ENTRY INTO FORCE FROM 11/07/2021 OF THE LIMITATION ON THE AMOUNT OF CASH PAYMENTS

New measures to prevent and combat tax fraud: limitation of cash payments.

 On Saturday 10 July, Law 11/2021, of 9 July, on measures to prevent and combat tax fraud, was published in the Official State Gazette (BOE). legal limitation in the amount of 1,000.00 euros for payments made in cash.

This measure applies where at least one of the parties to the transaction acts as a trader or professional, and therefore not where both parties act as private individuals.

Including payments made on invoices, salaries, dividends, interest, loans, etc.

The deliveries of goods or services with a value equal to or greater than €1,000.00 may not be paid in cash (including taxes), not even a part of the price. For transactions with a value of less than €1,000.00, they may be paid in cash in their entirety. For example, 3 invoices of 500 euros each (1,500 euros) may be paid in cash at the same time if they are independent transactions.

The rules state that all invoices relating to the same transaction must be added together to determine the limit. Whether or not several invoices are considered to relate to the same transaction is a matter of evidence.

In the event that the recipient of the delivery (customer) is a natural person acting as a private individual and provides proof that is not resident for tax purposes in Spain the limit per transaction operates from 10.000,00 euros.

In the event of non-compliance with the cash payment limitation, the parties responsible for the transaction will incur a administrative penalty and both the payer and the recipient of the infringement shall be jointly and severally liable. The administration may take action against any of them.

The amount of the penalty shall be 25% of the amount of the transaction that has been unduly paid in cash. However, if, after receipt of the draft decision and before receiving the final decision, the alleged offender makes voluntary payment of the penalty, the amount of the penalty shall be reduced by 50%.