Which are the cash payment limit in Spain?
Cash payments in Spain made by companies, self-employed persons or individuals of Spanish or foreign nationality are governed by a series of limits established by the AEAT. The National Agency for Tax Administration aims to reduce and avoid tax evasion and money laundering.
In accordance with the law, transactions in which one of the parties is a contractor or a professional and the amount of which is equal to or greater than 1.000 euros or whose value in foreign currency can not be settled in cash.
If the payer is a natural person who does not have his fiscal domicile in Spain and does not act as an entrepreneur or professional, the amount is fixed at 10,000 euros.
What do we mean by cash payment?
The following means of payment are cash payments:
– National and foreign banknotes and coins
– Bank checks with bearer
– Any other physical means, including electronic.
What are the obligations that involve transactions that can not be paid in cash?
The parties involved in such transactions (employer, professional or individual) must keep the proof of payment for 5 years from the date indicated to prove that the payment was made by another means of payment, other than money cash.
If, for any reason, the AEAT asks you to justify a cash payment, please be aware that to prove a cash payment, you can submit a receipt, a letter of payment or proof of income.
The invoice received from our supplier would never be sufficient.
What happens if I violate the limits?
As you know, any breach of the rules established by the law gives rise to offences.
In this case, failure to comply with the limitations on cash payments implies an administrative offence in the event that participants pay the full or partial amount in cash in violation of the limitation indicated.
The payer and the recipient will be jointly and severally liable for the offence committed and the corresponding penalty. The tax agency may require the payment of the penalty to both the payer and the buyer, or to both.
What is the amount of the penalty for non-compliance?
The sanction for non-compliance with the limitations will be 25% of the basis of the sanction. This base will be equal to the amount paid in cash, provided that the amount of the transactions is equal to or greater than 1.000 euros or 10.000 euros.
For example, a transaction between 2 people whose amount is 10.000 euros, the payment is made in cash. The amount of the penalty will be 25% on the payment in cash, that is to say 10.000 euros, or a fine of 1.000 euros.
The mentioned offence will end at 5 years from the day the offence was committed.
The AEAT may release one of the parties in the event that it denounces the cash payment to the other party. To do this, the complaint must be filed no later than three months after the payment is made. It is possible to declare the payment in cash on the website of the Tax Agency or in the archives of the AEAT delegations.
