The coronavirus pandemic has accentuated the feeling that cash already belongs to another era, but the truth is that there is still a sector of the population that prioritizes having the money (or part of their savings) at home rather than in a Bank. And in some cases the Treasury can investigate the origin of these savings to ensure that there is no fraud of any kind.
The agency is aware of any withdrawal or entry of money that involves the use of 500 euro bills, as well as any deposit into account that is greater than 3,000 euros. It is the banks that communicate this information to you, which may simply be recorded or be the beginning of an investigation.
This will depend on the Treasury itself, which if it does not see problems will let the matter pass. Only if the agency suspects the origin of these resources that we can have ‘kept under the mattress’ (with the possibility of returning them to the account if we wish after a while) can the investigations be initiated.
If this happens, the taxpayer must demonstrate that the origin of the money is legal. The simplest and safest way is to do it in the income statement, classifying it according to performance of work, economic activities, movable or real estate capital …
The possession of cash, if done in this way, is legal, does not require paying special taxes and, ultimately, does not represent any problem. The opposite happens when the money that is used to acquire a good or that is deposited in an account has not been previously declared. In these cases, it must be declared in the Income as an unjustified capital gain, but doing this ‘a posteriori’ may not be enough to avoid a fine by the Treasury for not having declared this amount on time, with the damage to the organism that it supposes.
Siege to the use of cash
Monitoring the use of cash is one of the battlefields in the fight against tax fraud, which links cash to the black economy, in accordance with its General Plan for Tax and Customs Control 2021.
This plan contemplates the greatest vigilance to the sectors in which this money is used the most, which is complemented by the draft law (still to be approved by the Senate after the ‘ok’ of Congress) in which cash payments were limited from 2,500 to 1,000 euros for professionals.
The intention of the Government is clear: to tighten the fence to these operations in order to help their “traceability” and hinder “fraud behavior”, as explained in the Recovery, Transformation and Resilience Plan sent to the European Union.