Banks to stop producing €500 notes
Friday, May 6, 2016 @ 8:15 PM
BANKNOTES of €500 – the highest euro denomination – will no longer be minted because of their extensive use in money-laundering, fraud and forgery.
The Central European Bank (BCE) will gradually phase out the notes, but they will remain legal tender for a while yet and can be exchanged in any bank in any member State.
Notes of €500 are the third-highest denomination in the world – only the 1,000 CHF (Swiss Franc) note, worth €909, and the 10,000 Singaporean dollar note, worth €66,357, are higher.
Spain was the country where the highest number of €500 notes was circulating during the time of the property boom – a time when so-called ‘black money’, or paying part of a home purchase in undeclared cash to reduce tax and fees, was not only tolerated but even commonplace.
They have declined somewhat since successive governments in Spain tightened up on ‘black money’ property transactions – even tracing new homeowners and taxing them for the difference.
This said, any tax debt not notified to the payee within four years expires under the Spanish statute of limitations, and the amount avoided has to be at least €120,000 to be considered a criminal offence.
But at the start of the housing market crash, many owners found out how ‘black money’ can come back to bite the cash-dealer, meaning in recent years the practice has all but died out.
Read more at thinkSPAIN.com