Statutory interest - Italy
TABLE OF CONTENTS
- 1 Is "statutory interest" provided for in the Member State? If so, how is "statutory interest" defined in this Member State?
- 2 If yes, what is the amount/rate and legal basis for it? If different rates of statutory interest are provided for, what circumstances and conditions apply?
- 3 If necessary, is there further information available on how to calculate statutory interest?
- 4 Is there free online access available to the legal basis mentioned above?
1 Is "statutory interest" provided for in the Member State? If so, how is "statutory interest" defined in this Member State?
In Italy, statutory interest is added to a financial obligation.
The legal source is Article 1282 of the Italian Civil Code (Codice Civile), which establishes that liquidated and payable claims accrue interest automatically, unless otherwise established by law or title.
2 If yes, what is the amount/rate and legal basis for it? If different rates of statutory interest are provided for, what circumstances and conditions apply?
The amount of statutory interest is decided by the Italian Treasury on an annual basis by way of a decree issued by 15 December each year.
If the parties have agreed on an interest rate, the rate is the one decided by them. However, the rate must have been agreed on in writing and must not be higher than the maximum rate allowed under the anti-usury law (Law No 108 of 7 March 1996), otherwise the interest will be considered usurious and therefore null. In such cases, no interest will be owed (Article 1815 of the Civil Code).
If the parties have reached an agreement to apply an agreed interest rate but have not established the amount, the statutory rate is applied.
In the Italian legal system the situation regarding interest for late payment differs in part from that of statutory interest. Interest for late payment is intended as a penalty (for the debtor) and compensation (for the creditor). It is linked to non-fulfilment of a financial obligation following the late or non-payment for the service concerned within the period envisaged by law or on the basis of the agreements reached by the parties. For the creditor to be able to claim interest for late payment the debtor must be in arrears. ‘Arrears’ refers to a delay by the debtor in fulfilling his or her obligations. For arrears to apply, the due date must have passed and the debtor must have been given notice to pay: a formal document with which the creditor invites the debtor to make the payment due.
Under the Civil Code, interest for late payment is due at the statutory rate or at a rate determined by law. However, if interest higher than the statutory rate was due before the debtor was given notice to pay, then the interest on arrears will be of the same amount (Article 1224 of the Civil Code).
Under Article 1284 of the Civil Code the rate of statutory interest is determined on an annual basis by the Minister for the Economic Affairs and Finance. Through a decree published in the Official Gazette of the Italian Republic, the Minister changes the rate on the basis of the average annual yield of government bonds with a maximum duration of 12 months, taking into account the inflation rate recorded over the year. This amount is set no later than 15 December of the year preceding the one to which the rate applies. If, by 15 December, the new rate has not been set, the existing one will remain unchanged for the following year.
Since 1 January 2017 the statutory interest rate has been 0.1 %.
Table showing the changes in the interest rate over time, from 2010:
From 1 January 2010 to 31 December 2010
From 1 January 2011 to 31 December 2011
From 1 January 2012 to 31 December 2013
From 1 January 2014 to 31 December 2014
MD of 12 December 2013
From 1 January 2015 to 31 December 2015
MD of 11 December 2014
From 1 January 2016 to 31 December 2016
MD of 11 December 2015
From 1 January 2017 to 31 December 2017
MD of 7 December 2016
Interest higher than the statutory rate must be determined in writing, otherwise the statutory rate is due.
If the parties have not decided on a rate, from the time that the document instituting proceedings is submitted the statutory interest rate will be equal to the rate envisaged by the special law concerning late payment in commercial transactions (see below). This rule also applies to the act initiating arbitration proceedings.
Special legislation relating to late payment in commercial transactions
To implement Directive 2000/35/EC on combating late payment in commercial transactions, the Italian legislator issued Legislative Decree No 231/2002 as amended. This expressly envisages, as interest for late payment in commercial transactions, a higher interest rate than the statutory rate. Under Legislative Decree No 231/2002, commercial transactions means ‘contracts of any description between undertakings or between undertakings and public authorities which involve, solely or predominantly, the delivery of goods or the performance of services against the payment of a fee’. The Decree provides that, in the context of a commercial transaction, ‘anyone who is unjustly subjected to a delay in the payment of the fee is entitled to automatic payment of the interest on late payment which takes effect, without need of a formal notice to pay, from the day following the expiry of the deadline for payment’, unless the debtor is able to show that the non-payment was the result of causes not imputable to him or her.
Under this law interest on late payments in commercial transactions is based on the rate set each year by the Ministry of Economic Affairs and Finance and summarised in the table below, specifying: a) for the first half of the year to which the delay refers, the rate used is the one in force on 1 January of that year; b) for the second half of the year to which the delay refers, the rate used is the one in force on 1 July of that year.
Table showing the changes in the interest rate for late payments over time, from 2010:
3 If necessary, is there further information available on how to calculate statutory interest?
4 Is there free online access available to the legal basis mentioned above?
There are numerous websites providing free software to calculate statutory interest and interest for late payments.
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Last update: 22/01/2018