that such a waiver is freely agreed to” (IOS Finance EFC, C‑555/14, ruling). That case concerned debts of a regional health service.

National law · What stays national

The way the reference rate is applied, how interest is calculated day by day, how you claim (a formal demand, an order for payment, a court), limitation periods, and any more favourable national rules (Article 12(3)) are all national. Check the law that governs the contract, and the payment clauses in the documents.

Our analysis · A made-up example

An invoice of €120,000, VAT included, reaches the buyer on 1 March. No acceptance procedure applies and no longer period is agreed, so payment is due within 30 days, that is by 31 March. The buyer pays on 30 May, 60 days late.

Assume a reference rate of 2.00%. This is an illustrative figure, not the current ECB rate. That gives a statutory rate of at least 10.00%. Calculated as simple interest over a 365-day year (the method is national, so check yours):

If the same buyer paid three monthly invoices late under one contract, the fixed sum would be €120: €40 for each late payment (C‑419/21; C‑585/20). The reference rate and the method here are assumptions for the example only. Use the rate published for the half-year concerned and the national method.

Why it matters when you price. Late payment costs you financing. Interest compensates for it, but only once you claim it. If the documents set a long acceptance procedure or a payment period beyond 30 days, check whether that is expressly agreed and objectively justified, and price the cash-flow cost into your bid (see price review and indexation clauses).

Practice · Before you bid

1. Read the payment clauses in the draft contract: the period, any acceptance or verification procedure, and how invoices must be submitted.
2. Check anything beyond 30 days. A longer period must be expressly agreed and objectively justified, and can’t exceed 60 days (Article 4(6)). An acceptance procedure longer than 30 days must be expressly agreed in the contract and the tender documents (Article 4(5)). If it looks unjustified, ask before the deadline (see clarification questions).
3. Look for terms that exclude interest or recovery costs. Excluding interest is grossly unfair (Article 7(2)). Raise it before you submit.

Practice · During the contract

1. Invoice correctly and keep proof of receipt. The period runs from receipt, and the date can’t be fixed by agreement (Article 4(3)).
2. Record the dates: delivery, acceptance, invoice receipt, due date, payment.
3. No reminder is needed for interest or the €40 (Articles 4(1) and 6(2)). A reminder still helps, and its cost can count towards reasonable compensation (C‑287/17).
4. Claim per invoice. The €40 is due for each late invoice or payment, even if you claim them together (C‑585/20; C‑419/21).
5. Think before waiving. Giving up interest for faster payment is allowed only if it’s freely agreed (C‑555/14). Weigh the offer against what you’re owed.
6. Keep it separate from changes to the contract. Late payment doesn’t change the price. A request to change the price is a modification question (see changing a public contract after signature).

What this page doesn’t cover

National interest rates, calculation methods, claim procedures and limitation periods. Transactions between undertakings (Article 3), except where the case law cited applies to both. Payment of subcontractors, including direct payment by the buyer (see bidding with partners). Purchases by the EU institutions under the EU’s Financial Regulation. State aid and the EU funds rules.