Avoid fines for cash payment of more than 1000 euros

by admin
cash payments

MADRID – One thousand euros is the maximum amount that you can pay in cash as a professional according to Spanish law. The Spanish government wants to put an end to payment in banknotes and coins. Spain wants to get rid of cash flows as much as possible.

Freelancers and companies can therefore not make or receive cash payments if the amount is higher than €1,000 and the other party is also a self-employed person or a company. If you do, a sanction may follow. However, by reporting the payment in time, you can avoid a fine.

If you are self-employed or a company and you receive €1,000 or more in cash, you can avoid a fine if you notify the authorities. The Tax and Customs Administration reports this in its own official regulations.

Ways to avoid problems

The regulation of the Tax Authorities states that the self-employed person who indicates they have received more than €1,000 euros in cash from another party, is not liable to pay a fine. However, a tax return must be filed within three months after payment. In addition, they must report the total amount of the transaction and identify the relevant counterparty.

Consequently, if the other party later submits a notification about the same fact to the tax authorities, the last person who reports it will not be acquitted of a fine. However, in the event both parties file a report at the same time, neither will be exempted from the penalty.

How do you report a cash payment that is too high in Spain?

To report payment or collection between companies and professionals for more than €1,000, go to the official page of the Tax Authorities. Here you can follow these steps:

  1. Click on ‘Gestiones‘ (administration)
  2. Click on ‘Denuncia de pago en efectivo‘ (Cash Payment Reporting)
  3. Include the documentation relevant to the complaint
  4. Click OK

What is the fine?

If you have followed the above steps as a self-employed person, there will be no fine. The fine is calculated on the basis of the amount paid and is 25% of the cash amount paid. Therefore, if you accept a cash payment of €2,000, the fine will be €500.

However, 5 years after the cash payment of more than €1,000 euros between professionals and companies, this violation expires.

Limitation of cash payments

Cash payments have been further restricted in Spain to combat the large-scale black economy and fraud. Payments of more than €1,000 are not allowed when the transaction is carried out between professionals and/or companies. A private individual can therefore make a cash payment of a higher amount to, for example, a self-employed person. If the same freelancer’s activities are for another self-employed person or a company, the freelancer cannot accept the cash collection of those amounts.

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