The 500 euro banknotes have been almost like an urban legend for the citizens: they are known to exist, or so they say, but few have had them in their hand. A circumstance that has increased even more during the last three years.
At the beginning of 2019 the Bank of Spain stopped issuing these banknotes. The decision came years after the recommendations of the European Central Bank to prohibit the production of 500 euro notes due to their connection with activities such as money laundering.
From that moment, the agency reported, only a few establishments could recirculate these bills, that is, deliver them to their customers after the relevant supervision and verification of the integrity of that money.
These establishments are those related to professional sectors such as banks, money transfer companies, currency exchange offices or similar, which will be able to give 500 bills to customers.
With these tickets, the citizen will be able to buy and save, since they have not ceased to be valid as a method of payment or deposit of value nor have they lost their value at any time. And, if at any time, the people who have these banknotes in their possession wish to exchange them for others of lower value at the Bank of Spain, they will be able to do so without problems.
The Government monitors the 500 euro banknotes very closely, as they obliges all banks to report any transaction involving a 500 euro banknote (or more). The Tax Agency, therefore, is religiously informed of any income or withdrawal of this type of banknote.
The background of this measure, which enables the Treasury to carry out the pertinent investigations in case it sees peaceful signs, is the linking of cash with activities related to fraud and the underground economy, with the corresponding tax evasion.
Based on this, the Government has recently approved the reduction of the limit of cash payments, which has gone from 2,500 to 1,000 euros for professionals, with special vigilance to those sectors in which there is a greater use of cash: the hospitality industry, the construction, commerce, the reform sector …
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