Payments for Bizum: do you have to declare them in the 2021 Income?

As you know, from April 6 to June 30 the period is open for the statement of income. And among the many doubts that arise for the taxpayer, from TaxDown they share with us one in particular that is giving a lot to talk about: Is it necessary to declare the income received by Bizum?

The quick answer is no. But it depends.

And the long answer is the one we show you below. Keep reading because this interests you!

3 cases in which the Bizum must be declared

As a general rule, must the income received by Bizum be declared? If we talk about its most common use which is sporadic payments between friends, the answer is a NO resounding In the eyes of the Treasury, these types of transactions are considered as bank transfers without further ado.

But (there is always a but) yes, the income obtained by Bizum should be declared in these three specific cases:

1. Self-employed

If you are self-employed and receive your payments through Bizum, YES you would have to declare them. And it is that the use of Bizum within this group is becoming more and more frequent and this, in the eyes of the Treasury, is interpreted as a economic benefit derived from a professional activity. Therefore, no more, no less, should be declared.

In the case of payers, there is no obligation to declare it. But it is recommended to do so if there is the possibility of deducting expenses.

How is the income obtained as a self-employed person through Bizum reflected in the income tax return? Taxing them as income from economic activities, as well as any income received by bank transfer.

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In the case of the self-employed, there is a small problem in the use of Bizum, and that is that Personal and professional income can overlap in the same account. In that case, in order to declare them, valuable time would have to be wasted differentiating each personal and professional transaction in order to know what figure should finally be reflected. To avoid that problem, We recommend having two Bizum accounts: a staff for transactions with family and friends; and one professional for payments derived from economic activity.

2. Profitable income

If you are not self-employed but yes you receive recurring amounts of money which mean true cost effectiveness, yes they should be declared provided that they exceed €10,000 per year. We are talking, for example, of those people who own a parking space or a storage room (or even an apartment!) that they put up for rent and whose income is received through Bizum.

3. Transactions over €10,000

In general, the Treasury establishes that any payment made through Bizum, whether personal or professional. cannot exceed €10,000 per year. And, if he exceeds them, that person is obliged, in theory, to declare it.

And if I don’t declare it, are there penalties?

All transactions made with Bizum, from the smallest to the largest, are interpreted as Bank transfers and may be subject to inspection by the Tax Agency.

But you will only have to worry if you pass the limit set by the Treasury that we have previously mentioned: the famous €10,000. If all the transactions you have made through Bizum during that year exceed this figure, you could receive an unexpected visit from the Treasury. And if that is the case… make sure you have declared it and have all the documentation at hand!

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If you do not declare it, you may receive a sanction. The ‘good’ part is that these types of infractions are not too serious, and you should pay a fine that would reach 20% or 30% of the surcharge plus interest.

TaxDown has created a tool with which you can make your income statement automatically and with just the press of a couple of buttons. Thus, you will be able to avoid possible sanctions that the Administration may impose on us or, worse yet, lose money. And in the face of such a tedious process, it is better to have the help of professionals who can advise us throughout the process, so that the income statement stops being torture and you can finish it in the blink of an eye.

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