On Friday last week the Spanish President Mariano Rajoy introduced a new financial reform bill into congress, which includes a 2500 Euro limit on cash payments where one party is a business person in an effort to reduce the size of the black market and eliminate false invoices.
Rajoy’s government estimates this will bring an additional 8.1 billion Euros into government coffers and is just one of several measures being introduced to combat tax avoidance. Current estimates suggest as much as 30% of the Spanish economy is fueled by the black market, but as the financial crisis deepens this may increase.
Businesses and self-employed who continue to pay or accept payments greater than 2500 Euros in cash will now be subject to fines that could total as much as 25% of the total disbursement.
All businesses are affected, including hotels and guesthouses, and whilst the move may be difficult to police, Spain’s taxation authorities may adopt more stringent assessment criteria in the event significant cash transactions are suspected.
Private individuals receiving an invoice greater than 2500 Euros, for example building repairs or installations, buying furniture or other high value goods, or paying for holidays etc will now be required to pay using their bank issued card (cc or debit) or send an electronic payment.
I’ve been living in this lovely area of Western Andalucia for the last 20 years or so and dedicate most of my time to the running of English language tourist information websites for the towns of Cádiz, Ronda, Grazalema, the famous or infamous Caminito del Rey, and also Wildside Holidays, which promotes sustainable and eco-friendly businesses running wildlife and walking holidays in Spain. My articles contain affiliate links that will help you reserve a hotel, bus, train or activity in the area. You don’t pay more, but by using them you do support this website. Thankyou!