If Cash Payments Are Likely To Be Limited To 1000 Euros, The Transaction Costs Will Be Paid In Full.

2021-01-28   |   by CusiGO

On Thursday, a number of business sector employers (large area, small shops, home appliances and clothing stores) and misappropriating transportation companies said they opposed limiting cash payments to 1000 euros, a measure discussed by Congress after the report. The government passed a bill to combat tax fraud. Employers claim that such restrictions will hinder the recovery of trade, which has been severely affected by the epidemic, as commissions from electronic payments do not help stimulate demand, which has been severely curbed by the health and economic crisis.

In a joint statement, the National Association of large distribution companies (anged), the Federation of Spanish businesses (small shops), the association of textile trade and supplies (acotex) and the Federation of home appliance traders (fece), as well as safety services, especially transport, were introduced They pointed out that “at a time of high economic uncertainty and collapse of demand, it seems unreasonable to set up consumption barriers and additional transaction costs, such as commissions for paying and holding cards.” They argued that consumer fees for holding credit cards and e-sales commissions in stores could pose obstacles to the post pandemic trade recovery, and pointed out that any regulation must “maximize” its adaptation to the distribution reality in Spain “The vast majority of consumers continue to shop with cash.”

They claim that their common goal is to crack down on tax fraud, but such a low limit “limits consumers’ freedom of choice” and “makes almost any customer shopping in business suspicious”. They pointed out that “action should be taken directly against identifiable sources of fraud and the underground economy, rather than imposing new taxes and activity restrictions on households and businesses.”.

Limiting cash payments to 1000 euros is part of an anti tax fraud bill passed by the government in October, which is currently under consideration in Parliament and is expected to raise 828 million euros a year (a quarter of the cash limit). In fact, the project limits the payment of “transactions involving any party acting as an employer or professional” to 1000 euros, which remains at the current limit of 2500 euros unless the payer is an individual. However, as employers denounce, some amendments require that this restriction also apply to payments made by individuals, which is the possibility that commercial employers are “concerned”. The rules set a penalty of up to 25% of the transaction.

In a 2019 opinion from the European Central Bank, organizations supported their claim that it was “disproportionate” to limit cash payments to 1000 euros. European regulators made the comment after their first attempt to regulate the matter in 2019, but it was thwarted by budget failures and subsequent early elections. At that time, Mario Draghi signed the non binding opinion of the European Central Bank, It said that “it would be disproportionate to reduce the cash payment limit to EUR 1000 in transactions in which the payer acts as an employer or professional, taking into account the potential adverse effects on the cash payment system.”. As the employer recalled, the ECB considered the measure “endangering the concept of fiat money” and “excessive” sanctions regime.

Looking back at employers, the European central bank stressed that cash is still “an important means of payment for certain social sectors, which is a fast and widely accepted means of payment, does not require technical infrastructure, and therefore has no electronic failure, This is the only means of payment that “does not involve the legal possibility of charging royalties.”. In addition, they pointed out that the struggle against the shadow economy “has not improved significantly” in France, where this restriction is applied, while other countries without this restriction “such as Germany, Finland or Austria, have very low levels of shadow economy”.