Spanish Government Bans Cash Transactions Over 2,500 Euros!

Spain Bans Cash Transactions Over 2,500 Euros (Alexander Higgins, April 16, 2012)

Spain has outlawed the use of cash in business transactions in excess 2,500 euros in order to crack down on the black market and tax evaders.

The motivations behind the push for digital currencies is exposed as Spain heads down the road of the Greeks in combating their sovereign debt crisis.

As the government scrambles for every tax dollar it can get its hands on, even though they already gave every Spaniard $23,000 Euros in debt last year alone (approximately $32,500), they are now banning all large cash business transactions.

Why? So they can track the transactions and make sure that people and business are paying taxes. Being able to track the transactions is also aimed to combat the growing black market in Spain.

Via Libre Mercado: (translated by Google)

The Government banned cash payments in excess of 2,500 euros

Those who violate the ban will face fines of 25% of the payment made in cash.

The Prime Minister, Mariano Rajoy, has announced on Wednesday that the plan to combat tax evasion on Friday approved the Cabinet prohibit the payment in cash transactions of over € 2,500 and which at least involved a businessman professional.

During the control session the Government in the House of the Congress of Deputies and in response to a question about the tax amnesty made by the general coordinator of IU, Cayo Lara, the Prime Minister has revealed that those who violate the ban will face fines of 25% of the payment made ​​in cash.

The Government had already advanced the plan to combat fraud limitations include the use of cash for certain operations, although he had not yet specified which would place the threshold (yes at the time there was talk that it could be 1,000 euros for self-employed).

Black money

This measure aims to prevent the use of black money in commercial transactions and, in the case of companies, give them an obstacle to not resort to false invoices. The plan to combat fraud adopted on Friday, the Cabinet intends to raise up to 8.171 million euros in 2012.

Rajoy has argued before Cayo Lara tax amnesty approved by the Government in the fight against the deficit, noting that a measure is “extraordinary and exceptional” only valid for 2012, adopted in a “very difficult” and to help improve revenue.

In fact, insisted that it is a measure recommended by the OECD in difficult situations and has already been used in countries like Germany, USA and Italy, which allowed the latter to raise 5,000 million euros in 2009 and 2010.

The president has also said that in Spain and there were three tax amnesties in the past (1977, 1984 and 1991) and, unlike then, when the fraudsters who paid nothing surfaced assets to the Treasury, in this case paid between 8% and 10%.

IU criticizes the tax amnesty

For its part, the general coordinator of IU, Cayo Lara, has warned the Government that the tax amnesty “is not the way to fight” the deficit has been reported that an initiative is “unfair and unconstitutional.”

Rajoy Lara reminded that when the PP was in the opposition rejected the tax amnesty proposed by the Socialist government claiming it was “unfair and antisocial” in the words of the PP’s general secretary and president of Castilla-La Mancha, María Dolores de Cospedal.

“We understand the serious situation, but the tax break allows us to continue to rob everyone with impunity. The problem of fraud all fails, cutting the budget of the tax and forgiving fraudsters,” he broached Lara.

The general coordinator of IU Rajoy called on a real anti-fraud plan, with more resources to the tax office, and has taken the opportunity to ask the president that when you announce cuts of 10,000 million euros “do it in Parliament.”

2 thoughts on “Spanish Government Bans Cash Transactions Over 2,500 Euros!

  1. Absurd law. People will simply make a series of payments to complete their transactions. Morality cannot be legislated. The more micromanagement rules like this, the more likely people are to feel rebellious, and find ways around paying. If the government had said instead…support our system, help us to grow our economy, pay a little more….the reactions would have been better. Nobody wants to end up like Greece….if approached correctly, Spanish citizens might want to support their government.

  2. I have been told that the 2500€ limit applies over a rolling 5 year period. In other words 2500€ is all you can spend cash within the next 5 years, and that you must keep records. So I guess this is the end for many small businesses who just don’t trust banks. Also, what happens to petty cash payments?

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