EU Payment Terms Law 2026 — What's Legal in B2B Contracts

EU Directive 2011/7/EU caps B2B payment terms at 60 days — but it is more nuanced than a simple maximum. Whether your 60-day term is enforceable depends on how it is agreed, what sector you are in, and which country's courts would hear a dispute. France, Italy, Germany, and Spain have each layered additional rules on top of the Directive. This guide gives you the full picture: what the law says, what the CJEU has ruled, and the exact contract wording that holds up.

What EU Directive 2011/7/EU Actually Says

Directive 2011/7/EU on combating late payment in commercial transactions lays down three key rules for B2B payment terms.

Rule 1: The 30-day default. If a contract says nothing about when payment is due, the debtor must pay within 30 days of receiving the invoice or the goods/services — whichever is later.

Rule 2: The 60-day maximum (with conditions). Parties may agree payment terms longer than 30 days, but terms exceeding 60 days are only valid if:

They are explicitly agreed in the contract (not implied or buried in standard purchase conditions)
They are not grossly unfair to the creditor

Rule 3: Automatic interest and fees. The moment any agreed deadline passes, the creditor is automatically entitled to interest at ECB + 8% (11.15% for H1 2026) and a minimum flat recovery fee — no notice or contractual clause required.

These rules are mandatory minimum standards. National law can go further (shorter deadlines, higher fees, stricter enforcement) but cannot go below the Directive's floor in ways that disadvantage creditors.

The "Grossly Unfair" Test

Article 7 of the Directive voids clauses that are "grossly unfair" to the creditor. The concept has been shaped by both the CJEU and national courts:

Clause Type	Grossly Unfair?	Outcome
90-day standard terms, non-negotiated	Generally yes	Void; statutory 60-day maximum applies
120-day terms, expressly negotiated with large equal parties	Depends on context	Courts weigh commercial justification
"Pay when paid" clause beyond 60 days	Yes	Void; statutory deadline applies
Interest exclusion clause	Yes	Void; statutory rate applies automatically
Verification period that artificially extends payment date	Yes if unreasonable	Clock runs from end of reasonable verification period
60-day terms, expressly agreed in writing	No	Enforceable

The burden of proof is on the debtor to show that terms exceeding 60 days are not grossly unfair — a significant reversal of the normal burden of proof in commercial disputes.

Country-Specific Rules That Go Beyond the Directive

France: The 60-Day Limit Is Mandatory, With a 45-Day Alternative

France implemented the Directive strictly. Under Art. L441-10 of the Code de Commerce:

The maximum payment term is 60 days from the invoice date or 45 days from the end of the month of invoicing — whichever the parties choose to express in their contract
Both caps are mandatory — they cannot be extended by agreement, regardless of company size or bargaining power
DGCCRF (the Directorate-General for Competition, Consumer Affairs and Fraud Control) enforces these limits actively, with fines of up to €75,000 for individuals and €375,000 for companies per infringement
Certain sectors have sector-specific maximums: transport (30 days), seasonal products (agreed at industry level)

Italy: 30-Day Default, Sector Rules for Perishables

Under D.Lgs. 231/2002 (Italy's implementation of the Directive):

The default payment period is 30 days for most commercial transactions — shorter than the Directive's 30-day default, which runs from the later of invoice or delivery
For perishable agricultural and food products, the maximum payment term is 30 days from delivery, regardless of any contractual agreement to the contrary
For other goods and services, parties may agree up to 60 days in writing
Public authority transactions are capped at 30 days, with no exceptions

Italy's shorter defaults and the strict perishables rule make it a creditor-friendly jurisdiction in principle — though enforcement in practice can be slower.

