The Netherlands collection profile

Netherlands (the)

Netherlands (the)

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World Bank Doing Business
2014: 28/189 countries
2013: 30/189 countries

Complexity of collecting debt:

notable High Very High Severe

Executive summary

  • The paying behavior of domestic companies is very good with payment normally taking place within 46 days; however the rules that implement the latest EU Directive on late payments are less demanding than the EU standards.
  • In practice, although the courts are reliable, negotiating payment instalments is often the most efficient way to avoid unnecessary costs and a specialized collection agency may often suffice to obtain payment.
  • When the debtor has become insolvent, debt renegotiation mechanisms are available but remain inefficient and unused whilst the most bankruptcies are terminated without any payments of dividends to unsecured creditors.
General Information GENERAL INFORMATION arrow-transparent
Collection Practices COLLECTION PRACTICES arrow-transparent
Court Proceedings Court PROCEEDINGS arrow-transparent
Insolvency Proceedings INSOLVENCY PROCEEDINGS arrow-transparent
General Information 


Days Sales Outstanding (DSO)

The paying behavior of Dutch domestic companies is excellent and payments normally take place within 46 days (2015 figures), or following delivery. Delays of up to 14 days may be expected but these remain rare and may be explained by the fact that, as a result of a lack of banking support, domestic companies sometimes use payment delays as a means to manage cash flow.​


Late payment interest

The EU Directive 2011/7/EU which stipulates that payments in the EU must be made within 60 days was expectedly transposed into Dutch law on March 16th 2013 through a new 'Act' limiting the provisions of the Dutch Civil Code on contractual payment deadline. By contrast with other EU Member States, the implementing law is not stricter than the Directive requirements: payment in business-to-business transactions cannot exceed 60 days unless an agreement between the parties expressly stipulates otherwise (and as long as the arrangement is not grossly unfair). Under the Act, interest for late payment ought to be calculated on the basis of the European Central Bank's reference rate, increased by at least 8 percentage points (against 7 with the former rule).

Under the new Section 96 of the Dutch Civil Code, the creditor is also entitled to receive a flat EUR 40 sum to compensate for its collection costs and, if the debt is collected by a third party for collection, the debtor may additionally by held liable for such costs. In practice, however, the Terms & Conditions of the creditor are used as a basis whilst calculating collection costs and interest. Only if there are no terms and conditions, or if the terms and conditions were not agreed properly, the (lower) legal tariffs of the Dutch Civil Code will be applicable. As a general rule, Dutch businesses overall have no problem using interest and costs as negotiation tools but would always bear in mind potentially negative impacts the on-going business relationship.

collection practice 


Orchestrated negotiation first

Although domestic tribunals are efficient, amicable settlement opportunities should always be considered as an alternative to formal proceedings. In addition, before starting legal proceedings against a debtor, assessment of assets is important as it allows verification as to whether the company is still active and whether recovery chances are at good. In addition, it is essential to be aware of the debtor’s solvency status: if insolvency proceedings have been initiated, it indeed becomes impossible to enforce a debt (see below). Warning the debtor of a decision to take legal action is not mandatory but it remains advisable to commence legal dunning with a registered Demand Letter recalling the debtor its obligation to pay the principal together with late payment interests (as contractually agreed or taking a legal rate as a reference). Indeed, domestic courts tend to request proof that the parties have attempted to an amicable settlement before initiating formal legal action. Furthermore, negotiating payment instalments is often a fairly easy way to avoid unnecessary costs and having a collection agency may often suffice to obtain payment.

Court Proceeding 


The Netherlands has a Civil Law system in which the rules are codified rather than based on the case law. The judiciary is built upon various courts of general jurisdiction which deal with claims taking the amounts at stake into account rather than on a subject matter basis. County Courts (Kantongerecht) would normally deal with small claims of up to EUR 25,000, whilst claims in excess of this amount would fall under the jurisdiction of District Courts (Rechtbank). The Court of Appeal (Gerechtshof) would then be competent in second instance, whilst the Supreme Court (Hoge Raad) is the court of final jurisdiction.

The parties may first have a simplified fast-track (kantongerecht) alternative to ordinary legal proceedings, but this normally requires that the debt (below EUR 25,000) be certain and undisputed. Of course, threatening the debtor to initiate insolvency procedures may also prove efficient as long as one or two creditors own(s) a minimum of two certain and undisputed claims against the debtor. In such situations, the debtors would usually react rapidly and propose payment instalment plans. When the debtor company has assets in other EU Member States, a European Payment Order procedure facilitating the recovery of undisputed debts (under Regulation EC No 1896/2006) may furthermore be triggered. In this case, the demanding party may request a domestic court to issue an Order to Pay which will then be enforceable in all European Union countries (except Denmark) without exequatur proceedings. Ordinary legal action would otherwise commence when amicable collection has failed. The creditor would serve the debtor with summons through a bailiff and the debtor would normally be given six weeks to file a defence (failure to do so would allow the court to issue a default judgment). The court would then call a meeting and consider their arguments prior to rendering a decision. In complex cases, further hearings may take place.

insolvency Proceeding 


The court process in the Netherlands differs significantly from the other mechanisms considered in this profile but it is clearly in favor of the creditor. The Dutch Bankruptcy Act 1893 (Faillissementswet) treats insolvency through different procedures, but liquidation tends to prevail.


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