Interest for late payment or how to discipline an unreliable contractor

It is an unwritten but commonly applied principle of entrepreneurs not to charge their business partners interest for late payment of an obligation. Entrepreneurs are respectful of the business relationship they have with their counterparties and often, not wanting to spoil business relations, do not charge interest for late payment of invoices.

Unreliability does not pay off

The Covid-19 pandemic and the war in Ukraine and the global crisis triggered by these events have changed the rules. Rising inflation, problems with the supply of essential products, delays in supply chains mean that businesses are faced with huge and ever-increasing costs. The result is the need to ‘tighten the belt’, cut unnecessary costs and increase control over the collection of payments from trading partners. A way of disciplining unreliable counterparties may be precisely to start charging interest for late payment in commercial transactions. This solution is provided for in the Act of 8 March 2013 on the prevention of excessive delays in commercial transactions (consolidated text Dz.U. – Journal of Laws 2022, item 893).

Charging interest is a right of the entrepreneur and not an obligation. For this reason, a custom has developed whereby regular business partners do not charge default interest between themselves. Many take advantage of this rule for their own benefit by making their counterparties into free credit institutions. They deliberately fail to pay their dues or take on too much debt because they know they will not incur any costs in using their counterparty’s capital. The most common move is to delay payment for services already rendered or for goods delivered.

When can interest be claimed?

Traders cannot always claim interest from their counterparty for a delay in a commercial transaction. Several conditions need to be met:

  1. a) the debtor is not a public entity;
  2. b) the creditor has fulfilled his performance;
  3. c) the period for payment fixed in the contract does not exceed 60 days from the date of delivery to the debtor of the invoice or bill confirming the delivery of the goods or the performance of the service, unless the parties have expressly agreed otherwise in the contract and provided that such an arrangement is not grossly unfair to the creditor;
  4. d) the contractual payment period does not exceed 60 days, calculated from the date of delivery to the debtor of an invoice or bill confirming the delivery of goods or the performance of a service, if the debtor obliged to pay for the goods or services is a large entrepreneur and the creditor is a micro, small or medium-sized entrepreneur;
  5. e) the creditor has not received payment by the date specified in the contract.

An entrepreneur who has fulfilled the above conditions is entitled, without prior notice to the debtor, to statutory interest for late payment in commercial transactions, unless the parties have agreed on a higher interest rate. The period for which interest is due is calculated from the due date of the monetary consideration until the date of payment.

The law does not specify the amount of statutory interest and its variability is determined by changes in the reference rate set by the National Bank of Poland.

The rate in force on the date shall be used to determine the amount of statutory interest:

1) 1 January – to interest due for the period from 1 January to 30 June;

2) 1 July – to the interest due for the period from 1 July to 31 December.

The current rate of statutory interest in commercial transactions where the debtor is not a public entity that is not a healthcare provider is (as at 10 November 2022) 16% per annum.

Interest in the absence of a time limit for payment

An entrepreneur who has not set a specific date of payment in a contract with a counterparty may claim interest. In such a case, statutory interest for delay in commercial transactions is due after the lapse of 30 days counted from the date of the entrepreneur-creditor’s performance until the date of payment. Importantly, the trader acquires the right to charge interest by virtue of the law, it is not necessary to first call the debtor to pay.

Where the parties have provided in the contract for a survey of the goods or services to confirm their conformity with the contract, the expiry of 30 days shall be counted from the date of completion of the survey.

Can interest be claimed before the due date?

Interest for delay in a commercial transaction before the due date of a claim for payment can be claimed by a trader who is not a large trader. Public entities that are medical entities are also completely excluded from this regulation.

Charging interest before the due date will only apply in the case of commercial transactions that provide for a payment period of more than 30 days. In such a situation, the trader-creditor may claim statutory interest after the expiry of 30 days, calculated from the date of fulfilment of his performance and delivery to the debtor of an invoice or bill, which confirms the delivery of goods or the performance of a service, until the date of payment, but no longer than until the due date of the monetary performance. or the entitlement of the trader-creditor to arise, it is not necessary to call the debtor in advance, the claim arises by operation of law.

Entrepreneur, exercise your right

The regulation aimed at counteracting excessive delays in commercial transactions quite extensively protects businesses against untimely partners. Given the current economic situation and the very high interest rates, it is worth considering the use of the statutory powers. The spectre of additional and high amounts of interest will undoubtedly mobilise debtors to settle their obligations on time, which in turn will have a positive impact on the financial situation of many businesses.


Beata Bieniek-Wiera

Partner, Advocate

Beata Bieniek-Wiera

Maciej Marzec

Trainee Attorney at Law, Certified ATS Advisor

Maciej Marzec