Content Hub

Content Hub

Invoices with overdue payments are now subjected to a 12.5% interest rate

David Buhagiar


Interest starts accumulating if the invoice remains unpaid beyond the standard 30-day period, unless agreed otherwise.

As of January 1,2024, the interest rate for late payments in commercial transactions has risen to 12,5%, reflecting a 0,5% increase from July 1. This adjustment follows the European Central Bank’s reference rate modification.

The Malta Association of Credit Management (MACM) urges local businesses to take note, cautioning that late B2B payments are now subject to this higher interest rate.

Late payments from businesses can strain cash flow, impeding their ability to meet operational expenses and invest in growth opportunities. This can adversely affect relationships with suppliers and damage the overall financial health of the business.

Other conditions relating to the interest chargeable for late payment in commercial transactions are:

  • Payment Period Limit: The stipulated payment period in the sales contract should not surpass 60 calendar days, but an extension may be considered if it is deemed fair to the creditor.
  • Claim Without Reminder: Creditors can proceed with a claim for late payment against the debtor without issuing a reminder.
  • Transactions with Public Authorities: In dealings between undertakings and public authorities, the payment period is 30 calendar days if not expressly agreed and may not exceed 60 calendar days if fixed in the contract.
  • Public Authorities with Economic Activities: If a public authority engages in economic activities and provides health care, and the payment period isn’t explicitly defined, it shall not exceed 60 calendar days.
  • Nullification of Extension Agreement: Any agreement between the creditor and debtor to extend the invoice receipt date is considered null and void.
  • Compensation for Recovery Costs: In addition to interest charges, creditors are entitled to reasonable compensation (minimum €40) for their recovery costs.
  • Retention of Title: If the contract of sale includes a retention of title clause, the seller retains title over the goods until the buyer has paid in full.

Your business is an asset, and it is important to understand its worth and how to improve it regardless of whether you wish to grow or sell.

Our Value Builder Score system can help you understand how your business is performing and identify the areas where value can be improved. By filling out a brief questionnaire, you will receive a custom report based on your answers which gives more detailed information on the 8 factors that drive your company’s value.

Get your score

Contact us via email at or give us a call at +356 79903685 for more information about the Value Builder Score!

Author: David Buhagiar

I’m David Buhagiar, your local business doctor for Malta

Other Articles By This Author