Tax authorities has the obligation to control the movement of money in Spain, including cash gifts, such as the Christmas bonuswhether at work or between family members such as father and children. Although it can be said that in the 99% of cases nothing will happensince sometimes the amounts are so small that the Tax Agency will not pay attention. Now, there are certain amounts that may raise the suspicion of the Treasury, but that does not mean that it is bad, although it does mean knowing why and how to act. You should know that both banks and banking entities are obliged to inform the Tax Agency (AEAT) about any operation that may seem suspicious, with the aim of preventing illegal activities such as tax fraud or money laundering.
The Treasury does not establish a specific limit for cash payments such as the bonus, but you can investigate any operation that you detect as irregular or that lacks justification appropriate. In this sense, the obligation of financial entities to inform the Treasury about suspicious transactions is regulated in article 93 of the General Tax Law (can be seen and consulted in this Official State Gazette), in order to prevent tax fraud and illicit activities. This point is important and we must be aware of what is allowed and what is not, since it is not possible to use the excuse of “I didn’t know“, since article 6.1 of the Civil Code clearly establishes that “ignorance of the laws does not excuse compliance with them”, which implies that not knowing a law does not exempt you from complying with it.
Now, about receiving cash in the form of a bonus. In what cases can the Treasury fine you? Well, the answer is the regulations that regulate this type of acts, being Law 7/2012, of October 29.
Maximum Treasury amounts on cash
Law 7/2012 is the norm that regulates the limits for cash payments as part of its fight against tax fraud. Thus, the The limit for cash payments is 1,000 euros when at least one of the parties acts as a businessman or professional, and rises to 2,500 euros if they are transactions between individuals.. Exceeding these amounts could raise suspicions before the Treasury, which has the power to investigate the origin of the money and the payment conditions. The situations for which you can receive a bonus can vary, both personal and professional, being the following:
- At work: If the company or employer gives a bonus, it must be reflected on the worker’s payroll. This payment is subject to personal income tax withholdings and Social Security contributions. Failure to comply with the regulations can lead to fines and sanctions from the Treasury, even if it is delivered as cash.
- Deposit into a bank account: If the bonus received in cash is deposited into a bank account, banks must report movements equal to or greater than 3,000 euros to the Treasury. This does not mean that the Treasury sanctions nor that it should investigate it 100% of the time, but it is possible that it will put a magnifying glass on these operations if they are unusual or the origin of the money is unknown. Be careful, you can also investigate if the amounts are less than 3,000 euros and raise suspicion.
- Individual cash gift: in transactions between individuals (for example, family gifts), the cash payment limit is 2,500 euros. Exceeding this amount could raise suspicions from the Treasury, especially if it is not justified as a donation or the corresponding documentation is not presented.
Knowing this, would the Treasury fine me if I received 50 euros as a bonus from a parent or child? No. Now, there may be the hypothetical case that a family member makes a gift of 500,000 euros, since in this case, we would have to comply with the regulations and pay the corresponding taxes, whether it is a gift or a donation.
Treasury fines
If the Treasury detects recurring cash income without justification, such as an undeclared bonus, it could consider it as undeclared income. In this case, said income would be subject to the Personal Income Tax (IRPF), regulated in Law 35/2006, of November 28.
In the event that the Treasury detects an irregularity that is considered an infraction, the Treasury could impose sanctions of at least 50% of the undeclared amountin accordance with the provisions of the General Tax Law. Furthermore, if the bonus was received in the workplace and was not reflected in the payroll, the employer could be sanctioned for not complying with its tax obligations. This includes the obligation to declare the payment on the payroll, make personal income tax withholdings and pay Social Security contributions.