Spain to limit cash transactions to fight tax fraud

Spanish government will implement a series of measures to fight tax fraud including limits on the use of cash

Transactions of more than 2,500 euros that “involve at least one professional entrepreneur” won’t be allowed to be made in cash, Prime Minister Mariano Rajoytold Parliament. Fines of 25 percent of the transaction amount will be handed to those breaking the rule.

The government chose to implement an amnesty on tax evaders, which it expects will raise 2.5 billion euros, as it wanted to avoid increasing taxes, Rajoy said.

Tax amnesty is approved in order to repatriate income according to the following rules:

– Foreign source dividends derived from entities of the same group, repatriated before 1 January 2013, will be subject to a 8% tax rate;

– The regularization of non-declared assets before 1 December 2012, by taxpayers subject to the individual income tax, corporate income tax and non-residents income tax, will be subject to a 10% tax rate.