If you often visit Spain or cross the border to shop, it is best to be aware of the new rules: Spanish legislation has become stricter regarding the use of cash and, in certain cases, it is no longer allowed to pay in notes or coins.
According to the Spanish newspaper Marca, control measures over physical money are increasingly tighter. The trend follows the advancement of banking digitalization and the growth of payments by card or mobile phone. Still, experts remember that total dependence on technology has risks, especially after recent incidents such as the failure of payment terminals and the computer blackout that affected the entire country just a week ago.
The law that limits cash
According to the same publication, Law 7/2012, approved to reinforce the fight against tax fraud, establishes clear limits for the use of cash in commercial transactions. One of the most curious rules is that no establishment is obliged to accept more than 50 coins in a single payment, unless it is a public entity, such as a State department.
But control doesn’t stop there. Law 11/2021, approved in 2021, reduced the maximum cash payment limit to 1,000 euros, even if the amount is split. Previously, this limit was 2,500 euros. According to the newspaper Marca, the objective of the change is to increase pressure on potential fraudsters and better control the flow of money in circulation.
The reason behind the restrictions
The main reason cited by the Spanish authorities is the fight against money laundering and tax evasion. By restricting the use of large amounts of cash, the State seeks to reinforce the traceability of operations and reduce the parallel economy. As the same source explains, anyone who exceeds the limit of 1,000 euros in cash may face a heavy fine from Finance, equivalent to 25% of the amount paid in cash.
These measures are part of a broader European effort to reduce the use of physical cash. The European Central Bank has been defending a more digital and transparent system, but guarantees that cash will continue to be a legal means of payment in the European Union, although each country can impose specific limits.
What changes for those traveling from Portugal
For those who live in Portugal and usually shop or eat in Spain, it is important to know that these limits also apply to tourists and foreign visitors. Even if you pay in euros, the limit of 1,000 euros in cash applies to anyone, including Portuguese citizens. Therefore, if you make a higher expense, you must pay by card or transfer.
According to the newspaper, this measure is fiscally strict and aims to avoid suspicious operations, but in practice it has raised doubts among small traders, who complain about the complexity and risk of fines in case of non-compliance.
And in Portugal, what does the law say?
In Portuguese territory, the limits are similar, but slightly more permissive. The Tax Authority determines that cash payments equal to or greater than 3,000 euros cannot be made between companies or individuals residing in Portugal. In the case of transactions with non-residents, such as foreign tourists, the limit is 10,000 euros.
Portuguese rules follow the same principle: making it difficult to use large amounts of cash to prevent money laundering and tax evasion. However, Portugal still allows cash payments in higher amounts than Spain, which makes the latter one of the most restrictive jurisdictions in Europe in this regard.
In short, anyone traveling to Spain should remember that paying in banknotes can be expensive. Even within the European Union, the rules vary and, in this case, the card is the safest way to avoid unexpected fines.
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