CASH LIMIT DEPOSITS IN SPAIN
DO SPANISH BANKS IMPOSE ANY LIMITS ON HOW MUCH CASH CAN BE DEPOSITED OVER THE COUNTER?
Dear clients and readers,
We have recently received a new enquiry from a non-resident client. He has received an email from his Bank requesting specific clarification with regard to several cash deposits that the client apparently made into his bank account, for the amount of 2.000 euros each.
In the first place, we ought to inform you that Spanish banks are the main allies of the Spanish Tax Agency. The government office is mainly responsible for ensuring compliance with the Anti-Fraud Law, – which was reinforced last October with a new set of tax regulations. This reinforcement mainly involves a new surveillance system to ensure compliance with the new tax regulations. In fact, this means of revenue collection becomes even more critical and relevant in the midst of the economic recovery after the pandemic, hampered by the inflationary spiral that Spain, in particular, is suffering.
For this reason, the Treasury is keeping a close eye on customers’ bank accounts and transactions. Especially cash. The reason is that this is the most challenging way to track and still remains the preferred method despite the proliferation of digital channels. With the increasing use of applications such as Bizum, Google Pay or virtual banking.
THE TAX REVENUE OFFICE MONITORS CASH PAYMENTS BY IMPOSING A CASH LIMIT
Since July last year, the maximum limit for cash payments has been reduced to 1,000 euros, provided that one of the parties is acting as an entrepreneur or professional. This is one of the measures to prevent and combat tax fraud and has also led to a reduction in the maximum cash withdrawal limit to 600 euros as a general rule.
But not only can you be fined for not breaking the rules. In fact, The Tax Authorities also warn that certain transactions and operations. Such as payments, cash receipts and cash deposits, can lead to the dreaded investigation file being opened, which can ultimately result in a fine. Even if the reason for this is not punishable. It is enough if it is suspicious (or if there are indications of a crime). And the banking institutions, in close collaboration, can warn clients of this.
WHAT INCOME IS CONSIDERED SUSPICIOUS BY THE TAX AUTHORITIES?
a) Income of 500 euros note: In principle, this will not attract the attention of the Tax Agency unless the operation is carried out with a single 500 euro note. The so-called ‘Bin Laden’ notes due to their scarcity, which, although their mere possession does not obviously imply anything criminal, do arouse suspicion because they are closely related to the “underground economy”. It should be stressed that banks are obliged by law to notify the tax authorities of the who, what and how of an income containing this type of note.
So a regular cash deposit, of let’s say 1 single 500 euro note each time, would immediately “set off the alarm,” even if it is lower than the standard limit of 3.000 euros (please see below).
b) Income exceeding 3,000 euros: A cash deposit to a bank account above the threshold of 3,000 euros will immediately trigger the Treasury’s radar. And it doesn’t matter what banknotes are used. Even if they are ten or five-euro notes!
HOW TO CONTACT US FOR FURTHER SPECIFIC ADVICE?
We hope you find this information useful. Remember that this is not intended to be specific legal advice, just a general overview. As independent lawyers, we can help you both by assisting you with all property & banking issues as well as carrying out a comprehensive background legal analysis on your property or problem, if required.
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Finally, thank you very much for your attention, and in case you might have any questions or doubts at all, again please do not hesitate to contact us. We will be glad to help you!
We look forward to helping you and the benefit of our “know-how”.
Mr Oscar Ricor
“NON-PRACTISING ENGLISH SOLICITOR IN ENGLAND AND WALES”, under the “Solicitors Regulation Authority” (SRA) SRA number 519196 and practising Spanish Solicitor