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

The coronavirus pandemic brought a boost to the use of digital payment to avoid unnecessary contacts and extra dangers of disease transmission, but the truth is that many people continue to pay in cash and even keep this money at home. Something known as ‘keep the money on the mattress’ and that may entail some other responsibility.

The first thing that the citizen should know is that in no case is it illegal to have money at home, nor does it require the payment of higher taxes, but one condition must always be met: being able to demonstrate the origin of these amounts and declare them before the Treasury in the form correct.

You must also be aware that the Tax Agency is aware of all money deposits or withdrawals of a certain amount: specifically, it is aware of those movements that imply the use of 500-euro bills or account deposits for amounts of 3,000 euros or more.

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

Thus, in all those movements of 500-euro bills that leave the citizen’s account to be deposited at their home, as well as the return of money stored at home over 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 do so in the Income Statement and according to its 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 siege of cash payments

In recent months, the Government has tightened the siege of fraudulent behavior that is sometimes linked to cash. In this context, after months of negotiation and parliamentary processing, he carried out measures to prevent and fight tax fraud by which the limits of cash payments were reduced.

Thus, all operations between nationals of which at least one part is a businessman or professional may not be made in cash for more than 1,000 euros (10,000 euros if collected from a foreign citizen). If the law is not complied with, the fine may be up to 25% of the amount caused by the infraction.

In the preamble of Law 11//2021, it is stated that “the use of means of payment in cash in economic operations notably facilitates fraudulent behavior, in its different manifestations”, something in which the mandate to the European Commission, which assured that the objective of this reduction of the cash payment limit was made with the intention of guaranteeing “the traceability of the money”.

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

Within these sectors, some closely linked to the use of cash stand out, such as the hotel industry, commerce, construction, real estate activities or the reform sector, for example, .