Germany: BGB §271a and the 60-Day Ceiling

Germany implemented the Directive through §271a of the BGB (Civil Code):

Payment terms exceeding 60 days in B2B contracts are only valid if expressly agreed and not grossly unfair
Public authority payment terms exceeding 30 days are invalid (60-day extension requires special justification)
The statutory interest rate of ECB + 8% (§288 BGB) applies automatically without demand
Germany's Mahnpauschale (flat recovery fee) is €40 per invoice under §288 para. 5 BGB

One German-specific rule worth noting: under the Directive transposition, verification and acceptance procedures agreed between parties to check conformity of goods or services must be completed within 30 days of receipt of the goods/services. The payment clock starts after the verification period — but if the verification period itself exceeds 30 days, that excess is challengeable as grossly unfair.

Spain: Strict 60-Day Maximum Across All B2B

Spain's Ley 3/2004 (as amended) is strict:

The maximum payment term for all B2B transactions is 60 days — without exception
This applies regardless of what the contract says; a 90-day term is simply void
Public authorities must pay within 30 days
AEAT and sector bodies periodically audit compliance, particularly in food supply chains

Standard Payment Terms Wording for Contracts

Include this clause in your B2B contracts to maximise protection:

Payment Terms. Invoices are due and payable within [30/60] days of the invoice date [or the date of delivery of the goods/services, whichever is later]. In accordance with EU Directive 2011/7/EU and applicable national law, overdue amounts accrue interest automatically from the due date at the ECB reference rate plus 8 percentage points per annum (the applicable rate for each half-year is the ECB rate in force on 1 January or 1 July respectively). The creditor is additionally entitled to a minimum flat recovery fee of €40 [or such higher amount as applicable under national law] per overdue invoice, without proof of actual costs. The right to claim full reasonable recovery costs in excess of the flat fee is expressly reserved. Any payment term agreed between the parties that exceeds 60 days and is not expressly negotiated and recorded herein shall be void and replaced by a 60-day payment term.

Payment due: [Due Date]. Late payments accrue statutory interest under EU Directive 2011/7/EU (ECB + 8% p.a.) plus a minimum €40 recovery fee, automatically from the due date.

This one-line footer costs nothing to add and signals that you know your rights — which itself deters late payment.

What Happens If Longer Terms Are Agreed?

If you sign a contract specifying 90-day or 120-day payment terms, the legal position depends on jurisdiction:

France and Spain: The clause is simply void — the 60-day maximum substitutes automatically by operation of law. You can demand payment at 60 days regardless of what the contract says.
Germany and Netherlands: The clause is voidable — it is enforceable unless challenged as grossly unfair. A supplier who has signed 90-day terms but later wants to challenge them must establish unfairness before a court.
Italy: For perishables, the 30-day maximum is absolute and void. For other goods, 90-day terms are challengeable as grossly unfair.

In practice, even where a clause is technically voidable rather than void, citing the Directive in a formal demand letter — and making clear you are prepared to challenge the terms — is often enough to prompt payment on a shorter timeline.

Reverse Charge Invoices and the Payment Clock

A common point of confusion: for cross-border B2B sales within the EU, the seller typically issues a zero-VAT reverse charge invoice, with the buyer accounting for the VAT in their own return. The payment obligation — and the payment terms clock — is completely unaffected by this VAT treatment.

The payment clock starts when the invoice is received and the goods/services are delivered (whichever is later), exactly as for any other invoice. The reverse charge notation on the invoice does not delay, reset, or affect the payment deadline in any way. However, an invoice that omits the required reverse charge wording may be considered defective under some national tax laws — and a defective invoice can, in some jurisdictions (notably Germany), delay the start of the payment clock. Make sure your reverse charge invoices include the legally required language.

If a client owes you on an overdue invoice — whether domestic or cross-border, VAT-inclusive or reverse charge — use the Late Payment Calculator to calculate the statutory interest and recovery fee in seconds. Enter the invoice date, due date, and outstanding amount, and the calculator applies the correct ECB + 8% rate for each period, giving you the exact figures to put in your formal demand letter.

Frequently Asked Questions

Can a large company force me to accept 90-day or 120-day payment terms?

