With tighter controls on tax fraud and money laundering, financial institutions and tax authorities are monitoring cash transactions more closely than ever.
In this article, we explain how much cash you can deposit, the limits for doing so without justification and how to avoid issues with the Tax Agency.
How much cash can be deposited without justification per month?
In Spain, there is no legal limit on the amount of cash you can deposit in a bank, provided you can prove its origin. However, both banks and the tax authorities monitor transactions for unusual activity and may request documentation if necessary.
- Deposits up to €1,000: You can deposit up to €1,000 in cash without providing any justification.
- Deposits from €1,000: Under Law 10/2010 on the prevention of money laundering, banks are legally required to verify the client’s identity using a DNI or NIE for deposits of this amount or higher.
- Deposits of €3,000 or more: Banks usually report these automatically to the tax authorities. This is considered the “unjustified limit,” meaning the transaction may trigger alerts and require supporting documentation.
- Deposits of €10,000 or more: These are treated as high-risk for money laundering. Banks will request proof of the funds’ origin, such as purchase agreements, payslips or inheritance documents, and will notify the tax authorities.
- Deposits in €500 notes: Even small amounts in high-denomination notes can trigger alerts.
Below those amounts, you may also be asked to justify the source of the money if the income is frequent or unusual. Exceeding these amounts is not illegal, but the transaction will be more closely monitored.
How can I justify a cash receipt?
Justifying a cash deposit means providing documentation to prove the origin of the money. If requested by the bank or tax authorities, you must show evidence of your financial situation:
- Salary or pension: Payslips, company certificates or bank statements showing the payment.
- Accumulated savings: Documentation linking the funds to previous bank withdrawals and tax returns.
- Sale of an asset (car, property, etc.): Purchase agreements, receipts or invoices detailing buyer and seller, date and amount.
- Inheritance or donations: Wills, adjudication documents or notarial deeds. For donations, proof that tax obligations have been fulfilled is required.
- Loans received: Signed contracts showing date, amount and parties involved.
- Economic activity (self-employed/business): Invoices, receipts and accounting records proving the cash comes from declared sales or services.
- Other sources: Any valid documentation demonstrating the origin of the funds, such as subsidies or grants.
If the deposit matches your declared income on tax returns, there is no issue. Otherwise, it may trigger a tax audit.
Penalties for failing to justify cash deposits
If you cannot justify the income, the Tax Office may treat it as undeclared profit and demand payment of the taxes owed, plus a penalty ranging from 50% to 150% of the unpaid amount.
If the undeclared sum exceeds €120,000, the case may be considered a tax offence, with potential criminal consequences. In addition, the Tax Agency can notify SEPBLAC (the Spanish Financial Intelligence Unit) and open an investigation for possible money laundering.
Tips for depositing cash
To avoid problems when depositing cash at the bank, you should:
- Be transparent with your bank: If you plan to deposit an amount that doesn’t match your usual financial profile, explain the reason clearly and ask what documentation may be required.
- Keep supporting documents: Retain contracts, invoices, receipts and tax returns that can help prove the origin of the funds.
- Do not split large sums: Avoid breaking up large amounts into smaller deposits, as this can trigger suspicion due to repetitive patterns.
- Avoid keeping large amounts at home: Store only modest sums to reduce security risks and prevent attracting undue attention.
- Seek professional advice: For large or complex transactions, a qualified adviser can help ensure everything is handled correctly and avoid tax penalties.