# payments in cash



## xabiaxica (Jun 23, 2009)

I just had a circular from my gestor which says that payments in cash for amounts 0f 2,500 € or above will be illegal as of 19 Nov 2012 - it would have to be by bank transfer or presumably cheque or card would be OK

I wonder if that will lead to more 'black' payments or less...................


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## thrax (Nov 13, 2008)

I just wonder how such a law could be policed???


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## xabiaxica (Jun 23, 2009)

thrax said:


> I just wonder how such a law could be policed???


pass.....

I suspect only those of us who are actually legal anyway will even care

I have to produce invoices for my students - none of them pay me that much upfront - ¡ojala! - but if they did I'd have to make them do a bank transfer

I imagine big stores which might currently accept large sums - say for furniture - or even car showrooms won't in future be able to


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## thrax (Nov 13, 2008)

Between individuals though, I still don't see how it could ever be policed and therefore, like so many of these kinds of laws it will be forgotten sooner or later...


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## NickZ (Jun 26, 2009)

thrax said:


> I just wonder how such a law could be policed???


They do it backwards.

Basically if you earn X you'll need ways of proving it. 

Now you ask how they prove income. They start with all the obvious things you spend. Mortgage,car payments. Utilities. You name it. 

So if you're a shop that sells expensive things you'll have to have a list of customers and how they paid.

If you're a professional that bills above the limit the same thing.

OTOH €2500 is a fairly high number.

OTOH how can they impose this without notice?


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## lynn (Sep 25, 2008)

It'll be interesting to see what happens at my kids' International school when the next lot of school fees are due.... loads of parents pay cash, and it's often a lot lot more than 2,500 euros.


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## snikpoh (Nov 19, 2007)

They talked about introducing this last year and nothing came of it.

I wonder if this will truly be introduced or if it's just a rumour. (I know it came from a gestor but .....)


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## gus-lopez (Jan 4, 2010)

It wasn't imposed without notice as it was in the news around last christmas. 
It only applies business to business. If I want to go in & pay cash for a car/furniture etc; etc. There is nothing to stop me.
It won't work nor can I see the point. There is already a requirement that banks notify the hacienda of payments, of any kind , over 3k . When you get registered firms asking for 5 cheques of less than 3k + 1 to make up the balance on a 15k invoice, you know there's no hope ! 
I can't even see the point of that unless of course you are fiddling on an industrial scale !

At the end of the day how many people would take 2500+ euros in cash & then pay it in the bank ?? I don't know anyone around here who would , even if it was for a legitimate ,legal invoice !


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## xabiaxica (Jun 23, 2009)

gus-lopez said:


> It wasn't imposed without notice as it was in the news around last christmas.
> It only applies business to business. If I want to go in & pay cash for a car/furniture etc; etc. There is nothing to stop me.
> It won't work nor can I see the point. There is already a requirement that banks notify the hacienda of payments, of any kind , over 3k . When you get registered firms asking for 5 cheques of less than 3k + 1 to make up the balance on a 15k invoice, you know there's no hope !
> I can't even see the point of that unless of course you are fiddling on an industrial scale !
> ...


hmm - the circular from my gestor doesn't say anything about business to business :confused2:


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## mrypg9 (Apr 26, 2008)

Oh s***!!

nOw my monthly drinks bill will appear in black and white on my credit card statement...

How embarassing...


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## mrypg9 (Apr 26, 2008)

On second thoughts though, ten bottles of vintage Veuve Cliquot at 250 euros a bottle doesn't denote alcoholic excess...


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## anles (Feb 11, 2009)

gus-lopez said:


> It wasn't imposed without notice as it was in the news around last christmas.
> It only applies business to business. If I want to go in & pay cash for a car/furniture etc; etc. There is nothing to stop me.
> It won't work nor can I see the point. There is already a requirement that banks notify the hacienda of payments, of any kind , over 3k . When you get registered firms asking for 5 cheques of less than 3k + 1 to make up the balance on a 15k invoice, you know there's no hope !
> I can't even see the point of that unless of course you are fiddling on an industrial scale !
> ...


It isn't only for business to business, it's for any transaction. It will help a little toward erradicating black economy. Obviously people who are comitting tax evasion will try to find a way round it, but every little measure helps. And it is quite useless for a business to bill you five times for smaller amounts as the 3000€ limit was never on one transaction but through out the year. I worked as an administrative in an office up until three years ago and we had to send the details of anyone who billed us for 3000€ or more over the year no matter haw small the individual receipts.


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## thrax (Nov 13, 2008)

mrypg9 said:


> On second thoughts though, ten bottles of vintage Veuve Cliquot at 250 euros a bottle doesn't denote alcoholic excess...


Just simple breakfast fayre....


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## mrypg9 (Apr 26, 2008)

thrax said:


> Just simple breakfast fayre....


With orange juice for health reasons, of course...

Yes, it is a small step but a necessary one to eradicating the black economy. Now we need to see radical reform of the autonomo tax structure.

This 'cash in hand no factura' culture is so deep-rooted, though. We have changed our repairing garage from a local village business which had to be practically coerced to produced any form of receipt or invoice to one in Estepona which routinely gives proper facturas with IVA.

Not only does this give you a form of guarantee against shoddy work or defective parts, it is the fair and right thing to do. How can legitimate businesses pay decent wages and make a reasonable profit when they are undercut by the IVA cheats? To me, that is capitalism raw in tooth and claw and unjustifiable.

