Permitted Cash Business Payment Limits to be lowered in Poland

On 15 January 2017 new legal provisions were introduced in Poland according to which the maximum limit of cash business transactions  was dramatically  reduced from 15 000 Euros to 15 000 PLN[1] (approx. 3700 Euros). These recent changes were  inserted into the Polish Act on Freedom of Providing Business Activities and as a result, entrepreneurs will only be able to make or receive a cash payment totaling a maximum of 15 000 PLN and could be penalized if they exceed this  amount in cash within any one business deal. So far the aforementioned  Act stated that payments wired  between entrepreneurs via their bank  accounts were compulsory  in the  event of transfers of  amounts exceeding  15 000 Euros. The recent changes – pursuant to the Polish legislator  – strongly  aim to reduce the grey market in Poland. Transactions made in foreign currency will be converted into Polish currency „PLN” according to the average rate of exchange rate  set by the Polish National Bank published  on the working day  prior to the day of making the transaction. The new provisions also bring some changes with regard to the settlement of all payments over 15 000 PLN, so therefore if an entrepreneur will comply with the new regulations and make payments over 15 000 PLN in the form of bank transfers, then he/she will also be allowed to settle these payments as tax deduction  taking advantage of this new payment system. It remains unclear as to why the Polish legislator limits cash business payments up to 15 000 PLN and how these new rules will be enforced in daily business life.

 

 

By Dr Robert Lewandowski

Lawyer  with Derra, Meyer & Partners in their Warsaw office

 

[1] PLN refers to Polish currency „Złoty”