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Cash payments, new limitations: Who is affected?

A new law regarding the limitation of cash payments will come into force in May. It is the Law 70/2015, issued on the 2nd of April that will apply 30 days after its publication in the Official Gazette.

Currently, cash payments are regulated by Government Ordinance no. 15/1996.

What’s new ?

Limitations will be introduced for the following cash transactions:

• Receipts and payments made by other operators than legal persons, namely: freelance professions, family enterprises, individual enterprises, self-employed individuals and other entities with or without legal personality;
• Receipts and payments carried out between traders and individuals, representing the delivery of goods and rendering of services, dividends, assignment of receivables, loans and other forms of financing;
• Receipts and payments between individuals.

Currently, the Government Ordinance no. 15/1996 imposes only daily limits for cash payments between legal persons, of:

• 10,000 lei / day – payments to legal entities
• 5,000 lei / day – payment to the same supplier
• 10,000 lei / day -payment to cash & carry stores

Law 70/2015 imposes limits also to:

• operations performed by legal persons, freelance professions, individual enterprises, family enterprises, individuals who operate independently, associations and other entities with or without legal personality :
• receipts of 5.000 lei / day for one person
• receipts of cash & carry stores of 10,000 lei from one person;
• payments of 5,000 lei / person, but not more than 10,000 lei / day;
• payments of 10,000 lei to cash & carry stores;
• payments in advance for settlement of 5,000 lei daily for each person

Limits for individuals

Cash receipts and payments between individuals are limited to 50,000 lei / transaction. Fragmented cash receipts and payments for larger transactions are forbidden. There are exempted the receipts and payments made through institutions providing payment services authorized by the Romanian central bank or authorized in another Member State and notified to the EU central bank, that are made due to the transfer of ownership of property or rights or the provision of services, and those representing the grant / loan repayment. Cash receipts from individuals, representing the assignment of receivables, loans or other financing and the equivalent of delivery of goods or of rendering of services are limited daily to 10,000 lei from one person.

Cash payments to individuals, representing the value of purchases of goods or services, dividends, assignment or other rights and refunds of loans or other financing are limited to 10,000 lei daily for one person.

Fragmented cash payments are forbidden for transactions exceeding 10,000 lei.

Fragmented payments are not forbidden for contracts in installments.

Attention: The ceilings are also applied to receipts / payments in foreign currency. Compliance with limits is based on the exchange rate announced by the NBR on the date of transactions

Prohibitions:

Fragmented payments and receipts will be forbidden, as follows:

• Fragmented receipts for bills over 5,000 lei and respectively 10,000 lei to cash & carry stores
• Fragmented invoices for delivery of goods or the provision of services over 5,000 lei and over 10,000 lei to cash & carry stores
• Fragmented cash payments to suppliers of goods and services for bills over 5,000 lei and respectively 10,000 lei to cash & carry stores
• Fragmented receipts from a person over 10,000 lei
• Fragmentation of the transactions representing assignment of receivables, loans or other financing, respectively the fragmentation of the delivery of goods or rendering of services over 10,000 lei.

Increasing of the sanctions

Currently, the fines for exceeding the limits are from 5000 to 10000 lei. According to Law 70/2015, the fines will increase to 10% of the amount paid / received that exceeds the limits, but not less than 100 lei.