Ruqayyah Snyder
In Austria, the standard payment term is 30 days, and an extension of up to 60 days is permissible under Austrian law. While there is no statutory penalty for a breach of payment term regulations, the supplier is entitled to claim interest, EUR 40 per claim, and the costs of bringing the action and recovering debt. The Austrian court system is efficient and reliable, and pre-legal action conducted by specialists is the most effective method of collecting debt.
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What You'll Learn
Late payment interest and penalties
In Austria, there is no statutory penalty for a breach of payment term regulations. However, the supplier is entitled to claim interest, an amount of €40 per claim, and the costs of bringing the action and recovering debt. The supplier may also demand compensation for the damage caused by the delay if the respective conditions under Austrian civil law are met.
The standard payment term in Austria is 30 days. An extension of the payment term up to 60 days does not involve any specific requirements. When extending a payment period beyond 60 days, the following must be considered: evidence that there is no reason to consider the payment term contrary to good faith or fair dealing, and evidence that the agreed-upon payment term aligns with the commercial practice in the industry or region.
The default late payment penalty interest for commercial transactions is the base rate published by the Austrian National Bank plus 9.2%. The base rate applicable is the rate at the beginning of the calendar half-year.
According to Austrian tax law, a penalty of 10% of the VAT due is imposed when a VAT return is filed late. This penalty also applies when the VAT payment was made on time but the VAT return was not submitted.
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Debt collection methods
The debt collection process in Austria typically begins with out-of-court procedures, which can include:
- Contacting the debtor: An initial amicable notification is usually the first step for recovering debts in Austria. This can be done through letters and phone calls with personal contact.
- Partial payment agreements: Depending on the situation, partial payment agreements with acknowledgment of the claim can be made. These agreements may include a revival clause in case the debtor fails to comply.
- Demand letters: Sending a demand letter from a specialised debt collection law firm or lawyer can make it clear to the debtor that the claim is legitimate and that non-payment will likely result in immediate court proceedings.
If out-of-court methods are unsuccessful, claimants can proceed with legal enforcement of the claim. This typically involves initiating a dunning action, which can lead to a legally binding payment order enforced through execution steps for payment.
Both individuals and legal entities can turn to debt collection agencies in Austria, which are specialists in recovering debts. These agencies typically work on a contingency basis, where they receive a percentage of the recovered amount. The methods used by these agencies are usually similar to those employed by the claimant, but many debtors pay their debts once the situation becomes official. Debt collection agencies can assist in negotiating and executing out-of-court settlements to avoid court proceedings.
In cases where the debtor's assets are insufficient to cover the claims, a bailiff can inform the debtor of the decision and attempt to gather information about their assets that can be auctioned. If necessary, the debtor's property may be seized, and their assets auctioned to cover the claims.
For international debt collection cases, claimants can collaborate with debt collection networks that have local partners in the debtor's country. These networks can provide electronic processing, a stringent reporting system, and uniform tariffs.
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Court system and jurisdiction
Austria has a federal judicial system composed of local Courts of General Jurisdiction (Ordentliche Gerichte) divided into multiple Regional (Landesgerichte) and District (Bezirksgerichte) Courts of First Instance. The court system is a hierarchy with five levels: district, district collegiate, regional, higher regional, and supreme.
The Austrian court system foresees three instances. The courts of first instance are the district courts and the regional courts. District courts have jurisdiction in civil law matters where the amount in dispute does not exceed EUR 15,000, as well as certain family law and tenancy disputes, irrespective of the amount in dispute. In all civil law matters (except the above-mentioned) where the value of the claim exceeds EUR 15,000, the regional courts have first-instance jurisdiction.
In Graz and Vienna, the civil and criminal chambers are set up as two separate courts, meaning that each city has a civil regional court and a criminal regional court. In Vienna, there is also a third regional court for trials at mercantile law and a fourth regional court for cases involving employment and social assistance law.
The Austrian Act on Alternative Dispute Resolution provides for general rules for the various dispute boards set up to facilitate the amicable settlement of disputes prior to any court procedure. The Austrian Code of Civil Procedure and Austrian Act on Jurisdiction govern the jurisdiction among the district and regional courts. The Non-Contentious Proceedings Act governs certain civil law matters, such as certain succession law disputes or disputes in family matters. The Austrian Enforcement Code determines the enforcement of judgments, further issuance, and enforcement of interim measures.
The official language used in all Austrian courts is German, although a few courts also permit the use of Burgenland Croatian, Slovenian, or Hungarian for minority language groups.
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Insolvency law
Unfortunately, I could not find specific information on how to report non-payment in Austria. However, I can provide you with some details on the relevant laws and regulations.
In Austria, the standard payment term is 30 days, as per the provisions of the EU Directive 2011/7/EU, which has been implemented in the Austrian Civil Code ("ABGB") and the Austrian Commercial Code ("UGB"). An extension of the payment term of up to 60 days is permissible under Austrian law, specifically § 459 (3) UGB. This extension does not require any specific conditions to be met.
There is no statutory penalty for a breach of payment term regulations. However, in the event of a default, the supplier is entitled to claim interest, a sum of EUR 40 per claim, as well as the costs associated with bringing the action and recovering the debt. If the conditions under Austrian civil law are met, the supplier may also seek compensation for the damages caused by the delay.
It is important to note that there are special regulations concerning consumer credit agreements concluded before March 15, 2020. In certain circumstances, it is possible to suspend the lender's claims for three months.
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Consumer credit agreements
In Austria, banks are required to provide comprehensive information to borrowers prior to the conclusion of a credit agreement contract. This includes information about the effective annual rate and total exposure. Borrowers must also be provided with a copy of the "Standard European Consumer Credit Information form for loans under the Consumer Loans Act" before the loan agreement is concluded.
The standard payment term in Austria is 30 days. An extension of the payment term up to 60 days does not require any specific conditions to be met. However, there is no statutory penalty for a breach of payment term regulations. If a borrower is unable to pay an instalment, they will incur costs such as charges for payment reminders and interest for late payments, which will increase the total amount of the loan.
For credit agreements that are secured against a mortgage and intended for the purpose of acquiring property, there is a grace period of two days to cancel the agreement. For all other loans, there is a grace period of 14 days. During this grace period, borrowers have the right to withdraw from the loan agreement without stating their reasons for doing so.
In the case of a loan agreement with a fixed term, Austrian banks are required, upon request, to provide borrowers with a breakdown in the form of a repayment plan at any time during the entire term of the loan agreement. This repayment plan must clearly state which payments are to be made at what intervals, as well as any conditions that apply to these payments.
Additionally, there is a special regulation concerning consumer credit agreements concluded before 15 March 2020. In these cases, it may be possible, under certain circumstances, to suspend the lender's claims for three months.
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Frequently asked questions
Late payment interest may be claimed from the day following the due date. The Late Payment law, which entered into force on 1 March 2013, stipulates that payments in the EU must be made within 60 days. The supplier is entitled to claim interest, a fixed amount per claim, and the costs of bringing the action and recovering the debt.
The standard payment term is 30 days. An extension of the payment term up to 60 days does not involve any specific requirements.
The court system in Austria is efficient and reliable, but pre-legal action conducted by specialists remains the most effective method of collecting debt.
