The Armenian Parliament passed a bill setting amendments to the law “On non-cash payments” and a number of related laws. Under new changes, all transactions exceeding AMD 300,000 (approx. USD 700) made by individuals in Armenia are to be carried out noncash.
The regulations apply to payments for goods, sale, and purchase of property, use of goods, execution of work, provision of services, payment of salaries, etc. There are certain areas where the threshold is zero, such as budgetary receipts and payments, health care, education and legal services. For transactions, requiring state registration of rights, the threshold is 500,000 AMD.
For some payments, the regulations will come into force – in 2022 for the capital Yerevan, and in 2023 for provincial towns, and in 2024 throughout Armenia. In case of non-compliance with the requirements, the contract will be considered invalid․
According to officials, the AMD 300,000 threshold was chosen based on the results of studies and the actual volume of transactions. It is also noted that the transition to cashless payments is part of a plan to shift to a digital economy.
Armenia is not the only country in the world with cash payment limits.
- In France, cash payment limits are based on residency. Cash payment limits for residents are EUR 3,000 and for non-residents acting as consumers, is EUR 15,000.
- In the UK the consumers can make cash payments without any limits. The traders, however, need to register themselves with tax authorities as “High-Value Dealers” if accepting cash payments over EUR 15,000.
- Bulgarian regulations limit cash transactions up to 10,000 leva (approx. EUR 5,112). If the transaction is over that limit, then the payment should be made by bank transfer. The same applies also in any case where the purchase price is over EUR 5,112, and payment is made in parts.
- Spain, since November 2012, the limit is EUR 2,500 for residents and EUR 15,000 for non–residents. If the amount is higher, the payment should be done by bank. Failure to follow this precept might result in a fine of up to 25% of the total transferred amount.
In respect of regulations in Armenia, it should also be highlighted that the above-mentioned regulations are far too broad to cover all possible scenarios, necessitating a more precise approach in each circumstance. However, one thing is certain; they will create and promote a new non-cash payment culture in Armenia.