Bank transfers have become one of the most widely used financial transactions in Spain. According to data from the Bank of Spain, these operations grew by 15.5% in 2022, reaching 1.416 billion transactions and a total volume of 5.4 trillion euros, accounting for 88.4% of the total value of cashless payments.
It is essential to know the limit of money that can be transferred to avoid fines from the tax authorities (Hacienda). Although there is no maximum legal limit for sending funds, every transfer must comply with anti-money laundering regulations and justify the origin of the funds.
Donations and Family Loans
A one-time financial help between family members, such as when parents give money to a child to cover a specific expense, can be interpreted in two ways by the tax authorities. If there is a genuine commitment to repay the amount within an agreed period, it is considered a family loan. In this case, it must be settled with the regional tax authority, although this settlement does not imply the payment of taxes.
A donation occurs when money is given as a gift or financial support with no intention of recovering it. For the tax agency to recognize it as such, it must be clearly documented in writing. If no return is expected, the operation is classified as a donation, which implies different tax obligations.
Under Spanish law, all donations are subject to the Inheritance and Donation Tax, the amount of which varies depending on the autonomous community, the amount transferred, and the degree of kinship between the parties. This increase has reinforced the attention of the Tax Agency, which especially monitors large money movements.
Even if they are one-time family financial aids, these incomes can be interpreted as concealed donations and be subject to the corresponding tax.
Possible Transfer Blocks
The Bank of Spain indicates that a financial entity can block a transfer while it verifies the identity of those involved or the origin of the funds. Financial institutions are obliged to strengthen controls on transfers over 10,000 euros, and they can inform both the Bank of Spain and the Tax Agency.
If the operation exceeds 100,000 euros, Form S1 must be presented, which is intended to declare large-volume movements to prevent money laundering. Additionally, the bank may request additional documentation when it detects operations that do not fit the customer's economic profile, especially if they exceed 50,000 euros or the destination is outside the European Union.
In these cases, anti-money laundering regulations allow freezing the funds 'until verifying the identity of the parties involved in the operation and obtaining the documentation that allows it to verify the existing relationship between the funds in the accounts and the professional or business activity of the same'.
Banks can also close accounts if the client does not provide the required documentation or does not respond to information requests. The lack of documentation can lead to fines ranging from 50% to 150% of the undeclared amount.
The General Tax Law confirms this: this is how tax sanctions are classified as minor, serious, and very serious. The Tax Agency can request explanations when the amounts are high or when it detects repeated movements considered unusual. These verifications seek to confirm the relationship between the funds and the professional or personal activity of the account holder.
