The European Union will have a common limit for large cash payments starting July 10, 2027. From that date onward, those who trade in goods or provide services will not be able to accept or make cash payments exceeding €10,000, whether the amount is paid in a single transaction or divided into several related transactions.
This measure is part of Regulation (EU) 2024/1624, which is a key component of the new European framework against money laundering and the financing of terrorism. Its aim is to establish common rules among member states and to increase the traceability of certain economic transactions. Until now, national limits on cash use have shown significant differences within the Union.
However, the figure of €10,000 may generate some confusion in Spain. The new regulation sets a European maximum but expressly allows member states to maintain or approve lower limits. Therefore, the entry into force of the EU regulation will not mean that Spain can conduct cash payments of up to €10,000 in commercial transactions.
In Spain, the limit of €1,000 will continue to apply
Spanish legislation is currently much more restrictive. Since the coming into effect of Law 11/2021, cash payments are not allowed for transactions amounting to €1,000 or more when either party acts as a business or professional.
The rule affects, for example, purchases made at a store, the payment for certain professional services, or any other transaction that reaches that amount involving a business or professional.
It also prevents circumventing the limit by artificially splitting the payment. To calculate the amount, the values of all transactions or payments that could be divided from the same delivery of goods or provision of services must be summed up.
The European Regulation addresses this situation. Its Article 80 permits member states to set lower limits than €10,000 and determines that existing limits will continue to apply. Consequently, the Spanish maximum of €1,000 is not replaced by the new European limit.
Additionally, there is an exception in Spanish law for certain foreign visitors. When the payer is an individual who can justify that they do not have their tax residence in Spain and is not acting as a business or professional, the limit currently stands at €10,000.
What about payments between individuals?
Another important difference is found in transactions conducted exclusively between individuals. The European limit of €10,000 is intended for cash payments in exchange for goods or services within a commercial or professional activity and establishes certain exceptions.
The Spanish law of €1,000 does not generally apply to a transaction in which neither party acts as a business or professional.
This means that the limit applicable to a purchase in a store should not be confused with any transfer of money between two citizens. The nature of the transaction and the status of those making the payment are crucial for determining which regulation applies.
There should also be no confusion between the limits for cash payments and the rules governing the physical movement of money. In Spain, there are specific reporting obligations for entering or leaving the country with certain amounts of cash and for movements within the national territory, but this is a different regulation.
A European regulation against money laundering
The limitation on cash payments is only one part of Regulation 2024/1624. The regulation expands and harmonizes anti-money laundering obligations for financial entities and certain professionals and economic activities.
Among the affected sectors are credit institutions, auditors, tax advisors, notaries, lawyers in certain operations, real estate agents, and merchants of certain high-value goods, among others.
Obligated entities must apply procedures to identify their clients and ultimate beneficial owners, assess risks, understand the purpose of certain business relationships, and report suspicious transactions to the relevant financial intelligence units.
The regulation also includes new sectors. Certain activities related to football clubs and agents will fall under the European framework, although in their case, application is generally anticipated to begin on July 10, 2029.
The change will be greater in other European countries
The practical effect of the new limitation will depend on the legislation currently in place in each member state. In those countries where large cash payments above €10,000 are permissible, the European regulation will represent a direct restriction. No state will be able to set a limit higher than the EU maximum for transactions covered by the regulation.
Spain finds itself in a different situation because it already has significantly more restrictive regulations for transactions involving businesses or professionals.
Thus, for Spanish consumers and companies, the arrival of the new European limit in July 2027 will not mean transitioning from the current €1,000 to €10,000. The €10,000 will be the common ceiling of the European Union; Spain will be able to maintain its own limit of €1,000 for the commercial transactions currently subject to it.
