Current considerations regarding payments in cash in Spain
The Bank of Spain reported (since July 11th, 2021) that operations of an amount equal to or greater than 1,000 euros or its equivalent in foreign currency cannot be paid in cash, in the case of payments in which any of the parties act as an entrepreneur or professional.
This limitation also applies to the operation, not to the cash payment itself: That is, if we have to pay a transaction of 1,100 euros and pay in cash 200, we would be breaking the rule. On the other hand, the limit rises to 10,000 euros in the event that the payer is a regular person who justifies that does not have tax domicile in Spain and does not act as an entrepreneur or professional.
In addition, this limitation is not applicable to payments and deposits made in credit institutions, in payment institutions and currency exchange operations in cash carried out in currency exchange establishments open to the public.
The Bank of Spain also recalled that in this type of operations are considered infringers both the payer and the one who receives the amount in cash, and jointly and severally liable for the penalty that will occur, which will be 25% of the amount paid in cash for the operation that exceeds the amount of 1,000 euros.
However, in the case in which one of the parties, within three months after payment, reports to the State Tax Administration Agency: the operation carried out, its amount and the identity of the other intervening party, the complainant will be exonerated of responsibility.
Finally, the Bank of Spain also reported that checks made to bearer, as well as any other means of payment in which the parties are not identified, are considered cash.