Cash Invoice: Rules, Limits and Obligations

Cash payments are still common in business — from small material purchases to on-the-spot service payments. However, Czech law sets strict limits and rules for cash transactions. Exceed the 270,000 CZK limit and you face a fine of up to 5 million CZK. In this article, we'll explain everything you need to know as an OSVČ about cash invoices — from legal limits and proper documentation to practical tips for staying out of trouble.

What is a cash invoice

A cash invoice (sometimes referred to as an invoice with cash payment) is an invoice where the payment method is specified as cash. Unlike a standard invoice with a bank transfer, it has several distinct features:

• Payment takes place at the moment of handover of goods or delivery of a service
• The supplier must issue a cash receipt as proof that the cash was received
• It must comply with the legal limit for cash payments
• For VAT payers, transactions up to 10,000 CZK including VAT only require a simplified tax document (a receipt/till slip)

Cash invoice vs. standard invoice

The Act on the Restriction of Cash Payments

Act No. 254/2004 Coll. on the Restriction of Cash Payments sets out clear rules that you must follow as a business owner.

Who must comply with the law

The Act applies to all natural and legal persons — both business and non-business entities. It therefore covers:

• OSVČ (sole traders, freelancers)
• Business companies (s.r.o., a.s.)
• Private individuals (even for personal transactions above the limit)
• Foreign persons carrying out transactions on Czech territory

The 270,000 CZK limit: how it is calculated

Exemptions from the limit

The Act provides exemptions where the limit does not apply:

• Payments of taxes, fees and other similar budget contributions
• Mandatory payments arising from employment relationships (wages paid in cash — though this is rare today)
• Pension insurance payments
• Payments made during armed conflict on Czech territory or a natural disaster
• Payments involving money held in escrow by a court or notary
• Payments made pursuant to an enforcement order

Penalties for exceeding the limit

Breaching the Act on the Restriction of Cash Payments is an administrative offence and carries significant fines:

Importantly, penalties apply to both parties — both the person who made the cash payment and the person who received it. If you accept a cash payment from a customer exceeding 270,000 CZK, you are both breaking the law.

How to properly document a cash payment

Proper documentation of cash payments is essential for accounting records and in the event of a tax office inspection.

Cash receipt (PPD)

When receiving a cash payment, you must issue a cash receipt (příjmový pokladní doklad — PPD). This serves as proof that you actually received the money.

Cash payment voucher (VPD)

If you are the one paying in cash (e.g. buying materials), you issue a cash payment voucher (výdajový pokladní doklad — VPD). The required details are similar but from the opposite perspective — you are documenting cash leaving the till.

Cash book

All cash movements must be recorded in a cash book. This is a chronological log of all cash receipts and payments.

The cash book must contain:

• Date of the transaction
• Cash document number
• Description of the transaction (receipt/payment, purpose)
• Amount received or paid out
• Current cash balance

Cash invoices and VAT

If you are a VAT payer, the same rules apply to cash payments as to bank transfers — with one important difference.

Simplified tax document up to 10,000 CZK

For cash sales up to 10,000 CZK including VAT, you may issue a simplified tax document (a receipt or till slip) instead of a full invoice. This does not need to include the buyer's identification.

Full tax document above 10,000 CZK

For cash sales above 10,000 CZK including VAT, you must issue a full tax document (invoice) with all the details required under Section 29 of the VAT Act, including the customer's identification.

Tax point and the moment of taxation

For cash payments, the date of taxable supply (DUZP) is generally the same as the date of payment and the date of issue — everything happens at the same moment.

When cash payments are common in business

Despite the trend toward cashless payments, there are situations where cash remains practical:

Common situations for cash payment

• Small material purchases — screws at a hardware store, office supplies
• Tradespeople's services — plumber, electrician, painter for minor repairs
• Market stall sales — markets, farmers' markets, food festivals
• Personal services — hairdresser, massage therapist, beauty therapist
• Small retail — bakeries, small independent shops
• On-site services — courier, taxi, maintenance

When it's better to avoid cash

• Large orders above 50,000 CZK — for traceability and security
• B2B transactions — businesses prefer bank transfers for record-keeping
• International trade — cash is impractical and raises suspicion
• Recurring payments — easier to set up a standing order

Combining cash and bank transfer payments

For amounts approaching the 270,000 CZK limit, the best solution is a combination of both payment methods.

Cash and tax inspections

Cash transactions are subject to heightened scrutiny during tax inspections. The tax office focuses primarily on:

What inspectors will look at

1. Consistency of the cash book with supporting documents — every entry must have a corresponding cash document
2. Cash balance — must match reality and must never be negative
3. Compliance with the 270,000 CZK limit — especially for larger transactions
4. Undeclared income — comparing lifestyle with declared earnings
5. Personal deposits and withdrawals — unexplained cash deposits into a bank account
6. VAT linkage — whether cash revenue is included in VAT returns

How to prepare for an inspection

Security aspects of cash payments

Handling cash also brings security risks that you should keep in mind:

Risk prevention

• Don't keep large sums in the till — make regular deposits into your bank account
• Be cautious when transporting larger amounts of cash
• Use a safe to store cash on your premises
• If in doubt about a banknote's authenticity, use a UV lamp or counterfeit detector
• Insure the cash in your till against theft
• Consider a card payment terminal — it reduces your cash volume and improves security

Counterfeit banknotes

If you accept a counterfeit banknote, you are not entitled to compensation. You must hand it over to the Czech National Bank and lose its face value. It is therefore important to verify banknotes, especially higher denominations (1,000, 2,000 and 5,000 CZK notes).

