In the know: Spanish cash limits

The Spanish Tax Authority keeps a close eye on cash transactions, knowing the limits is essential if one is to avoid a hefty penalty

The Spanish treasury’s keenness stems from their mandate to clamp down on tax evasion and money laundering.

Many illicit dealings are carried out with cash, hence the Treasury’s attention to cash-based purchases and sales, and imposing limits on the amount that can be used in such transactions.

Despite these measures which are aimed to curb illegal activities, they can inadvertently trap totally innocent individuals, making it crucial to stay informed to avoid penalties from the authorities.

Cash Thresholds

Cash serves as the traditional means for commercial and financial exchanges, sidestepping the need for digital or electronic payment methods, and facilitating everyday purchases and transactions.

Legally, keeping cash at home doesn’t inherently lead to increased taxes or penalties. Nevertheless, the Tax Agency keeps a close eye on all cash transactions that fall under specific criteria, utilising a highly automated system for this purpose.

Article 93 of the General Tax Law obligates individuals and entities to provide the Tax Administration with data and documents of tax relevance, including those related to economic, professional, or financial interactions with others.

Rules on carrying and transferring cash

In Spain, while there’s no cap on cash transportation within the country, the law requires declaring any amount over €100,000 to discourage money laundering and terrorism financing.

For international travels to or from EU states, the declaration threshold is €10,000, irrespective of the travel method.

Payment caps and potential fines

The limit for cash payments stands at €1,000, aimed at combating tax fraud. Transactions exceeding this amount must be conducted through bank transfers.

Notably, both parties in a transaction surpassing this threshold risk fines amounting to 25 per cent of the cash amount involved, indicating penalties that can range from €250 to €2,500.

Countries like France and Italy have their cash transaction limits, and even Germany  which currently has no restrictions, is considering setting a limit of  €5,000.

The European Commission is also evaluating the potential for EU-wide restrictions, highlighting a growing trend towards monitoring cash use to prevent financial crimes.