The French government declared illegal cash payments above a ceiling of €1,000 per transaction for individuals resident in the country, affecting volumes of commercial payments (linked to professional activities) and the collection of taxes by the tax authorities.
Likewise, the limit for non-residents (mainly tourists) increases to €15,000.
Outside the demanding margins established by the cash limit, users are forced to resort to alternative means of payment such as bank cards and checks.
Non-business transactions between consumers are not subject to cash regulation.
Still, when payments of more than €1,500 are recorded, the parties must issue an invoice certifying to the State that a transaction has occurred.
The new measures are in addition to others that already exist regarding the use of cash.
For example, paying taxes or fees in local jurisdictions maintains a cash limit of up to €300 per transaction, beyond which other non-cash means of payment are required to be used.
This limit operates to settle income tax, VAT, municipal fees, audiovisual license fees, etc.
Emmanuel Macron’s administration is preparing to strengthen state monitoring of transactions, which is extremely difficult for cash payments.
The restrictions will come into effect as of next September.
The ruling party defended the measures as part of the “fight against terrorism and the laundering of illicit capital”.
However, many of these illegal operations (the vast majority) manage much larger funds than the limits to which the measure refers.
Focusing on retail transactions has led many to believe that the real intentions are to strengthen tax collection (the control of small amounts of tax evasion) and to pave the way for implementing an eventual state digital currency in the future.
On the other hand, although inflation in France eased slightly in March 2023 and fell to 5.6% year-on-year, it remains the highest in 37 years and will act as a pressure factor to push commercial and fiscal transactions toward the use of bank cards or checks from September onwards.
The deterioration of the purchasing power of money at the most drastic pace in the last four decades will lead to the progressive erosion of the limits imposed by Macron if no adjustment clauses are added for the evolution of the CPI.
With information from La Derecha Diario