THE CASH YOU MAY NO LONGER USE - Cy Mail 14/6
From July 1 cash can no longer be used to pay rent – supposedly to crack down on tax evasion, it’s another step on the road to a cashless society
From next month, a category of ordinary, lawful payment between two consenting adults becomes illegal to settle in cash in Cyprus. That category is rent. The change is arriving with very little public debate, and almost none of it concerns the principle at stake.
The 2026 Tax Reform inserted Article 48A into the Collection and Assessment of Taxes Law (N.4/1978), with effect from July 1, 2026. The text leaves no room for interpretation. Article 48A(1) provides that rent in respect of immovable property within the Republic shall be paid exclusively by bank transfer, debit or credit card, or any other recognised electronic means. Article 48A(2) goes further, addressing the recipient: every person entitled to rent shall not accept it by any other method.
Two features of that text deserve to be read slowly.
The first is that there is no monetary threshold. The Tax Department’s own notice confirms that the obligation applies to all natural and legal persons regardless of the amount of rent and the type of use of the property. There is no exemption for small sums, short tenancies, informal family arrangements, or the elderly tenant who has handed an envelope to the same landlord for 40 years. Every rent, however small, must now move through a regulated electronic channel.
The second is that the prohibition binds both sides. The tenant must pay electronically; the landlord is barred from accepting cash even if both would freely prefer it. The law does not regulate a payment. It removes a choice both parties might wish to make. A business that pays rent in cash also loses the deductibility of that expense under the new paragraph (1A)(iii) of Article 9 of the Income Tax Law, so the cost of non-compliance is written into the tax code as well as the collection law.
I want to be precise about what I am and am not saying. The policy rationale is neither mysterious nor disreputable: rent is a notoriously under-declared source of income, forcing it through traceable channels closes that gap, and a state is entitled to the tax it is owed. I do not dispute the aim. What I question is the form the measure has taken, and the absence of any public argument about that form.
There is a difference between requiring that a payment be declared and requiring that it be made in a particular way. The state could always tax rental income, demand records, audit and compel disclosure by court order – none of which required prohibiting cash. The new article does not say “declare your rent”. The obligation to declare income already existed. It says, in effect, that an entire class of lawful payment may no longer take a particular lawful form, and that the recipient commits a breach by accepting it. That is a different kind of rule, and it ought to have been defended as such, in public, before it was enacted.
The measure does not stand alone. At EU level, the Anti-Money-Laundering Regulation (AML) will from July 10, 2027 prohibit cash payments above €10,000 in professional transactions, a ceiling Cyprus legislated ahead of time. In Greece, a bill now before Parliament would require every transaction of €500 or more to be settled electronically, measured against the whole transaction rather than the receipt, to stop bills being split into smaller cash portions. The direction runs one way only: the set of payments the public may lawfully make in cash is being narrowed, category by category and amount by amount.
What is distinctive about Article 48A is that it carries no threshold at all. The AML cap concerns large, professional dealings, where the case for traceability is strongest. The Greek bill is itself a marked step, pulling the electronic-payment line down to €500 across ordinary transactions and tightening enforcement besides. Yet even it preserves a floor, an amount beneath which cash remains lawful. The Cypriot rent rule preserves none. It reaches the €100 room in a shared flat as fully as the €5,000 commercial lease. A measure that begins where the AML logic is weakest – in small, routine, person-to-person payments – is more significant than its modest presentation suggests.
There is a constitutional dimension that was never aired. The freedom to transact in legal tender is no trivial liberty. Euro banknotes and coins are, under EU law, the only money carrying legal-tender status, and the ability to discharge a debt with them has historically been close to absolute. A law that forbids their use for an entire category of everyday obligation, and penalises whoever accepts them, narrows that freedom in a way that deserved a debate in the House of Representatives about proportionality and necessity. Whether the measure would survive such scrutiny is a fair question, and one that was not asked.
None of this is an argument for tax evasion. It is an argument that the manner in which the state pursues a legitimate aim is itself a matter of public interest, and that quietly converting a tax-compliance objective into an outright prohibition on a form of payment is exactly the change that ought to be argued openly rather than slipped into a reform package and announced by departmental notice.
Article 48A does not stand on its own. It is one stone in a larger structure now being assembled, the keystone of which – the digital euro, due to begin issuance later this decade – I will turn to in a later article. The rent rule is the part of that structure already on the statute book, and the part that will be felt first. It is, for that reason, the right place to begin asking the question the whole structure raises: where, and at what amount, will a resident of this country still be free to pay in cash?
The narrower point is this. A citizen of the Republic may soon find that, for one of the largest and most regular payments they make, the option of cash has simply been withdrawn, and that the person who would have accepted it is forbidden by law from doing so. That may be good policy. But it is a decision about the relationship between the citizen and the state, not a technical adjustment to the tax code, and it should have been treated as one.
If it is sound, it can be defended in those terms. If it cannot be defended in those terms, that tells us something too.
Andreas Shialaros is a lawyer based in Cyprus
