This is how the Treasury detects your cash ‘under the mattress’: this is the way to declare it

The coronavirus pandemic brought a push to the use of digital payment to avoid unnecessary contacts and extra dangers of transmission of the disease, but the truth is that not a few people continue to pay in cash and even keep this money at home. Something that is known as ‘saving the money on the mattress’ and that may entail some other responsibility.

The first thing the citizen should know is that in no case is it illegal to have money at homeNor does it oblige the payment of higher taxes, but a condition must always be met: to be able to prove the origin of those amounts and declare them to the Treasury in the correct way.

You should also be aware that the Tax Agency is aware of all income or withdrawals of money of a certain amount: specifically, it is aware of those movements that involve the use of 500 euro banknotes or account receipts in amounts of 3,000 euro or more.

It is the responsibility of the banks in which these movements take place to notify the Treasury. The body, with the information in its possession, is in charge of not acting or, on the contrary, initiating an investigation. It all depends on whether the Tax Agency perceives any suspicions as to the origin of the money but, in all cases, it is aware and informed of the operation.

Thus, in all those movements of 500 euro bills that come out of the citizen’s account to be deposited at their home, as well as the re-entry of money stored at home above 3,000 euros, the Tax Agency is informed.

This is the reason why the taxpayer is obliged to correctly declare the money and its origin. It will in the income statement and according to their origin: income from work (if the worker withdraws money from his payroll, for example), income from economic activities, income from real estate capital, income from movable capital …

This is the government’s fence on cash payments

In recent months, the government has tightened its fence on fraudulent behavior that is sometimes linked to cash. In this context, after months of negotiation and parliamentary processing, it carried out Law 11/2021, of July 9, on prevention and fight against tax fraud, which reduced the limits on cash payments.

Thus, all operations between nationals of which at least one part was an entrepreneur or professional they cannot be made in cash for more than 1,000 euros (10,000 euros if charged from a foreign citizen). Failure to comply with the law, the fine can be up to 25% of the amount of the infringement, as reported by the Bank of Spain.

In the preamble of Law 11 // 2021, it is stated that “the use of means of payment in cash in economic operations remarkably facilitates deceptive behaviors, in its various manifestations, “something that had already resulted in the Recovery, Transformation and Resilience Plan sent to the European Commission, which ensured that the objective of this reduction of the cash payment limit was done with the intention of guaranteeing” the traceability of money “.

All these declarations of intent come, in short, to corroborate what the Tax Agency already announced at the beginning of 2021 when it published its General Tax and Customs Control Plan, in which it focused on the “sectors and business models in which that the levels of the underground economy can generate a special social perception “due to the use of cash in amounts higher than those established by law.

Within these sectors, some are closely linked to the use of cash, such as hotels, commerce, construction, real estate activities or the reform sector, for example, according to the specialized portal. Freelancers and Entrepreneurs.