The “Study on cash usage habits 2023” of the Bank of Spain shows that cash remains the payment method preferred in Spain, to maps and mobile devices, despite the growth in the use of these technologies. According to the study, 70% of respondents expect cash use to remain stable until 2025, particularly in sectors such as small businesses and hospitalitywhere this means of payment is essential.
According to this report, 65% of Spaniards use cash in their daily lives, and the majority (7 out of 10) use ATMs to obtain it, which makes it relevant to know the withdrawal limits established by Tax authorities. However, the species seems to be losing popularity among younger generations: 39% of those under 35 plan to reduce their consumption in the future, while among those over 64, only 16% plan to reduce their dependence on cash. This generational difference suggests a gradual evolution towards digital paymentsworn primarily by younger users.
The amount of cash you can have at home
The Bank of Spain emphasizes that there is no limit to the amount of cash that can be kept at home, provided that the origin of funds is legitimate and is duly declared to the Treasury. Although this practice is legal, the agency highlights the need to justify income and warns that the Treasury monitors bank transactions exceeding 3,000 euros, requiring in these cases a declaration of the origin of the money for avoid tax fraud.
The Bank of Spain suggests that the ideal amount for emergency situationsIt should cover between six and twelve months of basic expenses, including housing, food and transportation. However, he also mentions that this amount does not necessarily have to be physically present at home and recommends keeping the money in a liquid bank account.
Keeping cash at home carries some risks, due to both the risk of theft and depreciation caused by inflation. According to the calculations of European Fund Managers Association (Efama)an amount of 10,000 euros at home would lose almost 100 euros in value per year due to inflation.
Finally, even if the digital payments and banking transactions have grown in popularity, the Bank of Spain recognizes that many people prefer cash due to its accessibility. The organization advocates the use of cash for those who have limited access to other means of payment, emphasizing that the availability of cash at home is a personal decision that involves evaluating the both the advantages and the possible disadvantages.
Movements monitored by the Treasury
The tax administration has strengthened its monitoring of use of cash in Spain. Although it is legal to keep cash at home without a limit, certain movements can raise suspicion and trigger tax investigations. Banks play a key role in this process, as they must report unusual transactions, such as income or withdrawals above 3,000 euros, or movements in which 500 euro notes are used, as these could indicate possible fraudulent activities. To avoid problems with the Treasury, it is essential that citizens can prove the origin of their funds.
THE transfers over 6,000 euros They are subject to stricter control, since banks must notify these operations to the Tax Administration. Furthermore, according to regulations, transfers exceeding 10,000 euros require detailed justification.
Concerning the transport of cash, it is obligatory to declare amounts greater than 10,000 euros when entering or leaving the country, while the limit in national operations is set at 100,000 euros. Failure to report these transactions can result in penalties ranging from 2% to 25% of the total undeclared amount, with additional fines of up to 2,500 euros for cases exceeding 10,000 euros.
When it comes to digital payments, Bizum allows transactions of up to 1,000 euros per shipment, with an annual maximum of 10,000 euros which must be declared as income in the tax return. For freelancers, this type of income must also be declared for tax purposes, since the Treasury monitors digital transactions with the same rigor as traditional income.
THE Anti-fraud lawimplemented in July 2021, reduced the cash payment ceiling from 2,500 to 1,000 euros for commercial transactions between professionals and businesses, even if transactions between individuals are exempt. This limit includes the total transaction, so dividing the payment into several parts does not relieve you of the obligation to comply with the regulations. In the event of an irregular transaction, either party may denounce the other and be exempt from any sanction. Even a third party can file a complaint, leading to sanctions without notice.
THE fines In case of exceeding the cash payment limit, they reach 25% of the transaction. For non-residents and people not exercising a professional activity, the ceiling is 10,000 euros.
