Saturday, 15th December 2018
FINANCE & INVESTMENT Article
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This Month's Magazine
Cash Payments

Cash Payments

Payments in cash are part of everyday life, but...

Payments in cash are part of everyday life for many self-employed individuals. However, the law sets limits to these payments.
Learning the rules can save us from getting fined.

Law 10/2010, April 28th for the prevention of money laundering and finance of terrorism states which are considered payments in  cash, namely:- the use of notes and coins, of any country, bank cheques and any other physical means conceived to pay as a nameless person.

Law 7/2012, October 29th, limits to 2500€ the amount of any transaction in which one of the parties is a business that can be paid
in cash.The same law includes a procedure by which the supplier (the recipient) can informs Hacienda of an illegal act, with the incentive that, if he reports it within three months after the payment he will be exempt from any responsibility.


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It is important to note that what determines the prohibition is the total amount of the transaction, not the amount actually paid in cash. In other words, if you received an invoice for 3000€ it would not be acceptable to pay 1000€ by wire transfer and the rest in cash.

However, in a case as the one mentioned, what constitute the base amount for the calculation of the fine is 2000€, the amount actually paid in cash.



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