Spanish Business News

The latest business, economic,property, stock market and financial news from Spain. Keep up to date with what is happening with the Spanish economy, stock market, the economic crisis, the euro zone debt sovereign debt crisis and the Spanish property market.

Spain to ban cash transactions of more than 2,500 euros
14 April 2012 @ 10:22

The Spanish government has announced plans to ban all cash transactions of more than 2,500 euros, in an effort to clamp down on the rampant black economy and tax evasion in Spain. This follows similar moves by the Italian government, which recently announced plans to ban cash transactions above 1,000 euros. Interestingly, the 2,500 limit only applies to Spanish residents. For those that are non-resident, the limit rises to 15,000 euros. Those found guilty of breaking the law will be receive a fine totally 25% of the transaction value.

I can see why the government would want to do this. The black economy is huge in Spain. It's quite common to see people paying for their weekly shopping with 500 euro notes. But I can't see this helping the Spanish economy in the short term. It needs people to spend money, including those with black market money...

Permalink

Spam post or Abuse? Please let us know

2 Comments

Bebopdebob said:
05 May 2012 @ 12:17

I read somewhere about 3 years ago that there was a mindboggling sum of money missing from the spanish economy and this vast sum which amounted to tens of billions and probably more was made up mostly of €500 notes. These notes have vanished from circulation within the spanish economy. The spanish named them at the time "Bin Ladens" as nobody could find them but they are supected to be hiding in boxes under various beds across the country.
So what is the best way of getting these "Bin Ladens" out of hiding in the black economy?
Spain should go back to the Peseta or make €500 notes obsolete and give the spanish that are harbouring them 6 weeks to deposit all these Spanish Euros back in the bank or exchange them for different notes before they become worthless. Problem solved. Tax avoiders caught in a jiffy.
Why won't this happen?
Too many political arms being twisted by rich businesses and individuals.

Cast your mind back a few years ago when the Irish Republic adopted the Euro. Billions of black economy Irish Punts came out of hiding before they were rendered worthless. Much of this black money went to Spain which helped to kick start the building boom. I was in Spain at this time and watched as thousands of Irish flew to Spain and were falling over themselves in a frenzy to buy property there and getting seriously ripped off in the process.
I a country where tax avoidance is a national passtime the introduction of this new €2,500 law will make no difference whatsoever.

Edmund said:
02 June 2012 @ 09:59

When we bought our cortijo (house) we paid 15% of the price in cash in the notary's office (the remainder by bank draft). The seller protested that she wanted more in cash but our solicitor persuaded her that no one would believe her if she declared she had sold her property for so little. Many firms are now accepting credit cards and this eases the cash situation, you even see people paying for a €8 menu del día with a credit card so eventually this cash problem will dissapear. In many places there is a sign saying that €200 and €500 notes will not be accepted due to forgeries, it gets difficult to process major transactions, even €2,500, in €50 notes.