Dealing with unpaid invoices can be challenging for businesses and consumers alike. In the Netherlands, strict regulations govern the amount of debt collection costs (incassokosten) that can be charged. This comprehensive guide explains everything you need to know about these costs. If you want to get started with the right debt collection documents, please start with this module.
What Are Debt Collection Costs?
Debt collection costs are the additional charges that can be added to an unpaid invoice to compensate for the efforts of collecting the debt. These costs are regulated by Dutch law to protect consumers from excessive charges while ensuring creditors can recover reasonable costs for their collection efforts.
Legal Requirements Before Charging Collection Costs
The relevant regulation to follow is laid out here. Before any collection costs can be charged, creditors must follow these mandatory steps:
- Send a formal payment reminder (aanmaning) to the debtor
- Provide a minimum 14-day payment term from receipt of the reminder
- Explicitly state the amount of collection costs that will be charged
- Clearly warn that collection costs will be added if payment isn’t received within the given term
How Are Collection Costs Calculated?
The Netherlands uses a fixed percentage system for calculating collection costs. Here’s the official table for calculating these costs:
| Principal Amount | Percentage | Maximum for Range | Cumulative Maximum |
|---|---|---|---|
| Up to €2,500 | 15% | €375 | €375 |
| €2,500 – €5,000 | 10% | €250 | €625 |
| €5,000 – €10,000 | 5% | €250 | €875 |
| €10,000 – €200,000 | 1% | €1,900 | €2,775 |
| Above €200,000 | 0.5% | €4,000 | €6,775 |
Important notes:
- Minimum charge: €40
- Maximum total collection cost: €6,775
- The percentages are applied in stages to different portions of the debt
VAT on Collection Costs
The VAT treatment of collection costs depends on the creditor’s VAT status:
- VAT-registered businesses: Cannot charge additional VAT on collection costs
- Non-VAT registered entities: May add 21% VAT to the collection costs
Practical Example
For an unpaid invoice of €450 (including VAT):
- Calculation: €450 × 15% = €67.50
- The legally permitted collection cost would be €67.50
For an unpaid invoice of €3,000:
- First €2,500: 15% = €375
- Remaining €500: 10% = €50
- Total collection costs: €425
Special Cases and Considerations
Business-to-Business Transactions
- These regulations primarily apply to consumer debts
- Different rates may apply for B2B transactions, often specified in terms and conditions
- B2B contracts may include different collection cost arrangements
Multiple Unpaid Invoices
- When collecting multiple invoices from the same debtor, they should be combined before calculating collection costs
- This often results in lower total costs due to the sliding scale
International Debts
- These regulations apply to Dutch domestic cases
- Cross-border debt collection may involve different rules
- EU regulations might apply for international cases
Tips for Creditors
Documentation Requirements
- Keep original invoices and proof of delivery
- Save all payment reminders and communications
- Document all attempts to contact the debtor
- Maintain clear records of payment terms and due dates
Professional Debt Collection
- Consider using a professional debt collection agency for:
- Ensuring compliance with regulations
- Efficient debt recovery
- Professional communication
- Legal expertise when needed
Risk Management
- Implement clear credit check procedures
- Set up proper invoicing systems
- Maintain consistent follow-up procedures
- Consider credit insurance for large amounts
Tips for Debtors
Immediate Actions
- Respond promptly to payment reminders
- Don’t ignore collection notices
- Keep all correspondence
- Document all payments and communications
Financial Difficulties
- Communicate proactively with creditors
- Request payment arrangements if needed
- Consider seeking financial advice
- Know your rights regarding collection costs
Verification Steps
- Check if collection costs have been calculated correctly
- Verify the original invoice amount
- Ensure the 14-day notice period was respected
- Confirm all charges are legitimate
How to go ahead with debt collection
Understanding debt collection costs is crucial for both creditors and debtors in the Netherlands. The clear regulatory framework provides protection for consumers while ensuring fair compensation for collection efforts. Always ensure compliance with current regulations and consider seeking professional advice for complex cases.
Need help with debt collection? Fill out the form below or start your own debt collection process here.
