Cash isn't just cash in Spain... it's a business compliance issue.

Cash withdrawals in Spain: what you need to know about new reporting requirements if you're operating a business in Spain.

It’s essential to be aware of recent changes in financial regulations that could impact your operations in Spain.

As of early 2025, Spain has implemented stricter measures to monitor large cash transactions, aiming to combat tax evasion and money laundering.

While there is no legal requirement for individuals to notify the Agencia Tributaria (Spanish Tax Agency) in advance of withdrawing €3,000 or more, banks are now obligated to report such transactions to the tax authorities.

This means that while you don’t need to seek prior approval, your bank will inform the tax agency of significant cash withdrawals.

For withdrawals of €100,000 or more, it’s mandatory to declare the transaction using Form S1, and this declaration should be made in advance. 

Potential penalties for non-compliance

Failure to comply with these regulations can result in substantial fines. If a transaction is deemed suspicious or lacks proper justification, the Agencia Tributaria may impose penalties ranging from €600 to €150,000, depending on the severity of the infraction.

These fines are more likely in cases where there is evidence of tax evasion or money laundering. 

Implications for international businesses:

For international businesses operating in Spain, these regulations underscore the importance of maintaining transparency and proper documentation for all financial transactions. It’s advisable to keep detailed records and be prepared to provide justification for large cash withdrawals if requested by the authorities.

Best practices to ensure compliance:

- Maintain clear records: document the purpose and recipient of all large cash transactions.

- Consult financial advisors: seek guidance from professionals familiar with Spanish financial regulations to ensure compliance.

- Stay Informed: regularly review updates from the Agencia Tributaria and other official sources to stay abreast of any changes in reporting requirements.

While cash remains a valid means of transaction in Spain, the government’s increased scrutiny of large cash movements necessitates diligence and transparency.

By staying informed and maintaining thorough records, businesses can navigate these regulations effectively and avoid potential penalties. 

Need help demystifying Spanish compliance? Let’s talk.