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Invoice Collection Laws by Country: Complete Guide

The definitive reference for invoice collection laws in 30+ countries. Payment deadlines, late fees, interest rates, legal procedures, and compensation rights. Updated for 2026.

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European Union

The EU has the strongest legal framework for late payment protection.

EU Directive 2011/7/EU (Late Payment Directive)

All EU member states must implement this directive, which provides:

  • Payment deadline: 30 days for public sector; 60 days maximum for commercial transactions (unless agreed otherwise and not grossly unfair)
  • Late payment interest: ECB reference rate + 8 percentage points for commercial transactions; ECB rate + 8 points for public sector
  • Compensation: Fixed compensation of €40 per invoice
  • Recovery costs: Reasonable recovery costs in addition to interest and compensation

Spain (Ley 3/2004)

Spain's anti-late payment law is one of the most comprehensive in Europe:

  • Payment deadline: 30 days for public sector; 60 days maximum for commercial transactions
  • Late payment interest: 8% over ECB reference rate (currently 8.35% for public bodies, variable for private sector)
  • Compensation: €40 fixed per invoice; additional compensation for invoices over €10,000
  • Legal procedure: Monitorio procedure for undisputed claims under €250,000

France (Loi LME)

  • Payment deadline: 30 days for public sector; 60 days maximum for commercial transactions
  • Late payment interest: ECB rate + 10 percentage points for commercial; ECB rate + 8 points for public
  • Compensation: €40 minimum per invoice
  • Mise en demeure: Formal demand letter required before legal action; minimum 8 days notice

Germany (Gesetz gegen Zahlungsverzug)

  • Payment deadline: 30 days for public sector; 60 days maximum for commercial transactions
  • Late payment interest: 9 percentage points above the Bundesbank base rate (Basiszinssatz) for commercial transactions
  • Recovery costs: Reasonable recovery costs in addition to interest
  • Legal procedure: Mahnverfahren for fast, low-cost enforcement of undisputed claims

Italy (Legge 192/2012)

  • Payment deadline: 30 days for public sector; 60 days maximum for commercial transactions
  • Late payment interest: ECB rate + 8 percentage points for commercial; ECB rate + 9 points for public
  • Compensation: €40 fixed per invoice; additional compensation for invoices over €5,000
  • Legal procedure: Tribunale for civil disputes; Juicio Ejecutivo for undisputed claims

Netherlands (Burgerlijk Wetboek)

  • Payment deadline: 30 days for public sector; 60 days maximum for commercial transactions
  • Late payment interest: ECB rate + 8 percentage points
  • Recovery costs: Reasonable recovery costs in addition to interest
  • Legal procedure: Kantongerecht for small claims up to €25,000

Portugal (Código Civil)

  • Payment deadline: 30 days for public sector; 60 days maximum for commercial transactions
  • Late payment interest: ECB rate + 8 percentage points
  • Recovery costs: Reasonable recovery costs in addition to interest
  • Legal procedure: Tribunal for civil disputes

United Kingdom (Late Payment of Commercial Debts Act)

  • Payment deadline: 30 days for public sector; 60 days maximum for commercial transactions
  • Late payment interest: 8% over Bank of England base rate
  • Compensation: £40 for debts under £1,000; £70 for £1,000–£10,000; £100 for over £10,000
  • Legal procedure: Small Claims Court for debts under £10,000; County Court Judgment (CCJ) for larger debts

Americas

United States

No federal late payment law. Rights and remedies vary by state:

  • Payment deadline: Set by contract (Net-30, Net-60, Net-90 are common)
  • Late payment interest: Varies by state (California allows interest on certain contracts; other states have specific statutes)
  • Compensation: Varies by state and contract
  • Legal procedure: Small Claims Court (limit varies by state, typically $3,000–$15,000); civil court for larger claims

Canada

  • Payment deadline: No federal standard; 30 days common
  • Late payment interest: Varies by province (Ontario allows 3% per month; Quebec has specific Civil Code provisions)
  • Legal procedure: Small Claims Court (limit varies by province, typically $15,000–$50,000)

Mexico (Código Civil / Código de Comercio)

  • Payment deadline: 30 days for public sector; commercial terms by contract
  • Late payment interest: Legal rate (approximately 9% annually for civil; higher for commercial)
  • Legal procedure: Juicio Ejecutivo for fast, low-cost enforcement of undisputed claims

Brazil (Código Civil / Lei 9.779/99)

  • Payment deadline: 30 days for public sector; commercial terms by contract
  • Late payment interest: 1% per month (12% annually) for civil matters; higher for commercial
  • Monetary correction: Applied automatically due to high inflation
  • Legal procedure: Juizado Especial Cível for small claims up to 40 minimum wages

Argentina (Código Civil y Comercial)

  • Payment deadline: 30 days for public sector; commercial terms by contract
  • Late payment interest: 3% per month for civil matters; higher for commercial
  • Monetary correction: Applied due to high inflation
  • Legal procedure: Juicio Ejecutivo for undisputed claims

Colombia (Código Civil / Ley 1231/2008)

  • Payment deadline: 30 days for public sector; commercial terms by contract
  • Late payment interest: DTF + 6 percentage points for commercial transactions
  • Legal procedure: Juicio Ejecutivo for undisputed claims

Asia-Pacific

India (Indian Contract Act / MSME Development Act)

  • Payment deadline: 45 days for MSMEs supplying to large companies; otherwise by contract
  • Late payment interest: 3 times the RBI repo rate for MSMEs; otherwise by contract
  • Legal procedure: MSME Samadhan Portal for complaints against large companies; civil court for other disputes

Australia

  • Payment deadline: No federal standard; 30 days common
  • Late payment interest: Varies by state (Queensland allows 10% annually)
  • Legal procedure: Small Claims Tribunal (limit varies by state, typically $10,000–$25,000)

United Arab Emirates

  • Payment deadline: No federal standard; 30 days common
  • Late payment interest: By contract; legal rate approximately 5-9% annually
  • Legal procedure: Dubai Courts / DIFC Courts for disputes; varies by free zone

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Key takeaways

  • EU has the strongest protections — mandatory late payment interest, fixed compensation, and strict deadlines
  • US has no federal standard — rights vary by state and contract
  • Latin America has strong laws but weak enforcement — legal rates exist but are rarely used
  • Asia-Pacific varies widely — some countries (India, Australia) have specific protections; others rely on contract
  • Always include payment terms in your contract — even in countries with strong legal protections, a clear contract is your best defense

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