The trend toward restricting cash in Europe

With its 270,000 CZK limit, the Czech Republic is among the countries with a relatively high cash payment threshold. Across the EU, there is a clear trend toward tightening restrictions:

| Country | Cash payment limit | |---------|-------------------| | Czech Republic | 270,000 CZK (approx. 10,800 EUR) | | Slovakia | 5,000 EUR (from 2026 for B2B) | | France | 1,000 EUR (residents) | | Italy | 5,000 EUR | | Spain | 1,000 EUR (residents) | | Germany | No statutory limit (but mandatory ID from 10,000 EUR) | | EU proposal | 10,000 EUR (EU-wide limit) |

Real-world examples for OSVČ

Example 1: Electrician with a large job

Miroslav is an electrician (OSVČ, VAT payer). He completed an electrical installation worth 180,000 CZK including VAT. The customer wants to pay in cash.

Solution: The amount is below the 270,000 CZK limit, so a cash payment is permissible. Miroslav:

1. Issues an invoice stating "Payment in cash"
2. Issues a cash receipt for 180,000 CZK
3. Records the transaction in the cash book
4. Includes it in his VAT return

Example 2: Building contractor and the limit

Jana runs a construction business (OSVČ, VAT payer). A customer wants to pay 400,000 CZK in cash for a bathroom renovation.

Solution: The full amount in cash is not permitted (it exceeds the 270,000 CZK limit). Jana has two options:

• Accept the full amount by bank transfer
• Accept a maximum of 270,000 CZK in cash and the remaining 130,000 CZK by bank transfer

Example 3: Graphic designer and a small payment

Tomáš is a graphic designer (OSVČ, not a VAT payer). A client paid him 3,500 CZK in cash for a business card design.

Solution: No problem at all. The amount is well below the limit. Tomáš issues an invoice (accounting document — he is not a VAT payer), a cash receipt for 3,500 CZK, and records it in the cash book.

Example 4: Splitting a payment across multiple days

A customer wants to pay 500,000 CZK for goods and proposes: "I'll pay 250,000 CZK today and 250,000 CZK tomorrow."

Solution: This constitutes circumvention of the law. Even though each individual payment is below the limit, the total obligation is 500,000 CZK, and deliberately splitting it across multiple days is not permitted. The correct solution is a bank transfer for the full amount, or a combination of cash (max. 270,000 CZK) and a transfer.

Frequently Asked Questions (FAQ)

Does the 270,000 CZK limit apply to advance payments?

Yes. An advance payment is a payment like any other. If you receive a cash advance exceeding 270,000 CZK, you are breaking the law. What matters is the total amount of cash payments received from one person on a single day.

Can I accept cash from foreign customers?

Yes, but the same limit applies. Cash in foreign currency is converted at the CNB exchange rate on the date of payment. The 270,000 CZK limit applies to the combined total of all cash payments in any currency.

Do I need a business bank account to accept bank transfers?

The law does not require a separate business account. As an OSVČ, you can receive payments into a personal account. However, a separate account is strongly recommended for clarity and in the event of a tax inspection.

What if a customer insists on paying in cash above the limit?

Refuse. Both parties face penalties for breaching the law. Explain the legal restriction to the customer and offer an alternative — card payment, bank transfer, or a combination of cash and transfer.

How do I record cash payments in my tax records?

In a cash-based tax records system, you record cash income and expenditure in a cash receipts and payments ledger. Every entry must have a corresponding cash document. It is recommended to maintain a separate cash book.

Do I have to deposit business cash into my bank account?

The law does not explicitly require it. However, it is advisable for practical reasons — cash in a bank account is safer, easier to evidence, and simpler to manage. Support any cash deposit into your account with a cash receipt document.

Does the limit apply to ATM cash withdrawals?

No. The 270,000 CZK limit applies to payments between parties (supplier–customer), not to withdrawals from your own account. You can withdraw any amount from an ATM (within your bank's own limits).

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Useful links to official sources

• Act No. 254/2004 Coll. on the Restriction of Cash Payments (full text)
• Czech Financial Administration — information on cash payments
• Czech National Bank — security features of banknotes
• MOJE daně portal — electronic submissions
• Czech Customs Administration — enforcement of the Act on the Restriction of Cash Payments

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This article is for informational purposes only and does not replace professional legal or tax advice. Legislation may change — always check the current wording of the relevant laws. Last updated: February 2026.