Payments in cash: limits, means and supporting documents

Payments in cash: limits, means and supporting documents

Payments in cash: limits, means and supporting documents


The payments in cash made by companies, self-employees or individuals of Spanish nationality or foreigners have a number of limits stablished by the Spanish Tax Office.

The object of the Spanish Tax Office is to reduce and avoid the tax fraud as well as the money laundering.

As stablished in the Law, no transactions can be settled by cash when any of the parties involved is an employer or professional and also the amount to be paid is equal or higher to 2,500.- Euros or its counter value in any foreign currency.

In case the payer is an individual without a fiscal address in Spain, not acting as an employer or professional, the limited amount is fixed to 15,000.- Euros


What we understand as payments in cash?

It is considered as payments in cash the following means of payment:

  • National or foreign bills and coins
  • Back Cheques made payable to the bearer
  • Any other means of payment including the electronics


What obligations carry out the transactions that cannot be paid in cash?

The parties involved in such transactions (individuals, professionals or employers) must keep the proof of payment for a period of 5 (five) years from the payment date in order to demonstrate that settlement was made through a mean of payment different to cash.

If by any reason the Tax Office requires proofs of a payment in cash, it is important to know that to prove a payment in cash a receipt, a letter of payment or any accrediting certifications can be valid.

Only the invoice issued by our provider it would never be enough.


Consequences of non-compliance the limits?

As you know, any non-compliance of the rules established by Law should develop to infringements.

In this case, the non-compliance of the limits to payments in cash can be considered as an administrative infringement, providing that parties involved pay, either partial or totally, an amount in cash breaching the established limits.

Both payer and receiver will have to bear severally the committed offense and the corresponding infringements.  The Tax Office could also require the payment of the sanction to either the payer, buyer or two both.


How much it should amount the infringement in case of non-compliance?

The sanction due to the non-compliance of the established limits will be a 25% of the infringement basis.  Said basis figure must be equal to the amount paid in cash, always providing that the transactions are of an equal or higher amount to 2,500.- Euros to 15,000.- Euros

As an example, a transaction between two parties which total of 10,000.- Euros has been paid in cash.  The sanction will be of a 25% on the payment in cash corresponding to 10,000.- Euros, which it could result in a sanction of 2,500.- Euros.

The above-mention sanction will expire within 5 (five) years, and this period will commence from the date the infringement was committed.

The Tax Office can absolve to any of the parties involved in case that it reports the payment in cash of the other party.  For such advantage, the complaint must be filed within 3 (three) months from the infringement of the improper payment.  The complaint to the Tax Office can be filed through the Tax Office website or personally at  any of the network branches of the Tax Office. (AEAT)