Dick Dasterdly

Why cash is still king in Spain | In English | EL PAÍS

Spain 80% cash transactions, 20% other.

Exact opposite to Scandinavia where it's only 20% cash

While the UK has 40 % cash.

One of the reasons I like Spain.

cricketman

In Spain there are many smaller businesses and they actively discourage card payments because of the average 3% commission. In the Northern European countries, high streets are dominated by chains who get better deals on commission

The other reason is that Spanish hacienda actually monitors everybodies bank accounts quite carefully so people want cash for holiday appartments or buying 2nd hand clothes etc rather than bank transfers

Dick Dasterdly

I believe Denmark expects to phase cash dealings out completely very soon and possibly cash will no longer be legal tender.
Can't see that happening in Spain any time in the near future.
Totally different mindset to the Scandinavians who are surprisingly subservient in their ways considering it once was the home of the Vikings.
Efectivo is the name if the game here and bullocks to the taxman.

wilsman77

love cash......

chopera

Yes the Danish proposal is interesting. I haven't read the details but I think the theory is that if all transactions are electronic, the government can know exactly how much money is in circulation which will help it set a precise monetary policy, which in turn might lead to an end to credit driven boom and bust (although I think I heard that before somewhere).

Dick Dasterdly

Plus of course a noticeable increase in income tax revenue.

Just imagine if such a proposal was put into force in Spain.

Widespread panic I should imagine.

There again members of the govt themselves being the number one offenders, I don't see it happening anytime soon.

Viva efectivo !

cricketman

Viva el efectivo

How long have you been in Spain

Dick Dasterdly

Long enough to know that efectivo still rules and will for a long time to come.

I make no apologies for such abbreviations either Mr Spelling policeman.

No work again today, Cman ?

You seem to live the life of Riley at your particular Saltmine, or is that typical in your neck of the woods ?

No wonder the country is going to the dogs.

amideislas

Denmark isn't exactly the poster child for "boom and bust" economy, but it is amongst the top 5 most heavily taxed economies on the planet, and doing away with cash will no doubt facilitate further government paternalism. No escape. It's all there in black and white. Fail to conform, and you will be subject to penalties.

Speaking of Denmark, I've been penalised this way, not by Denmark, but by Germany. We had a very close Danish friend who I loaned €5K to (in cash). In the following year, he paid me back - by wire transfer (big mistake).

Well, in the next year, the finanzamt (German HMRC) whilst routinely scanning my bank account, found the transaction, and concluded that I had not declared this as income on my steuererklärung (tax declaration) for that year, so they simply withdrew about €2200 from my bank account (tax+penalties), and only afterwards wrote a letter saying that I had failed to declare it as income and had to pay the penalties. EDIT: Following the finanzamt's money grab, my bank was also not happy with my "criminal" tax-evasion activity, and threatened to close my account, which I narrowly averted.

They did give me the option of contesting it, but I would have to submit to a full audit. So, I choose the audit option. Nightmare of unnecessity. I was treated like a criminal every step of the way. I provided everything they asked for, but at the end of the day, they assessed that I had failed to produce a Darlehensvertrag (loan contract) with our Danish friend (they never asked for this), so they ended up getting €2200 in free money.

I wonder how often this kind of thing happens. As long as they can watch everything you do, I reckon they can create all sorts of justifications for collecting more money. Because they can.

Tax greed. Every bit as unethical as any fraud committed by a bank, corporation, or criminal. But tax greed is perfectly legal, and avoiding it is increasingly considered both "unethical" AND punishable.

cricketman

Good example

Spain is a very free i.e. libertarian country. You do not have Big Brother breathing down your neck at all times. Yes that means that a lot of people may cheat in various ways but I can take that as a slight negative for all the positives that being free gives you

I am not sure that we should always look towards Scandinavians as a good example for how to run countries. The Swedish education system is a mess, Norway is only well off because of vast oil reserves and on a personal level, the Scandis I have met are unsociable and have many personal issues

bobd22

Has it not been law in Spain since 2012 that payments over 2500 euro must be done by electronic transfer not in cash for Spanish residents? To counter tax evasion and money laundering these rules do not apply to non residents.

amideislas

Yeah, well, around here you're obliged to buy obtain council permission to paint your lounge, too. I'm sure everyone does

I've paid more than €2500 in cash at Leroy Merlin, so I reckon I'm equally as criminal as everyone else is. Surely Hacienda will be at my door any minute with a demand for €5K in fines for these "criminal" money laundering activities. Can I get a discount if I pay the fine in cash? Sin IVA?

Ahh, Spain. All the benefits of a third-world country conveniently packaged in a first-world tin.

bobd22

Exactly any law is useless unless enforced and that applies worldwide. Add to that just making silly rules as you say painting your own house just means again nobody applies them!

amideislas

I think the real question is whether 'tis better to attack the symptoms, or cure the disease.

The reason people evade the rules are many, but chief among them is an increasing disparity and distrust of any authority which increasingly demands more and delivers less.

Government is supposed to work in the best interest of taxpayers, not the other way around. More and more rules and more and more taxes only encourage people to find ways around them, which in turn creates an adversarial relationship between the public and government. Public trust in government decreases, and government starts to see itself as the authoritative paternal 'keeper' of the 'taxpayer farm'. "us" and "them", and it's their fruit.

Our beloved taxpayer-farmers are naturally spend-ivorous, so they have a instinctive need to obtain ever-higher yields from their crop. Some farms invest in creating a fertile environment for their crop and ultimately, produce healthy, plentiful fruit, but for others, it's easier to simply pick the crop down to the stem, and then wonder why their crop is struggling.

If government were serious about addressing the black economy and increasing tax revenues, they should focus on curing the reasons why their crop is struggling. It's useless to attack the symptoms, it only makes the disease worse.

cricketman

The black economy in Spain is a red herring, if it really were as big as some people say it is then Spain actually has a real GDP bigger than the UK - which I dont believe

The Spanish mindset is that politicians and the system fails to protect them in the hard times, and so they need to protect themselves and save cash wherever possible

If Spain had the UK's incredibly generous welfare system then yes I would agree that people should always pay their taxes/IVA and would have a moral duty to do so. But in the meantime, a morally superior point of view is to do what it takes to put food on the table and keep those mortgage payments ticking over