How the Treasury detects your cash: this is how you should declare it

Having cash stored at home seems like a vestige of the past, but nothing is further from the truth: despite the fact that with electronic payment methods and the push that the coronavirus pandemic has given to contactless payment, the truth is that Not a few people decide to keep certain amounts in their home to dispose of them in an emergency or simply not to deposit it in the bank.

All people who keep their money at home, which is sometimes known as having the money ‘under the mattress’They have every right in the world to do so. Store money in our home it’s not illegal or anything like that and simply requires a condition that also extends to the rest of our money: declare it properly in the Income Statement.

The procedure for declaring our money in the IRPF (Individual Income Tax) declaration is simple: it will only be necessary to record the origin of that money, whether from work income, economic activities, movable capital or real estate…

Failure to do so can put the citizen in real trouble. The Treasury closely monitors certain operations with cash, specifically all those that involve the use of 500 euro banknotes and all income and withdrawals in excess of 3,000 euros.

The mechanism is as follows: as soon as one of these operations takes place, the bank is obliged to notify the Treasury. The body, with the information provided by the entity, will make the pertinent checks and, in case of seeing any suspicious behavior, will begin an investigation into the origin of the money.

This is how cash is linked to the shadow economy

The main reason for these guidelines is the linking of cash to fraudulent behavior and the shadow economy, as detailed by the Tax Agency in the latest general customs control plans and, hand in hand, the Government through the approval of the anti-fraud law.

In fact, the Treasury has reported in its recent Annual Tax and Customs Control Plan for 2022 that “cash operations will continue to be the subject of attention once again by the Tax Administration”, with special attention to the sectors where it moves the most that money in cash: restoration, construction, hospitality, reforms…

Nor should we forget that, justifying itself in this link between cash and the underground economy, the Government approved last summer the reduction of the cash payment limit, which has gone from 2,500 to 1,000 euros for all operations in which professionals are involved (it remains at 10,000 if it involves foreigners), as established in Law 11/2021, of July 9.

In parallel, years ago Europe decided not to continue issuing 500-euro bills “taking into account the concern that bills of this denomination may facilitate the commission of illicit activities,” as explained by the European Central Bank to justify its decision. .