Reduction of the limit for the execution of business transactions with cash

In order to restrict the shadow economy, the legislature has significantly reduced the legally permissible limit for the execution of business transactions with cash in this year. Until now cash transactions with an equivalent value of up to 15,000.00 EUR were possible, the limit is now only maximum 15,000.00 PLN (about 3,500 EUR).

The reduction of the limit serves, in particular, to curb the widespread practice among Polish companies, purchases without invoice with cash payment in order to escape the tax obligations, in particular with regard to turnover tax. Therefore, with the reduction of the limit, the PiS government has now enforced a regulation, which has been discussed in Poland for more than ten year and has been blocked by the interests of some economic associations with pseudo-arguments, that many companies do not have bank accounts, the bank’s branch network is too thin or the bank charges would be too great a financial burden for the companies.

In order to enforce the lower cash limit, the legislature has enacted the rule that commercial transactions with a value of more than 15,000.00 PLN carried out with cash are not recognised by the tax office as a cost to earn income.

In the opinion of the Ministry of Finance, the effect of the downgrade of the cash limit is expected to result in a sum of 2 billion PLN to the state.

Source: „Wirtschafts-Markt Polen“, Ausgabe 238