Dundee West MP Chris Law was questioned by police in September in relation to his Spirit of Independence referendum campaign in 2014.
The campaign saw him raise grassroots funding to travel across Scotland in a Green Goddess fire engine that had been painted in the colours of the saltire.
The Crown Office confirmed that no further action would be taken.
A spokesman said: "Following discussion with Police Scotland, we agree with their assessment that there is insufficient evidence to support each of the allegations, and that, as such, they do not intend submitting a formal prosecution report."
Mr Law told the Courier newspaper: "Politics - at all levels - should be a force for good. That's what drove me to become involved in the referendum campaign with Spirit of Independence, and why I stood to represent the people of Dundee West.
"While this has been a distressing process, I have always continued doing the job I was elected to do and I am now more motivated than ever to stand up for my constituents.
"While there was never any doubt from the outset, I was happy to co-operate with inquiries and I'm glad the matter has now been fully resolved."
An SNP MP has been cleared of any wrongdoing after a police investigation into his financial dealings.