Cash Payment Limit: Latest News 2023

Cash payment limit: Initiatives to reduce use

In recent years, the cash payment limit has become a much-discussed topic and has undergone several changes. In the past, it was possible to pay in cash without limits, but in recent years limitations have been introduced to combat tax evasion.

In 2001, for example, the cash payment limit was 10,000 euros, while it had been reduced over the years and a proposed limit of 1,000 euros had been reached. The 2023 Budget Law then increased the cash payment limit to 5,000 euros, instead of reducing it to 1,000 euros as initially planned. This represents a significant increase compared to the current cash payment limit of 2,000 euros.
This case does not change anything compared to the large expenses that companies or end users have to face (think of a house, car or business machinery), which would still require a much larger investment and consequently traceable payment instruments, such as bank transfers, credit cards, loans.

The “count limit” issue

Regarding the importance and attention that public opinion and the political debate reserve towards the «cash limit» issue, it is important to point out that there are cultural, fiscal and bureaucratic reasons impacted by the use of cash and non-cash. Obviously, the issue of tax evasion emerges first and foremost, which encounters almost insurmountable obstacles when using traceable payment instruments. Tax evasion has negative repercussions on tax revenue and is often pointed out by politicians as an obstacle to reforms, to the opening of large construction sites and to the possibility of making impactful reforms.

In addition to the fiscal aspect, there are also other practical reasons, linked to everyone’s daily activity and which are often underestimated, for which the use of traceable payment instruments tends to be recommended. For example, these tools offer greater security guarantees, since payments can be traced in case of fraud or problems with the seller.

Furthermore, regarding the cultural issue, there is a certain adversity both on the part of merchants and on the part of the end user, to having to incur costs for the acceptance or execution of a payment. Think about credit card payment acceptance rates or the cost of making a bank transfer.

Electronic payments

With regard to electronic payments, however, the rules introduced also due to the COVID period regarding the obligation to accept, by merchants of various kinds, payments with electronic instruments remain valid. In this case, the minimum limit foreseen in the past is eliminated, effectively making the consumer free to impose the preferred payment method.

In conclusion, the increase made to the limit of cash payments in 2023 is a case in contrast to the Italian and international trend. Furthermore, since it is yet another revision that has taken place in recent years, we think it is plausible to foresee further developments in the near future.