The European Union (EU) is squeezing control over cash payments with the objective of waging practices such as capital bleaching, tax fraud and terrorism financing. With the new regulation (EU) 2024/1624, it is intended to standardize the maximum cash payment limits in all Member States by 2027.
Cash payments now have a limit
The European regulation sets a common ceiling of 10,000 euros for cash payments. Above this amount, it will be mandatory to use payment means to track the operation, such as bank transfers or card payments, says Marketeer.
Despite this uniformity at European level, each country may choose to apply more restrictive limits, provided below 10,000 euros defined by the EU.
This margin allows you to adjust the rules to the specific realities of each Member State.
Objective is to reduce the risk of illegal operations
According to the official statement, cited by the same source, the intention of the measure is to reduce the risks associated with high cash payments, especially in contexts where fraud, bleaching or financing of illicit activities is suspected.
The directive has been in force since 2015 reinforces this guidance by considering as entities required all persons or companies that make or receive cash payments above 10,000 euros.
These limits also seek to determine the use of large cash amounts in sectors such as the trade of luxury goods, where operations can escape more easily to control the tax and judicial authorities.
Limits already exist in Portugal
In Portugal, national legislation already provides much tighter limits. In the case of cash transactions between residents, it is not allowed to pay or receive amounts equal to or more than 3,000 euros.
This limit is reduced to 1,000 euros when it comes to companies or professionals with organized accounting, including IRC and IRS passive subjects under these conditions.
On the other hand, for unique people who do not reside in Portugal and do not act as entrepreneurs or traders, it is allowed to pay up to 10,000 euros, according to the same source. This exception applies, for example, to foreign tourists or citizens visiting the country, provided that the transaction does not involve regular commercial activity.
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Also tax with specific limit
In addition to the limits applicable to private or business transactions, payments to the state also have their own rules. It is prohibited to settle taxes in cash when the value exceeds 500 euros. This measure aims to ensure greater security and transparency in the relationship between the taxpayer and the tax administration.
Reinforced border control
The new European regulation also includes rules for transporting money inside and outside the EU. Travelers who enter or leave the community space with amounts equal to or greater than 10,000 euros in cash are required to declare this amount to the competent authorities, according to.
This control applies to trips by air, terrestrial or maritime and is intended to make it difficult to transport money obtained illicitly. Those who do not declare the values in question can see the money seized, besides being the target of administrative or criminal proceedings, depending on the cases.
On the way to greater transparency
With these measures, the EU intends to reinforce the fight against economic and financial crimes, promoting more transparent and safe practices in monetary transactions.
By limiting the use of physical money in large operations, authorities seek to cut traditional funds flow routes illegally.
In the coming years, Member States will have to adapt their national legislation to this new European framework, with deadlines established by 2027 to apply the definitive changes.
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