As reported by Banco de Portugal, the general rule bans payments or receipts involving amounts above €3,000, meaning even a transaction of that quantity cannot be settled entirely in cash.

The restriction applies to both the person making the payment and the person receiving it, and splitting the purchase into several instalments does not circumvent the rules, as payments linked to the same sale or service are added together.

Business threshold

These stricter rules apply to companies and self-employed individuals who are subject to corporate income tax, as well as those subject to personal income tax who are required to keep organised accounts.

Where an invoice or equivalent document is worth €1,000 or more, payment must be made using a method that identifies the recipient.

Under the legislation, acceptable methods include bank transfers, named cheques, and direct debits, which aim to ensure a traceable record of who received the money.

Foreign resident limit

There is an exception for individuals who are not resident in Portugal.

A non-resident private individual who is not acting as a business owner or trader can make cash payments of up to €9,999.99, with the restriction applying from €10,000 upwards.

This exception does not apply to companies or foreign professionals making payments as part of their business activities, as payments connected to the same transaction are also counted together.

Tax payments

When paying taxes, cash restrictions become even tighter.

According to Banco de Portugal, the law prohibits cash payments of tax liabilities above €500, and legal entities must use electronic payment methods for those and other amounts collected by the Portuguese Tax and Customs Authority.

However, exemptions from the general cash restrictions exist, including certain transactions with authorised financial institutions, such as banks and payment service providers, as well as payments resulting from court decisions or orders and situations covered by specific legislation.

EU cash ceiling

The rules are set to change across the European Union from 10 July 2027, when a new EU-wide limit on large cash transactions takes effect.

Under Regulation (EU) 2024/1624, businesses selling goods or providing services will generally be unable to make or accept cash payments of €10,000 or more, and the limit will apply whether the amount is paid in a single transaction or divided into several connected payments.

This EU measure is designed to reduce the risks of money laundering and terrorist financing associated with large cash transactions.

However, the introduction of the European ceiling does not mean Portugal will automatically raise its existing limits.

The EU rules allow member states to retain lower national thresholds.

Consequently, unless Portuguese legislation is changed, the country’s existing €3,000 general limit and €1,000 business threshold will remain in place.

The European restriction also does not cover private transactions between individuals where neither person is acting professionally. Nevertheless, national rules that are stricter than the EU ceiling can still apply.

For everyday purchases, cash remains perfectly legal, but when transactions involve thousands of euros, the law already requires consumers and businesses to use traceable payment methods in many circumstances.