Payment with bank cards and bizum is becoming increasingly important in our country. The increase in online purchases and the change in habits produced as a result of the pandemic have generalized the use of plastic money. Even so, in certain sectors of society the habit of paying in cash is still deeply rooted, even in large amounts.
One place where the bill can easily run up to several hundred euros is the garage. Repairs as feared as breaking the timing belt or replacing the injectors can cost up to 2,000 euros at least. In cases like this, the most comfortable thing is to pay for the repair with the bank card. However, there are customers who prefer to pay the invoice in cash, either because the amount exceeds the limit of the card or because this is their usual payment method.
Cash payments in Spain are limited to an amount less than 1,000 euros. This is established by Law 11/2021, of July 9, on prevention measures and the fight against tax fraud. This is a measure promoted by the Tax Agency and approved by the Government of Pedro Sánchez to prevent operations that escape the control of the public treasury and do not pay what corresponds.
Before the entry into force of the aforementioned law, the maximum amount that could be paid in cash for a purchase or a service -such as that carried out by the mechanical workshop- was 2,500 euros, in accordance with Law 7/2012, of October 29, on the prevention of tax fraud.
Current regulations establish that operations in which any of the parties involved act as the owner of the company or professional cannot be paid in cash for an amount "equal to or greater than 1,000 euros (or its equivalent in foreign currency)". In the case of people who do not have tax domicile in Spain and are not professionals, this amount rises to 10,000 euros.
Therefore, a person residing abroad and who during their stay in our country has to take the car to the workshop may pay the bill in cash as long as the final price does not exceed 10,000 euros. Before the entry into force of the current law, this amount rose to 15,000 euros.
The Law specifies that the ceiling of 1,000 euros (10,000 euros in the case of people residing in other countries) affects the price of the product or service. This is an important point, since it means that the bill cannot be divided into smaller parts to circumvent the law. For example, if the repair of a breakdown amounts to 1,200 euros, the workshop is not allowed to issue two invoices for 600 euros each.
This measure is aimed at avoiding the picaresque of splitting the payment, so the total amount will have to be paid by card, bank transfer or other means in which the participants in the operation are recorded.
Failure to comply with the rule on the limitation of cash payments is an administrative offence. It affects both parties, buyer and seller or person who provides the service. Both are jointly and severally liable for said breach. The sanction of the Tax Agency may go against any of the two or against both.
The penalty established in these cases is 25% of the amount paid. As the limit is set at 1,000 euros, the fine starts at 250 euros and increases depending on the money that has been paid in cash.
However, if one of the two parties denounces the operation to the Tax Agency in the following three months, providing data from the service and from the other person involved, they will be released from the fine.
The Tax Agency offers the possibility of lowering the amount of the penalty through the prompt payment option and involves a discount of 40% of the fine. Likewise, it also offers the possibility of taking advantage of reductions of 30% for compliance and 65% for sanctions that derive from a document with agreement.
In addition, the Treasury allows deferring the payment of the fine to those people who prove that their economic situation does not allow them to pay the amount of the sanction. For this they must provide a certificate that proves it.
