Change in statutory default interest rate for transactions between companies

A regulation which is relevant for many companies has been changed in the last few days. The statutory default interest rate in accordance with Sec. 288 of the German Civil Code (BGB) for payment claims based on transactions between companies has been increased. As of 29.07.2014, the statutory interest rate is now nine percentage points above the basic rate of interest instead of eight percentage points.

If a debtor defaults on payment – and is not a consumer - the creditor of a payment claim now also has a statutory claim to reimbursement of a flat fee of EUR 40.00 in accordance with the new Sec. 288(5) of the German Civil Code (BGB). This flat fee is, however, to be set off any compensation owed, if compensation for legal costs in concerned.

Sec. 288(6) of the German Civil Code (BGB), which is also new, regulates special grounds for invalidity with respect to agreements which limit demands for default interest.

This change is based on the implementation of the German Act on Combating Late Payment in Commercial Transactions and the Amendment of the Renewable Energy Act of 22.07.2014 (BGBl. (Federal Gazette) I p. 1218).