Cash payments continue to be used in many everyday purchases, but the European Union (EU) is preparing a common rule to limit the use of cash in high-value commercial transactions. The measure is part of the new European package to combat money laundering and terrorist financing.
New European ceiling for cash payments
From July 10, 2027, purchases of goods or services with a value equal to or greater than 10 thousand euros will no longer be able to be paid in cash in the EU, whenever at least one of the parties acts as a professional or company.
This change is contained in Regulation (EU) 2024/1624, published in the Official Journal of the EU in June 2024, within the scope of the new European framework to prevent the use of the financial system for illicit purposes. He explained, even during the legislative process, that the objective is to create a common maximum limit across the EU, avoiding very large differences between Member States.
In practice, Brussels sets a common maximum limit of 10 thousand euros for payments in cash, but does not prevent Member States from maintaining or approving lower ceilings. In Portugal, for example, there are already tighter national limits, of 3 thousand euros, for certain cash transactions.
Entry into force
Although the European regulation has already been approved, the practical application of this rule is scheduled for July 10th of next year. Until then, a period of adaptation continues for the Member States and economic operators covered.
This calendar is important because it eliminates the idea of an immediate ban on cash. The decision has already been taken at European level, but the mandatory effects will only arrive in the summer of 2027.
Changes to purchases and services
The central point of the new rule is in commercial operations. Anyone who sells goods or provides services will only be able to accept or make payments in cash below R$10,000, when the transaction is linked to a professional or business activity.
Furthermore, the new European package also reinforces control duties in occasional cash transactions between 3,000 and 10,000 euros, imposing identification and identity verification in certain situations on the part of obliged entities.
Operations between individuals are left out
The new limitation does not mean the end of physical money. The European framework excludes payments between individuals who are not acting in the exercise of a professional activity, which leaves out strictly private transactions between individuals.
Still, the logic of the measure is clear: the higher the value of the transaction and the more professional the context of the transaction, the greater the payment traceability should be.
Reasons given by the EU for limiting cash
According to the Council of the European Union, the objective is to make it difficult to use large amounts of money in money laundering and terrorist financing schemes. Cash is seen by European institutions as a more difficult means of payment to track when compared to banking or electronic solutions.
By harmonizing rules, the EU aims to reduce differences between national legislation and prevent suspicious operations from being moved to countries with more permissive limits. The existence of a common ceiling thus seeks to reinforce transparency in the internal market.
Impact may vary from country to country
The concrete effect of this measure will not be the same across the EU. In countries where low limits for cash payments are already in force, as is the case in Portugal in several situations, the change may be less felt.
In Member States where the use of cash in large amounts remained freer, adaptation may be more visible, especially in commerce and services sectors where high-value payments are still common.
Essentially, the EU will not ban the use of cash in everyday life. From July 10, 2027, what comes into existence is a common rule that closes the door to commercial payments of 10 thousand euros or more made in cash, without prejudice to lower national limits.
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