According to the Bank of Spain, at the end of 2024, cash remained the most commonly used payment method in brick-and-mortar stores. Although its use has decreased slightly over the past year, 57% of Spanish customers report using it every day.

Despite their prevalence throughout the country, cash deals are less transparent than those that involve digital payment systems, which has led to the implementation of amount limits for physical money. Let’s examine how this could impact your business and what alternatives you need to consider.

What’s in this article?

• What is the limit for cash payments in Spain?
  
• What are the penalties for noncompliance with the cash ceiling?
  
• What is the Anti-Fraud Law?
  
• FAQs about the limit on cash payments in Spain
  

What is the limit for cash payments in Spain?

Since July 9, 2021, following the adoption of the “Anti-Fraud Law,” you can only pay cash amounts that are less than €1,000 (or its equivalent in other currencies) whenever at least one of the parties involved is a professional or company.

While it is true that in October 2012, Law 7/2012 set the maximum cash-based settlement at €2,500, Law 11/2021 reduced that ceiling to €1,000 nine years later. That said, it is worth noting that if a private customer makes the payment without a tax address in Spain, the limit increases to €10,000.

It is important to note that the cap applies to the overall value, regardless of whether the sum is paid in multiple installments or split across different tender options. To illustrate, if a product costs €1,200, it is not legal to pay €900 in cash and the remaining €300 with another payment method.

Authorities introduced these limits—and the penalties for exceeding them—to push businesses that accept in-person payments to promote electronic methods and simplify transaction tracking. For example, complete checkout platforms such as Stripe Terminal offer bankless card terminals that let you unify in one place the payments you’ve received in-person and online. This enables simpler accounting and ensures tax compliance. In addition, with the latest generation card readers—such as the S700 or the BBPOS WisePOS E—you’ll be able to accept both card payments and digital wallets, as well as other payment methods for mobile options, which 11% of Spanish customers already consider their primary in-store method.

What are the penalties for noncompliance with the cash ceiling?

A physical-money deal of €1,000 or more incurs a penalty of 25% of the overall sum paid in cash. This percentage is reduced to 12.5% if the penalized person meets three conditions:

• They pay the fine voluntarily, before the resolution of the case is reported
  
• They forgo submitting a plea
  
• They forgo any appeal through administrative means (in other words, they will only be able to appeal the fine through judicial means)
  

No matter the amount involved, both sides share joint responsibility for the sanction. The Spanish Tax Agency (AEAT) considers both the payer and the recipient offenders. It can demand the full penalty from either one, potentially requiring the other party to cover 50% of the total.

On the other hand, if one of them decides to report that they have received or made a cash settlement that exceeds the legal limit during the three months after the event, they will not have to accept any sanction if they specify the overall figure, the date of the transaction, and the identity of the other party. If both sides report, only the first one is valid; the second does not result in exemption and will be regarded as “unformulated,” for which reason that side can be penalized.

What is the Anti-Fraud Law?

To regulate various fraudulent practices, including “off-the-books” accounting often linked to cash use, Law 11/2021, also known as the Anti-Fraud Law, was enacted on July 9, 2021. To reduce the reliance of banknotes and coins in Spain and prevent illicit activity related to this type of payment, the AEAT has chosen to restrict the use of money.

The Anti-Fraud Law pursues other objectives, such as adapting Spanish legislation to European standards regarding tax evasion, encouraging electronic billing—along with the Create and Grow Law—and ensuring compliance with European Union requirements regarding invoicing.

This more proactive risk control and its related activities led to the AEAT collecting over €9.4 billion in fines in 2023, just one-and-a-half years after the approval of the Anti-Fraud Law.

FAQs about the limit on cash payments in Spain

Is the limit for cash payments in Spain the same as in the rest of Europe?

No, each country in the EU can establish its own cash ceiling. For instance, the limit in France is also €1,000, but in Portugal, you can pay up to €3,000 in cash. While in Germany, there currently does not exist any maximum amount for cash payments, Regulation (EU) 2024/1624 establishes that, starting in July 2027, no country in the EU can have a cap on notes and coins that is higher than  €10,000.

Is it possible to avoid the limit by paying less than €1,000 in cash for a higher transaction amount?

Splitting the sum between different tender options to stay under the cash cap is not allowed. In other words, the limit is applied to the total transaction amount, regardless of how the payment is split. As an example, if you acquire a €3,000 product  and make a cash settlement of  €500 and a bank transfer of €2,500, the deal violates the law, and you will have to bear the relevant penalties.

Is the limit on cash payments only applicable to the taxable amount?

No, the cash cap applies to the overall value—that is, the price of the goods or service plus the relevant value-added tax (VAT) rate. For instance, if a company sells a product whose taxable value is €900, paying for it in notes and coins would mean that it exceeds the authorized limit, since the total amount after adding the 21% VAT would be €1,189.