Ah, yes – the good old days when wheelin’ and dealin’ were rife.
Not any more! New legislation is on it’s way….
Currency (Restrictions on the Use of Cash) Bill 2019
The community has been given opportunity to engage in conjecture and comment in regard to a very important piece of legislation. The bill addresses cash handling and payment rules, specifically whether high value payments are able to be made in cash. The new bill proposes a number of penalties for accepting payment in excess of $10,000 in cash. While the call for consultation ended on the 12th of August you are still able to ask questions via the provided email address.
Rationale: The introduction of an economy-wide cash payment limit is a recommendation from the Black Economy Taskforce and sends a strong signal to the community that it is not acceptable to avoid tax and other obligations by paying with cash.
Start date: 1 January 2020 and for certain AUSTRAC reporting entities from 1 January 2021.
What transactions are covered by the cash payment limit?
The limit applies to all cash transactions equal to or in excess of $10,000, except for those that meet the conditions specified in the draft Currency (Restrictions on the Use of CashExcepted Transactions) Instrument 2019.
What are examples of exempt transactions?
All cash deposits and withdrawals from your bank account with an authorised deposit-taking institution (ADI), exchanging foreign currency and all consumer to consumer transactions such as selling a second-hand car but excluding real property transactions.
Are there any new reporting requirements?
This will not impose additional reporting requirements on businesses and consumers.
What happens if you break the limit?
From 1 January 2020 it will be a criminal offence to make or accept a payment from businesses that includes $10,000 or more of cash. It is also offence to make or accept a cash donation equal to or in excess of $10,000. The maximum penalty is up to two years imprisonment and/or 120 penalty units ($25,200).
How does the cash payment limit apply to payment plans?
The cash payment limit will apply to the total price of a single supply of goods or services, regardless of whether the price is split into a series of payments over time.
The total cash payments made towards the final price paid must not equal to or exceed $10,000. The remainder of the payments must be made electronically or by cheque.
Email your questions to Blackeconomy@treasury.gov.au