Self-employed: how to apply the rules of cash payments in the rents of premises

On July 11, Congress approved the Law 11/2021, of measures of prevention and fight against tax fraud, which, among other aspects, sets a new limit for cash payments made in operations in which an entrepreneur or a self-employed professional participates.

Therefore Declarando, the online platform for tax advice for the self-employed, clarifies in the latest installment of its Legal Observatory how these professionals should apply the new regulations of cash payments in the case of rented dwellings and premises.

The text places at 1,000 euros the maximum for transactions in which one of the parties (payer or creditor) acts as an entrepreneur or self-employed professional. This circumstance also applies to operations in which both parties are Spanish or foreign entrepreneurs or self-employed professionals.

Likewise, the law raises the limit up to 10,000 euros to carry out cash operations in which the payer is an individual who can duly accredit that it does not have its fiscal domicile in our country.

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“It is important to point out that the maximums contemplated by law refer to operations, but these cannot be divided. That is, if the total payment is 2,500 euros, this amount cannot be paid in cash in any way, or by paying 1,000 euros and the rest by card, or by any other method “, explains Marta Zaragozá, CEO and co-founder of Declarando.

How the law affects when paying or collecting the rent of houses or premises

If these limits are extrapolated for cash payments to the land of the premises or rental housing, Declarando underscores the importance of differentiating the purpose of those rentals.

1- Rent of habitual residence

In the case of operations that refer to the payment or collection of the rent of the habitual residence between individuals, the new Law against tax fraud will have no effect. In this case, the most common is that the relationship occurs between individuals, since for this type of lease It is not necessary to be registered in an economic activity. Therefore, since a professional or entrepreneur does not participate, there is no limit to the cash transaction.

This same situation is applicable if the payment is made through an intermediary, such as a property manager. The contractual relationship continues to be between two individuals, even if they use a third party to make the payment, so the cash limit should not be applied either.

2- Rental of premises for professional purposes

In the case of renting a premises to carry out and carry out a professional activity, the maximum set by the new law must be applied if you want to make a payment or collection in cash. In a situation, as it is necessary for either of the two parties to act as an entrepreneur or self-employed professional, the law prevents exceeding 1,000 euros, unless the payer is a person with tax residence outside of our country, in which case the limit it will be 10,000 euros.

3- Applicable sanctions

The sanctioning regime contemplated by law in the event of making improper cash payments is 25% of the total amount paid. In addition, the sanction will be applied to the recipient of the money and the payer, unless one of the parties denounces it within three months of the transaction, in which case the complainant will be exempted from all responsibility.

Declarando’s lawyer specialized in tax law clarifies this assumption: “If the total paid has been 2,500 euros, the penalty will amount to 625 euros, which must be paid by both parties, unless one of them denounces it within the indicated period “.

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