Spain's tax authority asked to clarify rules on purchases of cars over 2,500 euros

Since 19 November, a Tax Agency provision has been in force stating that cash payments exceeding 2,500 euros are prohibited, provided that one of the two parties is a businessperson or self-employed worker. Payments between private individuals do not have to comply with this rule, nor do tourists, who may pay up to 15,000 euros in cash so as not to “harm” tourism.

What has been affected are vehicle sales transactions, according to dealers’ associations. Under the rule, an advance payment of more than 2,500 euros in cash cannot be made to buy a car from a dealership or to pay for a workshop service. According to Ganvam, the rule “is too restrictive”.

Ganvam will request a clarification, since they cite as an example the sale of a vehicle priced at 10,000 euros, and ask whether the customer can hand over a 2,000 euro deposit in cash (below the 2,500 euro limit) and pay the remaining 8,000 euros by bank transfer. Let us recall that the provision also states that if a cash-paid transaction exceeds 2,500 euros but is paid in several instalments split into amounts below the legal limit, the restriction is also being breached.

For the time being, no cash advance payment can be accepted when buying a vehicle from a dealership (the rule does not apply between private individuals). This applies to new cars, used cars and repairs alike.

Source | Finanzas