Healthplan Spain


Holding Euro notes Cash Payment Limits In Spain Expat Tips

A recent Spanish law means that the limit on cash payments has now been lowered to just €1,000.

The Spanish government's goal is to eventually see the “permanent disappearance” of cash payments and therefore the new anti-fraud law, which was approved in 2020, has now come into force. By doing this, Spain will follow rules that are already established in other European countries.

On top of reducing the amount that you can pay in cash, the new law also controls the flow of cryptocurrencies.

The scrapping of large cash payments would result in transactions being better reflected in the accounts, making the detection of fraud much easier.

So what are the new rules, who will be most affected and what are the penalties you need to be aware of?

The new rules and exceptions to the rule

The new anti-fraud law (11/2021) was approved by the Spanish government in 2020 and finally came into effect on July 11, 2021. It establishes the limit on the amount of cash you are allowed to pay in one transaction.

The new law states that you are only allowed to pay up to €1,000 in cash, this has been lowered from the previous amount of €2,500.

This means that any payments above €1,000 that are made in a shop, shopping centre or to a business, will have to be paid by bank transfer or via a debit/credit card.

Spain’s official state bulletin states, “Transactions in which one of the intervening parties acts as an entrepreneur or professional, with an amount equal to or greater than € 1,000 or its equivalent in foreign currency, cannot be paid in cash”.

Payments between private individuals who reside in Spain will remain at a maximum of €2,500.

But when a payer is a person who justifies that he/she is not resident for tax purposes in Spain and that they are not acting as an entrepreneur or professional, “the above amount will be €10,000 or its equivalent in foreign currency.

It is also worth noting that if you rent in Spain, following the new Ley de Viviendas law on May 18, 2023, you are no longer allowed to pay with cash. All rental payments must be made electronically, although there are one or two exceptions to this rule. 

Can the payment be split between cash and card?

Many will wonder if they can split the payment between cash and card.

So for example, if something costs €3,000, can you pay €2,000 by card and €1,000 in cash?

The simple answer is no.

It is based on the total amount of the transaction. So if it exceeds €1,000 you will not be able to split the payment and will be in breach of the law.

The same applies to instalments. So if a tradesperson carries out a job for you and the amount comes to more than €1,000 you cannot receive separate invoices for instalment payments. If it comes to more than €1,000 you MUST pay via bank transfer or card.

Invoices must be added together to determine whether they exceed the €1,000 limit.

Who is it aimed at and who will it affect?

The new regulations endeavour to limit cash payments of large amounts of money. This is to stop money laundering and to make it tougher for people to work without declaring their income.

It is mostly aimed at the self-employed and smaller businesses, where it is not obligatory to present an income balance and also where a regular stream of cash flow is hard to keep track of.

It aims to flush out those who are not declaring cash payments and are therefore avoiding the payment of tax.

What are the penalties for making cash payments greater than €1,000?

Those who choose not to comply with the new law can potentially be imposed a fine of 25 per cent of the payment. The fine will also apply to both parties involved in the transaction.

If one of the parties denounces the other, they will not be liable to pay the fine.

A 50 per cent reduction will also apply if those who have been fined pay within a certain period eliminating the need for court action.

What are the current limits on cash payments in other EU countries?

In June 2021, the European Union imposed a new rule that anyone entering or leaving the EU with €10,000 or more in cash has to declare it to the authorities with other items such as gold coins and other gold products also coming into the equation.

Spain currently has one of the lowest limits on cash payments in the EU with other countries imposing similar limits.

Italy for example currently has a €2,000 limit, however, this will be reduced further to €1,000 like Spain in 2022.

France limits residents to make payments of no more than €1,000 which has been in force since 2015. There is also a limit of €15,000 for non-residents.

Belgium has a €3,000 which has applied since 2014 with Greece limiting its citizens to €500.

In Germany there is no limit on cash payments when purchasing goods or paying a business, however, if a payment of €10,000 is made in cash, the customer must provide identification. The trader must also document the surname, first name, place of birth, date of birth, home address and nationality of the buyer.

The UK does not currently have any limits on cash payments.

You can see all the limitations for other European countries here -