Your supplier requests payment while you believe they owe you money. Offsetting may seem logical. Legal set-off, however, requires more than two amounts in a spreadsheet. Check the creditors on each side, whether your claim is enforceable and the contract's provisions. A business lawyer can help with disputed damages, a set-off prohibition or proceedings claiming payment. This guide concerns business set-off under Dutch law; tax set-off, wages and insolvency raise separate issues.
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1. Prepare two complete claim records
For both amounts, record creditor, debtor, basis, size and payment date. Do not group invoices and credit notes merely by trading name. A holding, operating company and director are separate parties. Check contracts and bank recipients, remembering that the account name does not always independently establish legal entitlement.
A recent Noord-Holland District Court judgment discusses Article 6:127 of the Dutch Civil Code's requirements of similar obligations, the same opposing party and authority to pay and enforce the counterclaim. This creates no automatic right to offset claims throughout a group. Examine any alleged exception or group arrangement specifically. Common ownership alone does not answer the question.
2. Investigate whether your counterclaim exists and is enforceable
Distinguish an existing invoice, damages still to be quantified and a future penalty. Collect evidence of liability and amount. Your own damages schedule alone creates no enforceable claim. Identify what the other party accepts and disputes with reasons. A disagreement about amount may require a different approach from a claim not yet arising at all.
Also check whether payment of your own debt is possible and conditions attached to your claim. A future receipt or expected decision is not necessarily the same counterclaim as an amount already due. Ask the lawyer to establish the legal sequence before accounting reduces the entire supplier balance to zero. Keep original entries visible while assessment continues.
3. Read contractual set-off arrangements
Parties may agree set-off provisions. Find any prohibition, restriction or extension in the contract and applicable terms. Check how those terms became part of the agreement. A clause in an unaccepted draft requires different assessment from one in a signed settlement. Read later amendments and arrangements involving other group companies too.
A Rotterdam District Court judgment concerns a contractual clause departing from the statutory mutuality requirement. This does not mean every group has such an arrangement or every wording has the same effect. Establish who is bound and which claims it covers. Do not reproduce the other party's clause in isolation in your letter without having the remaining terms assessed.
4. Distinguish set-off, suspension and a credit note
With set-off, debt and counterclaim cancel each other to their common amount if conditions are satisfied. Suspension concerns temporarily withholding performance and does not extinguish the obligation in the same way. A credit note may reflect a billing adjustment. Ask which action you actually intend and the appropriate legal basis.
A defect complaint therefore does not automatically mean a definitive price reduction. Repair or damages may first require investigation. Do not use three different terms for the same amount without explanation. This leaves the other party and later the court uncertain whether you defer payment, dispute the invoice or invoke your own money claim.
5. Make a demonstrable set-off declaration
Article 6:127 of the Dutch Civil Code links set-off to a declaration by the authorised debtor to the creditor. Clearly identify the correct claims and intended amount. An internal entry without communication differs from a clear declaration. Keep the text sent, attachments and receipt details. If uncertain, assess when the declaration takes effect and what remains thereafter.
Avoid unnecessarily acknowledging all original liability. Your lawyer can distinguish a primary defence from an additional reliance on set-off. Agree how the remaining balance, interest and later invoices are processed. A useful letter makes the calculation verifiable but does not groundlessly promise that both parties' dispute has ended.
6. Consider payment proceedings
A set-off defence does not automatically prevent a payment order. Article 6:136 of the Dutch Civil Code allows the court, under conditions, to award the payment claim where the merits of set-off cannot easily be established. A Gelderland District Court judgment illustrates the distinction. Substantive assessment of your counterclaim and handling of the invoice may consequently diverge.
Provide your lawyer with complete supporting evidence early. Ask whether your own claim in proceedings is necessary or appropriate and its costs. Monitor the summons date independently of your earlier set-off letter. Simply asserting everything was offset does not safely replace a formal procedural defence if the other party starts proceedings anyway.
7. Fictional example: damages against the wrong group company
A purchaser receives an invoice from an operating company. They want to deduct losses allegedly caused by another company in the same group. Both businesses use the same brand. This fictional example establishes neither liability nor absence of a group arrangement.
Preparation begins by identifying contracting parties and alleged loss. Next examine whether a valid wider set-off agreement exists. The purchaser also checks whether the damages claim is already enforceable. Only then can a focused declaration or other defence be prepared. Branding on a letterhead may show commercial connections but does not replace examination of mutuality and agreements.
8. Give your lawyer a defined engagement
Supply both claim records, contracts, terms and complete correspondence. Identify whether your aim is reducing payment, temporarily deferring it or recovering your own claim. Ask what step is needed before a received deadline and who performs it. An accountant can reconcile figures; legal availability of set-off deserves separate assessment.
After advice, retain original amounts alongside the chosen set-off. Record outstanding disputes and who checks receipt of the declaration. Report changes such as assignment of a claim or threatened bankruptcy immediately. This guide provides no general solution for those special situations and no guarantee a counterclaim neutralises an ongoing payment claim.
Frequently asked questions
May I set off an invoice against a claim on a sister company?
Not merely because both belong to the same group. Examine whether the opposing party is the same and whether a valid wider contractual arrangement exists.
Is an accounting entry alone sufficient?
The statutory scheme requires a declaration to the creditor. Have its content, addressing and demonstrability assessed.
Do proceedings stop because of my set-off defence?
Not automatically. Under Article 6:136's conditions, the court may award a payment claim despite the defence. Assess your procedural position promptly.
Sources
These sources relate to this page. For a specific case, check current rules and your own documents.
- Rechtbank Noord-Holland — ECLI:NL:RBNHO:2026:4561 Accessed: 2026-10-23
- Rechtbank Rotterdam — ECLI:NL:RBROT:2021:11560 Accessed: 2026-10-23
- Rechtbank Gelderland — ECLI:NL:RBGEL:2026:6552 Accessed: 2026-10-23
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Editorial team Business law in the Netherlands
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