The Administration has been fighting for a long time to bring to the surface what we have been calling the underground economy. On July 10, the Official State Gazette (BOE) published Law 11/2021 on the prevention and fight against tax fraud, which came into force on July 11, 2011. There are several new features of this new law that we will be analyzing, among them, the limitation of cash payments.
Let's focus now on one of the most likely to affect day-to-day business traffic: the limitation of cash payments.
The maximum limit for cash payments is reduced from the current 1,500 euros to 1,000 euros in transactions in which one of the parties is a professional or entrepreneur, for example the payment of payrolls.
while for individuals the limit is 2,500 euros. Beware that means of payment in cash, for the purposes of the Law, is not only the payment in legal tender, it is also the bank check and any other means, including electronic ones, to the bearer.
In addition, the limit for individuals, not businessmen, with tax domicile outside Spain is reduced from 15,000 to 10,000 euros.
Well, is it simply a matter of paying in installments?
Well, no! It would have been very easy to circumvent the rule. Let's keep in mind that splitting the payment of the same service or purchase does not comply with the rule. For the purposes of calculating the limit, the amounts of all the operations or payments in which it has been possible to split the payment must be added up.
The Tax Agency may request, for a period of 5 years from the payment made, supporting documents verifying that the rule has been complied with, both in terms of the amounts and the means used.
For the time being, only payments made to credit institutions are exempt from this rule, since they are also required by law to identify both payer and collector, and therefore, the fund is also performing delegated tax control functions.
Is there a sanctioning regime?
In case the rule still did not make its objective clear, it establishes that both the payer and the collector are jointly and severally liable.
The Tax Agency may impose a serious administrative sanction on one of the two or, if it considers it appropriate, on both, which will consist of 25% of the amount paid in cash in excess of 1,000 euros, without the payment of this sanction making it impossible to initiate any other type of action if it is detected that there are indications of money laundering.
To contribute to the cordiality of the citizens,
if one of the parties involved, payer or collector, reports the transaction no later than 3 months after it occurred, clearly identifying the amount and the other party, it will be exempted from liability.
leaving without effect a subsequent complaint from the other party. Therefore, be careful, depending on what type of business relationships can be a double-edged sword. Clearly, if both are denounced simultaneously, the liability is maintained for both parties without the possibility of being exempted from it under any circumstances.
At Confialia, we recommend that, even if you have invoices issued/received prior to the publication of the rule (over 1,000 euros), your payment should be made by bank if it is after 11/07.