The European Union (EU) will come forward with a new common rule to limit cash payments in commercial transactions, a measure that will come into effect on July 10, 2027. From that date onwards, purchases of goods or provision of services worth 10 thousand euros or more will no longer be able to be paid in cash whenever at least one of the parties acts as a professional or company.
New European ceiling for cash payments
The change results from Regulation (EU) 2024/1624, approved within the scope of the new European package to combat money laundering and terrorist financing.
He explained, even during the legislative process, that the objective is to create a common maximum limit throughout the EU, avoiding too large differences between Member States.
In practice, the regulation sets a European ceiling of 10,000 euros for cash payments and allows each Member State to maintain or approve even lower limits if it so wishes. In other words, Brussels defines a common maximum, but does not prevent the existence of stricter national rules.
Entry into force
Although the regulation has already been approved and published in the Official Gazette of the Union in June 2024, the application of these rules is scheduled for July 10th of next year. Until that date, there remains a period of adaptation for Member States and economic operators covered.
This calendar is relevant because it eliminates the idea of an immediate ban on the use of cash. The change has already been decided at European level, but its practical effects will only become mandatory in the summer of 2027.
Changes to purchases and services
The central point of the new rule is payments associated with the purchase of goods or the provision of services. According to the text of the regulation, people or entities that sell goods or provide services will only be able to accept or make payments in cash if the value is less than R$10,000. From this amount onwards, it will be necessary to use payment methods with a documentary trail.
Furthermore, the political agreement that gave rise to the regulation already provided for a reinforcement of control over occasional cash transactions between 3,000 and 10,000 euros, imposing identification and identity verification in certain cases on the part of obliged entities.
Operations between individuals are left out
The new limitation does not mean the disappearance of cash. The European framework itself leaves out transactions between individuals who do not act in a professional context, which means that the rule does not apply in the same way to strictly private transactions between individuals.
Still, the logic of the regulation is clear: the higher the value and the more professional the operation, the greater the traceability of the payment. It is precisely this philosophy that explains the imposition of the common ceiling on higher value commercial transactions.
Reasons given by the EU for limiting cash
According to the EU Council, this European limit aims to make it difficult to use large amounts of cash in money laundering schemes. European institutions consider that money remains an especially sensitive medium when the objective is to conceal the origin or destination of certain funds.
By harmonizing the rules, Brussels aims to reduce gaps between national legislation and reinforce transparency in the internal market. The idea is simple: if there is a common limit, it becomes more difficult to move suspicious operations to countries with more permissive rules.
Impact may vary from country to country
The concrete effect of this measure will not be the same across the EU. In countries that already had low limits for cash payments, the change may be reduced.
In States where the use of cash remained freer, adaptation may be more visible, especially in certain sectors of commerce and services. This reading results from the harmonization logic adopted by the Council and the European regulation.
Essentially, the EU is not banning the use of cash in general, but rather closing the door on high-value commercial payments made in cash without formal registration. From July 10, 2027, this will become the new common standard throughout Europe.
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