The invoice is late. The entitlement is automatic. The number is not.
A model finishes a booking. The client receives the invoice. The payment term passes. Under the EU late-payment regime, the creditor’s entitlement to statutory interest and a fixed recovery sum is automatic — it does not depend on a reminder, a warning, or a clause in the contract granting it. That is the part most working models never hear. The part that follows is harder: the directive sets a floor, not a figure, and the actual amount depends on the member state whose law applies, the reference rate in force for the relevant half-year, and the payment term the contract actually created.
This article walks through what Directive 2011/7/EU requires, what it leaves to national law, and what a model or parent should locate before asserting any number on a statement or a demand. It is not legal advice, and it does not establish that any particular booking, agency, or client has triggered a valid claim. It is a reading guide to the paperwork.
What the directive itself establishes
The European Commission’s own summary of Directive 2011/7/EU on combating late payment in commercial transactions states the core mechanics plainly. The directive was adopted on 16 February 2011, with transposition into national law due by 16 March 2013 at the latest. Its main provisions, as the Commission describes them:
- Public authorities must pay for procured goods and services within 30 days, or in very exceptional circumstances within 60 days.
- Enterprises must pay their invoices within 60 days, unless they expressly agree otherwise and provided the agreed term is not grossly unfair.
- There is an automatic entitlement to interest for late payment and a €40 minimum as compensation for recovery costs.
- Statutory interest is at least 8% above the European Central Bank’s reference rate.
- EU countries may maintain or introduce laws more favourable to the creditor than the directive’s provisions.
Source: European Commission, Late payment (DG GROW).
Two features of that list matter more than the rest for a model reading a late statement. First, the entitlement is automatic — the Commission’s language is not “may claim” but “automatic entitlement.” Second, the 8-point margin and the €40 sum are minimums. The directive is a floor. A member state may set a higher margin, a higher fixed sum, or both, and the Commission expressly preserves national laws more favourable to the creditor.
The two components of the statutory rate
The statutory interest rate under the directive has two parts: a reference rate plus a margin of at least 8 percentage points. The reference rate is the ECB rate for euro-area member states; for member states outside the euro area, the equivalent national central bank rate. The margin is the directive’s floor of 8 points, which national law may exceed.
The reference rate is not a single number for all time. It is fixed for six-month periods, and the rate in force on 1 January governs the first half of the year while the rate in force on 1 July governs the second. A model calculating interest on an invoice that fell due in March and was paid in August must split the calculation at 30 June if the reference rate changed at the half-year boundary. This is the single most common arithmetic error in a manual late-payment calculation, and it is the reason a statement that quotes one rate for a cross-boundary delay should be checked before it is sent.
The directive does not itself publish the reference rate. The Commission directs readers to the Your Europe Business portal for statutory interest rates by member state and a late-payment interest calculator. Any figure quoted in a demand should be traceable to that source or to the national implementing law, not to a secondary summary.
The €40 fixed sum: automatic, per debt, and not defeated by smallness
Article 6 of the directive gives the creditor a fixed sum of at least €40 as compensation for recovery costs. Three features are easy to miss and worth stating precisely.
It is automatic. Article 6(2) provides that compensation for recovery costs is due automatically, even if the creditor does not issue a reminder to the debtor. A model does not have to send a warning letter, and does not have to prove that €40 of cost was actually incurred, before the sum becomes due.
It is per debt. The fixed sum attaches to each overdue debt, not to each customer or each relationship. A model with six small unpaid bookings has potentially triggered the fixed sum six times. On a book of small invoices, the fixed sum can matter more than the interest, which on a €1,000 invoice at a statutory rate in the low teens is a few euros per month.
It cannot be dismissed as trivial. In Case C-279/23 (11 July 2024), the Court of Justice of the European Union held that Article 6(1) of the directive prevents national courts from dismissing an action for the fixed minimum sum on the grounds that the amount due is small or the delay in payment is negligible. The Court reasoned that the directive contains no indication that the fixed sum is unavailable where the claim is low or the delay is minor, and that Article 7(3) treats a contractual term or practice excluding compensation for recovery costs as grossly unfair. The ruling is reported and summarised by Ganado Advocates in Chambers; the judgment itself is on the Court’s site.
What the ruling does and does not do deserves precision. It removes, at the level of principle, the objection that a small claim or a short delay defeats the €40. It does not tell a model what their own contract says, which member state’s law applies, or what a national court will do with the facts of a particular booking. It is a principle, not a calculation.
What the directive does not tell you
The directive is a floor, and the Commission says so. Each member state transposed it into national law, and the national text — not the directive — supplies the operative margin, the operative fixed sum, and the reference-rate source for that market. The Commission’s page links to a summary of national legislation and to the Your Europe Business portal for rates by member state. A model who quotes the directive’s 8 points and €40 as if they were the answer in every market is quoting the floor as if it were the ceiling.
This matters for the markets this publication covers. The United Kingdom is no longer an EU member state, and the directive does not apply there; the UK has its own late-payment regime. The UK government’s guidance on late commercial payments states that if no payment date is agreed, payment is late 30 days after the customer receives the invoice or the goods or service is provided, whichever is later. That is a different default-timing rule from the directive’s, and a model working across London and Paris should not assume the same clock runs in both.
France, Italy, and the other euro-area markets each have their own implementing text. The directive does not tell a model which margin France applies, whether Italy’s fixed sum is expressed in euros at the floor or above it, or which national reference rate applies outside the euro area. Those are questions for the national law of the member state whose courts would hear the claim — which is itself a question the contract may answer, and which the directive does not resolve.
