Details of the cash regulations from 2020

The Federal Ministry of Finance has regulated details of the new requirements for electronic cash registers that will apply from 2020.

Under the Cash Register Act, companies with electronic cash registers or cash register systems are required to equip them with a certified technical security device (tSE) from 2020. In addition, businesses must report the acquisition or decommissioning of cash registers to the tax office and observe other new requirements for cash register management.

In the summer, the Federal Ministry of Finance finally published the long-awaited detailed regulations on the amendment to the law. This means that cash register manufacturers can prepare their devices, even if there is hardly any time left for a timely changeover. At least there is one piece of good news: the law does not include an obligation to use electronic cash register systems. This means that manual records can still be kept, for example, at weekly markets, festivals, farm stores and the like.

• Recording systems: The new requirements apply to electronic recording systems with a cash register function. This is the case for a device if it can be used to record and process at least partially cash payment transactions. This also includes electronic forms of payment used on site (cash cards, virtual accounts, bonus point systems, etc.) as well as vouchers, credit cards and the like. A storage facility for the cash managed (e.g. cash drawer) is not required. Pure accounting systems are therefore not considered to be recording systems within the meaning of the Cash Act.

  

• Safety device: As of January 1, 2020, electronic cash registers and recording systems must have a certified tSE that guarantees the completeness and immutability of the recorded business transactions. Interconnected devices can also share the same tSE. The tSE must not only record all business transactions in the POS system in a tamper-proof manner, but also other transactions (training bookings, immediate cancellations, terminations, etc.). If the POS system cannot be retrofitted but meets the previous requirements and was purchased between 2010 and 2019, it may continue to be used until the end of 2022. The existence of these requirements must be proven.

• Failure: If a tSE fails, the downtime and reason must be documented. This can also be done automatically by the POS system. If the system can continue to operate without the tSE, this failure must be evident on the document. If the failure only affects the tSE, the POS system can continue to be used until the reason for the failure has been eliminated. However, the entrepreneur must immediately remedy the cause of the failure or take measures to eliminate it. The obligation to issue receipts shall continue to apply during the failure and shall only cease to apply in the event of a complete failure of the POS system or in the event of a failure of the print or transmission unit. If only the print or transmission unit for the receipt fails, the POS system must continue to be used.

• Document issue requirement: From 2020, anyone who records business transactions using an electronic cash register system will be required to issue a receipt for the customer. The receipt can be provided electronically or in paper form. However, the receipt issue requirement only applies to business transactions involving a third party. Withdrawals, deposits and the like are therefore not affected. The receipt must be issued immediately after the transaction has been completed.

• Document Scope: The minimum information on a receipt is regulated independently of the VAT requirements for an invoice. If it is not necessary to issue an invoice, a document must still be issued that contains at least the following information: Full name and address of the entrepreneur, document date and time of the beginning and end of the transaction, quantity and type of goods sold or scope and type of service provided, the remuneration and the tax amount due on it in one sum as well as the VAT rate or a reference to an applicable VAT exemption, the amount per payment method and finally the transaction number, the signature counter, the verification value as well as the serial number of the electronic recording system or security module.

• Electronic receipts: The customer's consent is required for electronic provision of the receipt. Regardless of the receipt by the customer, the electronic receipt must be provided in any case. However, the visualization of a receipt on a screen of the seller (cash register display, etc.) alone is not sufficient. The receipt must be provided in a standardized file format (JPG, PNG, PDF, etc.) so that retrieval and display at the customer's site is possible using free standard software.

• Paper receipts: When issuing paper receipts, the offer of acceptance to the customer is sufficient if the receipt has been previously created and printed. There is no obligation for the customer to accept the receipt or to keep paper receipts that have not been accepted.

  

• Exemption: In the case of sale of goods or provision of services to a large number of unknown persons, exemption from the obligation to issue receipts is possible upon application and with the consent of the tax office. However, the exemption can only be considered if the obligation is associated with a material or personal hardship for the business. The costs incurred alone do not constitute a material hardship. The granting of the exemption also does not release the entrepreneur from the customer's entitlement to the issuance of a receipt.

• Storage: The data created by tSE can indeed be transferred from the POS system to an archiving system and deleted in the POS system. In this case, however, the data must continue to be preserved in its entirety together with logging data for archiving and must be exportable in the prescribed form during the retention period. In the event of a tax audit, the data must be made available.

• Reporting requirements: Anyone who uses electronic cash registers or recording systems must report any acquisition or decommissioning to the tax office. This also includes the destruction or loss of a cash register. In addition to the name and tax number of the company and the date of acquisition or decommissioning, the content of the report must also include information on the type of tSE and the type and number of electronic recording systems used and their serial number(s). In addition, the cash registers must be clearly assigned to a permanent establishment in the report if the company has several permanent establishments, and a separate report is required for each permanent establishment. The tax authorities use this information, among other things, when selecting cases for external audits.

• Reporting Deadline: The notification must be made within one month of acquisition or decommissioning on the officially prescribed form and must actually be made up by January 31, 2020 for POS systems acquired before 2020. So far, however, the tax authorities have not yet published the form and are simultaneously working on an electronic reporting procedure. Until this is available, the tax authorities therefore want to grant companies a delay in the reporting obligation.

• Sanctions: If violations of the new obligations are detected, they can be punished as a tax offense with a fine of up to 25,000 euros, even if no tax loss has been incurred. The only exceptions to these draconian penalties are violations of the duty to notify and the duty to issue receipts. However, this does not mean that the tax office cannot impose other sanctions for violations of these two obligations.

Anyone who still uses a cash register that does not meet the current requirements of the tax authorities from 2020 onwards risks additional tax assessments and further hassle in the event of an audit. There is still time for a changeover. When purchasing a new cash register, the new requirements should be explicitly taken into account - either by making full use of the transition period for cash registers that cannot be retrofitted or by purchasing a cash register that meets the requirements or can be retrofitted.