Spanish Tax Agency introduces new controls on high-value card payments

by Lorraine Williamson
Spanish Tax Agency

In an effort to modernise tax controls and combat fraud, the Spanish Tax Agency has announced a new regulation requiring additional reporting for high-value card transactions. Starting in 2025, financial institutions will be obligated to report detailed information on transactions exceeding a certain threshold.

This initiative forms part of the government’s broader strategy to ensure compliance with tax obligations and promote fairness in public financing.

New Royal Decree for tax modernisation

The Spanish government is preparing a Royal Decree that will impose new information obligations on financial institutions. According to Información.es, businesses issuing credit cards, debit cards, or other payment methods will need to submit detailed reports about their customers’ transactions.

The regulation aims to enhance transparency in financial activity. This is particularly in response to the growing digitisation of payments and the challenges posed by globalised economic transactions.

Key reporting requirements

The Royal Decree introduces two key reporting mechanisms:

Annual reporting

Card issuers must submit an annual declaration detailing all transactions exceeding €25,000 per cardholder within a calendar year. Reports must include:

  • Cardholder identification
  • Total charges on the card
  • Total amount of card payments
Monthly reporting

In addition to the annual report, financial institutions will need to file monthly reports covering payments made by entrepreneurs or freelancers. This includes transactions processed through credit cards, debit cards, or digital payment platforms like Bizum and PayPal.

Purpose of the regulation

The primary goals of this measure are to:

  • Prevent tax fraud and money laundering.
  • Adapt to the increasing use of digital payments.
  • Ensure accurate tax reporting in a globalised economy.

By introducing these controls, the Tax Agency aims to improve tax collection while supporting the funding of essential public services such as healthcare, education, and infrastructure.

Approval process and implementation timeline

The draft Royal Decree is currently undergoing a public consultation phase. Once this stage is complete, it will be reviewed by the Spanish Council of State (Consejo de Estado), which will issue a mandatory report. Following this, the Council of Ministers is expected to approve the decree.

The regulation is set to take effect in 2025, with the first annual reports due in 2026, covering financial activity from 2025.

Implications for businesses and individuals

The new controls will require businesses issuing payment cards to enhance their reporting capabilities. Financial institutions must prepare to comply with both annual and monthly reporting requirements.

For individuals and entrepreneurs, the measure underscores the importance of maintaining accurate financial records, particularly for high-value transactions. While aimed at curbing fraud, the regulation also highlights the growing scrutiny of digital payment methods.

The introduction of these reporting requirements reflects Spain’s commitment to modernising its tax system and addressing the challenges of a digital economy. By increasing transparency in high-value transactions, the Spanish Tax Agency seeks to ensure fairness and compliance while safeguarding public resources.

As the regulation progresses through the approval process, both businesses and individuals are encouraged to stay informed about their obligations under this new framework.

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