When we were in business in the UK we paid all taxes, no reduction for cash and had to put up wth unfair competition from the cash-in-hand-no-VAT cheats.
Imo these types rank with benefit cheats and major tax dodgers.

How can the state provide decent health, education and other services if it is systematically denied the revenue it needs to be able to do so


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## casa99 (Oct 19, 2010)

Mary you should be in the government !! seriously though how do you get rid of the corruption and the black money paying when a lot of this comes from the top i.e. town hall staff who will take backhanders to try keep the honest people from removing them from their posts, I guess its going to take a long time and some very big hard decisions to eradicate this cheating .


mrypg9 said:


> With orange juice for health reasons, of course...
> 
> Yes, it is a small step but a necessary one to eradicating the black economy. Now we need to see radical reform of the autonomo tax structure.
> 
> ...


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## mrypg9 (Apr 26, 2008)

casa99 said:


> Mary you should be in the government !! seriously though how do you get rid of the corruption and the black money paying when a lot of this comes from the top i.e. town hall staff who will take backhanders to try keep the honest people from removing them from their posts, I guess its going to take a long time and some very big hard decisions to eradicate this cheating .


It's a 'legacy' of a repressive regime... The same kind of thing occurs in the former socialist states....I paid a lot of money to get a Residency Permit in Prague and it should have been free! Normally I wouldn't get involved in that kind of thing but I desperately needed the permit to register a car I had bought.

Where there is no civil society corruption is deep-rooted and becomes an accepted part of the culture - necessary to get things done, as with me and my car. The only way you can eradicate this is by more citizen involvement in political life, more transparency...but that's easier said than done as we[ve seen in the appalling turnout in the Parliamentary and PCC elections in the UK.

As for being in government...I've had my fill of politics! And I feel there's something wrong if too many people agree with me...


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## baldilocks (Mar 7, 2010)

The Spanish builder and other workmen/businesses who do work for us, be it on the house or the car, always bill us (after we have chased them up for weeks/months) and get paid in cash (we don't have a cheque-book and they don't carry a card machine around with them, even if they have one at their office).


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## Megsmum (Sep 9, 2012)

mrypg9 said:


> With orange juice for health reasons, of course...
> 
> Yes, it is a small step but a necessary one to eradicating the black economy. Now we need to see radical reform of the autonomo tax structure.
> 
> ...


How very true for us as well. We find that very often it is the customer - usually top end earners who always say

"what will you do for cash" and then there is the " wow thats expensive, my friends neighbor can do it for less - he is a retired fireman/policeman/milman etc well of course he can do it cheaper he is not paying tax/ni and has no flipping overheads.

Good grief you have got me on the old box at speakers again this morning.

xxxx


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## baldilocks (Mar 7, 2010)

I'm glad to see that I'm not the only one who rails at those who don't pay their fair share and leave those of us who do, to pay more to make up for the shortfall.


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## mrypg9 (Apr 26, 2008)

baldilocks said:


> I'm glad to see that I'm not the only one who rails at those who don't pay their fair share and leave those of us who do, to pay more to make up for the shortfall.



I can understand your workers preferrig cash in hand..but what about the IVA? 

If the activity is IVA exempt, fair enough. But if it isn't??


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## xabiaxica (Jun 23, 2009)

mrypg9 said:


> I can understand your workers preferrig cash in hand..but what about the IVA?
> 
> If the activity is IVA exempt, fair enough. But if it isn't??


All my students pay me cash

teaching is IVA exempt


but I STILL have to produce invoices...............


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## baldilocks (Mar 7, 2010)

mrypg9 said:


> I can understand your workers preferrig cash in hand..but what about the IVA?
> 
> If the activity is IVA exempt, fair enough. But if it isn't??


But IVA is shown on the Bill and included in the total. Whether they pay it in, I cannot say...


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## gus-lopez (Jan 4, 2010)

anles said:


> It isn't only for business to business, it's for any transaction. It will help a little toward erradicating black economy. Obviously people who are comitting tax evasion will try to find a way round it, but every little measure helps. And it is quite useless for a business to bill you five times for smaller amounts as the 3000€ limit was never on one transaction but through out the year. I worked as an administrative in an office up until three years ago and we had to send the details of anyone who billed us for 3000€ or more over the year no matter haw small the individual receipts.


I did not say 'administrative , I said bank. A bank has a duty to report transactions of 3k or more,not multiple nor cumulative but only individual in excess of 3k.

This also points out that the law does not apply to any one who is not a business or self-employed. You can still buy your house with the majority in cash ! :rofl:

" The new regulation only applies when one or both parties are companies or self-employed persons, and does not affect transactions between private individuals. "

Cash payments of 2,500 euros or more illegal from Monday onwards

I would have thought that it is debatable whether it is legal under EU rules as the main reason that nothing overall has been done is because the Germans , who deal in cash, are vehemently against it.


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## NickZ (Jun 26, 2009)

The Italian limit is currently 999. Off and on calls for it to be lowered.

2500 is such a high limit I'm not sure what the point is.


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## NickZ (Jun 26, 2009)

gus-lopez said:


> " The new regulation only applies when one or both parties are companies or self-employed persons, and does not affect transactions between private individuals. "
> 
> .



If it applies when one side of the transaction is a company then it applies to almost everything.

If you buy the house from a private seller then fine. But the payment to the estate agent would be covered. The payment for the legal fees.


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