Government to ban cash payments over €2,500

[aspasia]

The new Spanish PM, Mariano Rajoy, has announced that business cash transactions of over €2,500 are to be banned as an anti-fraud mechanism to increase tax income for the Government. Breaches of the rule will result in fines of 25% of the value of the payment. Sr Rajoy mentioned the reform in a Q&A session in Parliament, so more details will no doubt be forthcoming when the measure is formally announced. JA

[Janet]

This measure comes into force tomorrow and will apply to any operation in which an autonomo, professional or business is involved. The new rules were published in the BOE on 30 October, and the Agencia Tributaria (AEAT) expects that it will limit cases of fiscal fraud. AEAT says that over the past five years some 1.5 billion Euros has been "regularized" from inspections which have detected cash transactions. Sanctions for those breaking the new regulations will involve fines of 25% of the amount of the illegal operation with both parties to the transaction being held responsible. Moreover, sanctions can accumulate, so that if an autonomo is regularly paid in cash, he can be fined not only for the cash taken, but also for unpaid VAT and taxes. JA

[Nova]

Is there any indication of how this will affect banking transactions?  I would expect to have heard something about this at work by now 

[Janet]

No indication at all ... 

[Perikles]

Is there any indication of how this will affect banking transactions?  I would expect to have heard something about this at work by now 

As I understand it, any transaction over 3000 euros automatically gets flagged by the hacienda spies, so not much change there 

[Nova]

Certainly for any transaction of €3.000 or over, a copy of the customer ID needs to be held on file in case it's requested by the higher powers, but it's the newly unclassified €500 margin below that that I'm wondering about.

[Guanche]

I don't get this. Who exactly can pay who and how. Lets say I want to buy a car, I have 5000€ in cash from the private sale of my old car and the car I want to buy is 10,000 from a garage. Do I have to put the 5,000€ in to the bank so I can pay for the bank to give me a cheque? Surely this will just mean this type of fraud will go deeper underground? Or am I completely missing the point?

Or is this just another Spanish decree that say's a lot but means nothing for the benefit of the EU and bail out loans?

[Janet]

Anyone who's in business, basically. If someone's an autonomo, or a professional, or a registered SL, they can't accept cash over 2,500. So if you buy a car from me privately, you can pay me cash, but if you buy from a garage, dealership or autonomo car sales person, you can't ...

[Guanche]

Bit of a money spinner for the banks then. A bank cheque, which we have used a number of times, isn't cheap for what it is.

[Nova]

Or use a business that takes plastic