Legal Guide · Directive 2011/7/EU

EU Late Payment Directive: ECB + 8% Interest and the €40 Fee, Explained

Santanu Sarma

Economics Researcher · Reviewed by European Commercial Law Advisory Board

Updated: October 18, 2026

The Short Version

The directive's full name is Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions. It is the EU late payment directive that businesses mean when they search for "ECB + 8".

1. Core Statutory Rights Under Directive 2011/7/EU

Why the Directive exists

Late payment is a cash flow problem for suppliers, and for small businesses it can be a survival problem. A supplier that waits 90 days for a €10,000 invoice is, in effect, giving its customer an interest-free loan. Directive 2011/7/EU was adopted to reduce payment delays across the Single Market, to discourage the practice of using suppliers as free financing, and to give creditors a predictable remedy that does not depend on negotiating it into every contract.

Directive 2011/7/EU: Member States shall ensure that, in commercial transactions between undertakings, the creditor is entitled to interest for late payment without the necessity of a reminder if the creditor has fulfilled its contractual and legal obligations and has not received the amount due on time, unless the debtor is not responsible for the delay. (Article 3(1), paraphrased)

Who it covers

The Directive applies to commercial transactions: dealings between businesses, and between businesses and public authorities, that lead to the delivery of goods or the provision of services for payment.

• B2B transactions: a freelancer invoicing a company, a manufacturer invoicing a retailer.
• Public authority to business (PA2B): a government department or municipality that owes a supplier.
• Consumers are excluded. A sale to a private individual is outside the Directive.

Payment terms: 30 days and 60 days

The Directive sets default and maximum periods:

• No date in the contract (B2B): Payment is due 30 calendar days after the debtor receives the invoice.
• Contract sets a term (B2B): A term over 60 calendar days is allowed only if expressly agreed and not grossly unfair to the creditor.
• Public authorities: 30 days, extendable to 60 only where objectively justified.

2. Statutory Interest Rates and the ECB Reference Rate

The formula for the rate

Directive 2011/7/EU: The statutory interest rate is the sum of the reference rate and at least eight percentage points (the "margin"), unless otherwise specified in the contract.

The reference rate is the interest rate applied by the European Central Bank to its most recent main refinancing operation before the first calendar day of the half-year.

Statutory annual rate = ECB main refinancing rate (on 1 Jan or 1 Jul) + 8 percentage points

Recent half-years

Interest begins on the day after the payment date stated in the contract. The creditor does not need to send a reminder, a formal notice, or a demand.

3. The Flat €40 Minimum Recovery Compensation (Article 6)

Interest compensates you for the money's time value. The fixed sum compensates you for the cost of chasing.

Directive 2011/7/EU, Article 6: Where interest for late payment becomes payable, the creditor is entitled to obtain from the debtor, as a minimum, a fixed sum of EUR 40, as compensation for recovery costs. The creditor is also entitled to reasonable compensation for any recovery costs exceeding that fixed sum...

• It is per overdue invoice. If five invoices are late, the minimum is 5 × €40 = €200.
• It is automatic. Like interest, it arises without a reminder.
• It is a minimum. If you incur real costs beyond €40 (lawyers, debt collection agencies), you can claim reasonable additional compensation.

4. Country Implementation Table (National Variations)

The Directive sets a legal floor. Under Article 12, member states may maintain rules that are more favourable to the creditor.

5. Worked Example & Step-by-Step Recovery Workflow

The calculation

A €6,000 invoice is 30 days overdue. As of October 2026, the invoice falls under the second-half 2026 rate of 10.40%.

Daily interest = (€6,000 × 0.104) ÷ 365 = €1.7096 per day
Interest       = €1.7096 × 30 = €51.29
Fixed sum      = €40.00
Total claim    = €6,000.00 + €51.29 + €40.00 = €6,091.29

The recovery workflow

1. Confirm the due date and the governing law. Check the invoice terms and the contract.
2. Calculate interest. Use the formula above, or our calculator.
3. Add the fixed sum. Add €40 for each overdue invoice.
4. Send a statement of account. Draft an interest invoice referencing the original invoice number, showing the balance, rate, days overdue, interest, and the fixed sum.
5. Escalate. Use a letter before action, a collection agency, or the European Small Claims Procedure (for claims up to €5,000).

6. Deep, Exhaustive FAQ

Do I need to send a reminder letter before charging interest?

No. Under Article 3, interest on a B2B debt accrues automatically from the day after the due date, without a reminder. The same is true of the €40 fixed sum. However, a polite reminder often gets the invoice paid without a formal dispute.

Can a customer force me to accept 90-day payment terms?

Not automatically. A B2B contract term longer than 60 days is allowed only if it is expressly agreed and not grossly unfair to you. A buyer who simply states "we pay in 90 days" in its standard terms is on weak ground.

Is VAT charged on statutory late payment interest or the €40 fee?

Generally no. Statutory interest and the fixed compensation sum are treated as compensation for the delay, not as payment for a supply of goods or services, so they are normally outside the scope of VAT.

What happens if the buyer pays the principal but ignores the interest invoice?

The interest and the €40 sum remain a separate debt. Reserve your rights in writing by confirming that the principal payment is accepted "without prejudice to interest and compensation." You can still escalate the claim for the outstanding fees.

7. About the Author & Primary Legal Sources

Santanu Sarma is an economics researcher at Bhattadev University, with a focus on public finance and econometrics. He is also the creator of GetInvoicePDF.com. His approach is to state the formula, show each rate, and let readers verify every figure.

Primary legal sources

• Directive 2011/7/EU of the European Parliament and of the Council on combating late payment in commercial transactions (EUR-Lex)
• Regulation (EC) No 1896/2006 (European order for payment procedure)
• Regulation (EC) No 861/2007 (European Small Claims Procedure)
• European Central Bank, main refinancing operations rate

This article is general information, not legal advice. National laws, reference rates, and procedures change, and the right rate depends on the law that governs your contract and the date your debt fell due. Consult a qualified lawyer in the relevant country for formal claims.