Bizum and the Tax Office: between fraud and privacy

One in five people in Spain prefers to pay in cash rather than using electronic means. That's low. In fact, it's the lowest percentage in Europe. This is according to [source missing]. a study by the consulting firm PwC Fresh out of the oven. And everything indicates that this trend can only grow, with the explosion in the use of Bizum and its future rollout on a European scale.

Now that I think about it, I only know a couple of people who prefer cash. One of them is in charge of digital banking at a large bank. "They know everything," she tells me, implying that it's not necessary for your own colleagues to have access to what you do or don't do. The other runs a small one-person business; she doesn't give me details, but I know she struggles to make it work. Same behavior, two different reasons: privacy and tax evasion—which is essentially another form of privacy, but with financial motivations.

Today, preserving privacy, even when there's little to hide, comes at a high price. Paying with a mobile phone—this inseparable appendage of our bodies—is so incredibly easy that it's incomparable to carrying around a lot of coins, counting them, or risking the shop not having change. When values like privacy are pitted against others like convenience and comfort, the latter almost always win. And if you don't believe it, just ask in the small shops on the street. That's why, of the one in five who pay in cash, I'd say few do so to preserve privacy. The remaining majority point to tax evasion.

But the change that the Treasury is imposing on companies and professionals at the beginning of the year is about electronic transactionsThis involves tighter control over payments and collections made through Bizum, a tool originally designed for peer-to-peer transactions but now widely used for business payments. The monitoring will shift from annual to monthly, based on the premise that more frequent reporting allows for greater oversight and response.

For those who are neither businesses nor professionals, a new control is also added if transactions on a credit or debit card exceed €25,000. This is a high threshold, but not excessively so. Bizum payments between individuals are excluded. This does not mean that the Tax Agency cannot request information from the bank in such cases. It is important to remember that electronic transactions are always recorded, and the fact that the Tax Agency does not have a specific form for declaring them or alerts triggered above certain thresholds is no guarantee against a potential tax audit.

The exact volume of tax fraud is unknown. However, we know that in 2024 the Spanish Tax Agency recovered almost €19 billion, but some experts suggest this is just the tip of the iceberg. If this were the case, the amount collected would allow for improvements to public services and even a reduction in the tax burden for those who comply.