NEW LAW AGAINST TAX FRAUD PROHIBITS CASH PAYMENTS GREATER THAN € 1,000

THE LAW AGAINST TAX FRAUD PROHIBITS CASH PAYMENTS GREATER THAN € 1,000

 Law 11/2021, of July 9, on Measures for the Prevention and Fight against Tax Fraud prohibits cash payments of more than 1,000 euros, new parameters have been introduced in tax justice to help prevent and fight against tax fraud .

 CASH PAYMENTS GREATER THAN 1,000 EUROS ARE FORBIDDEN

 Since July 11, 2021, the Law on Measures to Prevent and Fight against Tax Fraud prohibits cash payments greater than 1,000 euros or its equivalent value in foreign currency, that is, anyone who exceeds by paying more than said amount or admit charges higher than this amount you face significant penalties.  Payroll payment is also considered an operation.

 The objective of these limits is to try to reduce cash operations, which are more difficult to track to avoid fraudulent situations, shadow economy and thus minimize tax fraud, so we approach a total control of money movements with the final objective that the Government has the traceability of all operations.

 Law 11/2021, point 1 of section 1: "Operations in which any of the intervening parties act as an entrepreneur or professional, with an amount equal to or greater than 1,000 euros or its equivalent in currency, may not be paid in cash. However, the aforementioned amount will be 10,000 euros or its equivalent in foreign currency when the payer is a natural person who justifies that he does not have his tax domicile in Spain and is not acting as an entrepreneur or professional ”.

 • Employers or professionals when they act as such cannot make cash payments.

 • Individuals with tax domicile outside of Spain who do not act as an entrepreneur or professional have a cash payment limit of up to 10,000 euros.

 • Among individuals, the limit for cash payments is 2,500 euros.

 PENALTIES FOR BREACH OF THE LIMITATION OF CASH PAYMENTS

 Law 11/2021, point 4 of section 2: "The basis of the sanction will be the amount paid in cash in operations of an amount equal to or greater than 1,000 euros or 10,000 euros, or its equivalent in foreign currency, depending on the case of each one of the assumptions referred to in number 1 of section One, respectively ”.

 Law 11/2021, point 5 of section 2: "The sanction will consist of a proportional pecuniary fine of 25 percent of the base of the sanction provided for in the previous number, unless there is a case of reduction of the sanction referred to in the number 5 of section Three of this article ”.

 The offense is classified as serious and is considered administrative and exceeding the limits for cash transactions will be sanctioned with a fine of 25% on the amount paid in cash.

 COMPLAINT OF CASH PAYMENTS

 Law 7/2012, denunciation of cash payments, if one of the parties involved in a commercial operation, whose cash payment exceeds the limit of 1,000 euros, denounces the other party, it will be exempt from liability, provided that it performs the complaint within three months from the date of the payment made.

 • The complaint must specify the operation carried out, the amount and the identity of the other intervening party.

 • The complaint that the other intervening party may present later will be understood as not made.

 • The simultaneous presentation of a complaint by both parties will not exonerate any of them from responsibility.