Where the payment term comes from
The directive’s default timing rules apply where the contract does not validly set a different term. The Commission’s summary states that enterprises must pay within 60 days unless they expressly agree otherwise and provided the agreed term is not grossly unfair. That means the first document a model or parent should locate is not the invoice but the contract: the booking confirmation, the agency agreement, the terms on the reverse of the voucher, or whatever document created the payment obligation. The invoice due date is the second document. The member state whose law applies is the third.
If the contract sets a term longer than 60 days, the question is whether that term was expressly agreed and whether it is grossly unfair. The directive does not answer that question in the abstract; it is a question of the facts and of national law. A model should not assume that a 90-day term on a booking confirmation is enforceable merely because it is printed there, and should not assume it is unenforceable merely because it is long.
A worked illustration, clearly hypothetical
The following is an arithmetic illustration, not a real invoice, not a real client, and not a statement that any model has a claim in these terms. It shows how the components fit together so that a reader can see what to check.
Assume a €5,000 invoice, a payment term that validly makes payment due on 31 March, and payment received on 15 May — 45 days late. Assume the applicable member state applies the directive floor of 8 points and a €40 fixed sum, and assume a reference rate of 3.00% in force on 1 January of that year.
- Statutory rate: 3.00% + 8.00% = 11.00% per year.
- Daily rate: 11.00% ÷ 365 = 0.0301% per day.
- Interest for 45 days: €5,000 × 0.11 × 45 ÷ 365 = €67.81.
- Fixed recovery sum: €40.00.
- Total on top of the invoice: €107.81.
Every figure in that illustration is an assumption. The reference rate is assumed, not sourced. The margin and fixed sum are assumed to be at the floor, not verified against any national text. The payment term is assumed valid. A real statement should show its sources for each assumption, or it should not be sent.
What to locate before asserting a figure
The practical sequence for a model or parent is documentary, not rhetorical. Before any demand or statement quotes a number, the following should be in hand:
- The contract or booking document that created the payment obligation. Identify the payment term it sets, whether that term was expressly agreed, and whether it is longer than 60 days.
- The invoice and its delivery date. The due date is calculated from the term and the delivery date, not from the date the model happened to send a reminder.
- The member state whose law applies. This may be stated in the contract, or it may follow from the parties’ establishment. The directive does not resolve it.
- The national implementing text for that member state. The Commission’s summary of national legislation and the Your Europe Business portal are the starting points. The national text supplies the operative margin, fixed sum, and reference-rate source.
- The reference rate in force for the relevant half-year. For euro-area invoices, the ECB rate; for non-euro-area member states, the national central bank rate. The half-year boundary matters for any delay that crosses 30 June or 31 December.
- The number of separate overdue debts. The fixed sum is per debt, so the count changes the arithmetic.
If any of those six items is missing, the figure is not ready. A statement that quotes a rate without a source, or a fixed sum without checking the national text, is a statement the client’s finance team can discount on the arithmetic alone.
Why the entitlement is under-used
The Commission’s own page records the reason this regime is under-exercised: “Evidence continues to show that in commercial relations, businesses, and especially SMEs, are reluctant to exercise these rights out of fear of damaging commercial relationships.” That is a description of a commercial calculation, not a legal one. A model who does not claim is making a decision about the relationship, and the decision may be rational. But it should be made with the number in hand, not in the absence of it. The fixed sum and the interest are leverage; whether to spend that leverage on a given client is a business judgment the model is entitled to make.
The directive’s design assumes that creditors will use the entitlement. The automatic nature of the fixed sum, and the Court’s refusal in C-279/23 to let smallness defeat it, are both directed at the same problem: a creditor who has to ask for interest usually will not ask. The regime removes the asking. It does not remove the calculation.
FAQ
Does the directive apply to a self-employed model invoicing a client?
The directive applies to commercial transactions between undertakings. Whether a particular model’s contract with a particular client is a commercial transaction within the directive, and which member state’s implementing law governs it, depends on the facts and the contract. The directive’s text and the national implementing law are the sources; this article does not establish that any particular relationship falls within them.
Is the €40 payable even if the delay was only a few days?
In Case C-279/23 the Court held that Article 6(1) prevents national courts from dismissing an action for the fixed minimum sum on the grounds that the amount is small or the delay is negligible. The fixed sum is automatic under Article 6(2) and does not require a reminder. What a national court does with the facts of a particular case is a separate question.
Can a contract exclude the fixed sum or the interest?
Article 7(3) of the directive treats a contractual term or practice that excludes compensation for recovery costs as grossly unfair. The directive’s treatment of terms that exclude interest is a related question; the national implementing law and the contract should be read together.
Does the directive apply in London?
The United Kingdom is not an EU member state and the directive does not apply there. The UK has its own late-payment regime; the government’s guidance states that where no payment date is agreed, payment is late 30 days after the customer receives the invoice or the goods or service is provided, whichever is later.
Where do I find the reference rate?
The Commission directs readers to the Your Europe Business portal for statutory interest rates by member state and a late-payment interest calculator. For euro-area invoices the reference rate is the ECB rate; for non-euro-area member states it is the national central bank rate. The rate in force on 1 January governs the first half of the year and the rate in force on 1 July governs the second.
What this article does not do
It does not tell a model that they have a claim, that a particular client is late in the legal sense, or that a particular figure is owed. It does not supply a current reference rate, a national margin, or a national fixed sum, because those must be read from the national implementing text and the official rate source for the relevant half-year. It does not replace advice on the contract or on the member state whose law applies. What it does is set out the directive’s mechanics, the Court’s ruling on the fixed sum, and the documentary sequence that precedes any figure — so that when a model or parent does assert a number, the number has a source behind it.