Pay me in cash!

October, 2019.

What would you think, when someone asks you to pay only in cash? My first though is: Is it black? If the amount is more than 8.000 kroner, then I am sure it is black. It is certainly illegal, according to the Danish Money Laundering Act (Hvidvaskloven).

According to the law article 39, point 1, only payments less than 1.000 euros can be accepted without further information. In the Danish tax authority’s guide, the accepted amount is less than 8.000 kroner. If you pay more than that, then you have to pay digitally by bank transaction or credit/debit card. 

Friend of a friend

Meeting people in a new country is crucial for your wellbeing as a foreigner. Hiring friends of a friend for small jobs is a part of that. You may feel pressured to take this person to renovate your home or babysit your children, because the person needs a job; and your friend recommends him/her to you. You might accept the offer; even though you secretly know the person is not qualified for the job. You may have to pay for that later.

Some people argue that hiring moonlighting folk is cheaper, because as they do not pay value-added tax, income tax and other expenses, therefore their price would be lower. There are doubts about that. If their purpose is to earn money, even illegally, your interest is not their interest.

The consequences

So they get their money, and you get no guarantee for the work (if it has been done at all). Likely, your insurance company will reject to cover the damage that may be caused by your new friend´s work. Without a receipt, you cannot even charge the person for fraud. It will be a long and complicated process.  In the end, you cannot contact the person any more.

According to the Danish tax rule, you get tax deduction for renovating your home (håndværkerfradrag/servicefradrag). However, you will lose this benefit, because you have no evidence for your payment. If the work has been  done for your business, you could let go 100% of your tax deduction for this operating expense.

Being a foreigner, you would put yourself in the vulnerable situation by paying black. According to the Money Laundering Act article 78, point 2, you will be fined and in more serious case can be sentenced up to 6 months in prison. Importantly, it has consequence for your residence permit in the country. The Danish immigration rules impose a penalty of 6 years to being permanently barred from permanent residence on crime convicted foreigners. In reality, shoplifting and begging on the street are enough to be sent out of the country with entry prohibition. Things can turn ugly, and the person can use the illegal payment to blackmail you. Who knows?

If you feel bad after reading this article, you still have a second chance to save your a** by reporting the payment on Skat’s website. The link is here (in Danish). Hurry up! You only have 14 days after the payment date to do so.