The European Consumer Centre in Spain (ECC-Spain) recalls that - as of 11 July 2021 - transactions for an amount equal to or greater than €1,000 or its equivalent in foreign currency cannot be paid in cash when one of the parties is acting as a trader or professional. It should be clarified that the limitation applies to the transaction, not to the cash payment itself. For example, in a case where a transaction of EUR 1,100 is to be paid and we want to pay EUR 200 in cash, we would be in breach of the rule. However, it should be noted that this figure rises to 10,000 euros when the payer is a natural person who is not domiciled for tax purposes in Spain and is not acting as a businessperson or professional. In any case, these payments could not be made with bearer cheques or any other means of payment in which the parties involved are not identified, as this would be the same as paying in cash.
These limitations would not apply to payments and receipts performed at credit institutions, payment institutions and cash exchange operations carried out in currency exchange establishments open to the public. In these cases, identification may be required when money is to be paid in, which will always be compulsory when the amount is equal to or greater than €1,000.
If this type of payment is performed, both the payer and the recipient of the cash will be considered offenders, and will be jointly and severally liable for the possible penalty, which will be 25% of the amount paid in cash for the transaction in excess of 1,000 euros. It should be clarified that if, within a period of 3 months, one of the parties reports the transaction to the Agencia Estatal de la Administración Tributaria, the complainant will be exonerated from liability.
In this context, the Banco de España recommends that proof of payment for transactions exceeding the established limits should be kept for a period of 5 years from the date of the transaction, so that the method of payment can be accredited.
Source of information: Banco de España