Not legally in the EU, no. EU Directive 2011/7/EU provides that payment terms exceeding 60 days are only valid if they are expressly agreed in writing and are not grossly unfair to the creditor. Terms beyond 60 days imposed by a dominant buyer through standard purchase conditions — where the supplier has no real ability to negotiate — are presumptively grossly unfair and therefore void. National courts in France, Italy, and the Netherlands have struck down 90-day and 120-day standard terms in exactly these circumstances. The practical difficulty is that smaller suppliers often accept poor terms rather than risk losing the client relationship. If you do sign a contract with terms longer than 60 days, document that you accepted them under commercial pressure — this may support a later unfairness challenge. In France, DGCCRF (the competition and consumer authority) actively enforces the 60-day maximum and can fine companies whose standard terms exceed it, which gives suppliers an anonymous reporting route.

When does the payment term clock start — on invoice date or delivery date?

Under EU Directive 2011/7/EU, the 30-day default period starts from whichever of these events occurs latest: (a) the date the debtor receives the invoice, (b) the date the debtor receives the goods or services, or (c) if the debtor receives the invoice before the goods or services, the date of receipt of the goods or services. This last rule is important for service businesses: if you invoice at project start but the work is delivered at month-end, the payment clock starts from delivery, not the invoice date, under the default rule. Parties can contract out of this by specifying that payment terms run from invoice date — common in French contracts (which separately cap this at 45 days end of month or 60 days from invoice date). For reverse charge VAT invoices, the payment clock is not affected by VAT treatment — it runs from the same delivery/invoice receipt trigger as any other invoice. The moment the goods or services are delivered and the invoice received, the clock starts, regardless of how the VAT is accounted for.

What does "grossly unfair" mean in practice under EU law?

The concept of "grossly unfair" in Art. 7 of Directive 2011/7/EU has been developed by the Court of Justice of the EU (CJEU) and national courts. It is an objective test — not whether the weaker party subjectively felt pressured, but whether the clause deviates significantly from good commercial practice in a way that damages the creditor's interests. Key indicators that courts have found to make a clause grossly unfair include: payment terms beyond 60 days in standard (non-negotiated) B2B contracts; "pay when paid" clauses that make payment conditional on the debtor collecting from a third party beyond a 60-day window; clauses that exclude or cap the statutory interest rate below the Directive minimum; and terms that impose a verification or acceptance procedure purely to delay the payment clock, without a legitimate commercial justification. The CJEU confirmed in Case C-256/15 (Slovenské elektrárne) that national courts must use all available national law tools to prevent enforcement of grossly unfair terms, not merely declare them void but allow substitution of the statutory default.

How do reverse charge VAT invoices affect payment terms?

Reverse charge VAT treatment — where the buyer rather than the seller accounts for VAT — does not affect the payment terms clock or the statutory interest calculation under EU payment law. The invoice is still due on the same timeline as any other B2B invoice. However, a practical complication arises for the seller: because you do not charge VAT on a reverse charge invoice, the gross invoice amount equals the net amount, and you may receive the payment without any VAT component to reconcile. This simplifies the cash received, but means you must ensure your invoice clearly states "Reverse charge — VAT to be accounted for by the recipient" (or the equivalent in the applicable jurisdiction) to avoid any argument that the invoice was defective and therefore the payment term did not begin to run. A defective invoice can restart the payment clock in some national legal systems, so correct invoice format is as important as the payment terms themselves.

EU Payment Terms: What the Law Says and What You Can Agree (2026)

What EU Directive 2011/7/EU Actually Says

The "Grossly Unfair" Test

Country-Specific Rules That Go Beyond the Directive

France: The 60-Day Limit Is Mandatory, With a 45-Day Alternative

Italy: 30-Day Default, Sector Rules for Perishables

Germany: BGB §271a and the 60-Day Ceiling

Spain: Strict 60-Day Maximum Across All B2B

Standard Payment Terms Wording for Contracts

Add to Your Invoice Footer

What Happens If Longer Terms Are Agreed?

Reverse Charge Invoices and the Payment Clock

Frequently Asked Questions

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