The rate of default interest and the compensation for costs are determined by the law governing the contract, not by the debtor’s state or the court in which the claim is brought. Under Slovak law, between entrepreneurs, interest accrues at the ECB base rate increased by eight percentage points, together with fixed sum compensation of EUR 40. Under Czech law it is the Czech National Bank repo rate increased by eight percentage points, together with costs associated with asserting each claim of at least CZK 1 200. In the absence of a choice of law, the contract is as a rule governed by the law of the supplier’s state.
A Slovak company supplied goods to a customer in Brno, the invoice is three months overdue and the creditor wants to add interest and costs to the principal. A Czech company faces the same question with a Slovak customer. In both cases the same rule applies: the rate of default interest is determined neither by the debtor’s seat nor by the state of the court in which the claim will be brought, but by the law governing the contract. Slovak and Czech law differ both in the rate and in the fixed sum costs, so a wrongly chosen law shows up in every calculation.
Which law applies
The parties may choose the governing law (Article 3(1) of the Rome I Regulation). Where they have not done so, a contract for the sale of goods is governed by the law of the country of the seller’s habitual residence and a contract for the provision of services by the law of the country of the service provider (Article 4(1)(a) and (b)). The governing law also applies to the consequences of breach of obligations (Article 12(1)(c)), which includes late payment. A supplier who is the creditor of the purchase price or the fee therefore, absent a choice of law, as a rule calculates interest under the law of its own state, including before a court in the debtor’s state. What decides is the particular contract, however: a choice of law is often contained in terms and conditions to which the customer’s order refers.
In a sale of goods between companies from Slovakia and Czechia, the Vienna Convention on Contracts for the International Sale of Goods, promulgated by Notification No. 160/1991 Coll., also applies (Article 1(1)(a)) unless the parties have excluded it. Its Article 78 confers a right to interest on late payment of the price, but does not fix the rate. On the prevailing interpretation, the rate is in this case likewise determined by the law applicable to the contract under the Rome I Regulation.
Slovak law
Where the contract is governed by Slovak law and the obligation is a commercial one, interest arises directly by operation of law and need not be agreed in advance or announced:
Where a debtor is in default in performing a pecuniary obligation or part of it, a creditor who has performed its statutory and contractual duties is entitled to demand from the unpaid amount default interest at the rate agreed in the contract, without any need for a separate notice.
— Section 369(1) of the Commercial Code (unofficial English translation)
If the parties have not agreed a rate, Government Regulation No. 21/2013 Coll. applies. The rate equals the base interest rate of the European Central Bank in force on the first day of the relevant calendar half-year of the default, increased by eight percentage points (Section 1(1)). The creditor may instead opt for a fixed rate, being the ECB rate in force on the first day of default increased by nine points, which applies throughout the period of default (Section 1(2)). Alongside the interest there is fixed sum compensation for the costs associated with asserting the claim of EUR 40, payable once, regardless of the length of the default (Section 2 in conjunction with Section 369c(1) of the Commercial Code). The details of the Slovak rules are discussed in the question on what default interest can be claimed.
Czech law
The Czech Civil Code confers on a creditor who has duly performed its own duties a right to default interest on a pecuniary debt, unless the debtor is not responsible for the default, and refers the rate to a government regulation where the parties have not agreed it (Section 1970 of Act No. 89/2012 Coll.). Under Section 2(1) of Government Regulation No. 351/2013 Coll., the annual rate corresponds to the repo rate of the Czech National Bank applicable for the first day of the calendar half-year in which the default arose, increased by eight percentage points. Unlike the Slovak approach under Section 1(1) of Government Regulation No. 21/2013 Coll., where the rate changes with each half-year of default, the Czech rate is therefore determined by the half-year in which the default began and is not recalculated during the default.
Between entrepreneurs, the costs associated with asserting the claim are added to the interest. Their minimum amount is CZK 1 200 for each claim (Section 3 of Government Regulation No. 351/2013 Coll.), so where several invoices are unpaid they are counted for each of them.
What this means for the demand and the action
Interest and costs must be calculated under the correct law already in the demand for payment, because the demand later becomes the basis of the application to the court. A creditor who, absent a choice of law, calculates the rate under the law of the debtor’s state risks the court refusing the difference or, conversely, loses part of the claim. Where the claim is brought before a Czech court, the demand also has procedural significance: under Section 142a of Act No. 99/1963 Coll., a successful claimant is as a rule entitled to costs only if it sent the defendant a demand for performance at least 7 days before filing. If you are unsure whether an invoice can still be sued upon, see the article on limitation of invoices between a Slovak and a Czech company.
We will calculate the principal, interest and costs under the applicable law and assert them against a Czech debtor under debt recovery in the Czech Republic, and against a Slovak debtor under debt recovery in Slovakia. Simply send the invoices, the contract or order together with the terms and conditions, and a summary of payments made to date.
This answer provides general information on the law as at 12 September 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
