The Electronic Cash Registers Acct has been adopted and published in the Collection of Laws on 15 April 2016 (as Act No. 112/2016 Sb.), jointly with accompanying Act No. 113/2016 Sb. The obligation to introduce electronic cash registers (ECRs) is divided into stages by the type of payments received by taxpayers in their businesses. On 11 May, the Financial Administration published a technical specification intended for software developers on its official website www.e-trzby.cz for the development of or adjustment to cash register equipment.
The ECRs will be introduced in four stages:
- Accommodation and catering services – From 1 December 2016 (NACE code 55: 55.1, 55.2, 55.3, 55.9, and code 56: 56.1, 56.2, 56.3)
- Wholesale and retail – From 1 March 2017
- All other activities excluding those listed in stage 4 (below) – From 1 March 2018
- The following manufacturing activities and trades – From 1 June 2018:manufacture of textiles, manufacture of paper and paper products (NACE 13-17), manufacture of soap, detergents and perfumes (NACE 20.4); manufacture of rubber and plastic products (NACE 22 and 23); manufacture of fabricated metal products, except machinery and equipment (NACE 25); manufacture of furniture (NACE 31 and 32); repair and installation of machinery and equipment (NACE 33); specialised construction activities (NACE 43); repair of computers and personal and household goods (NACE 95); other personal service activities (such as hairdressing) (NACE 96).
What is important for the practice is that the duty to register a payment arises depending on the specific type of the sales, not on the taxpayer’s line of business. The types of sales are determined based on the NACE classification system. In some cases, this will differ from the assessment for calculating the tax base for VAT purposes, typically in some catering services.The ECRs will apply to a wide range of payments received in cash, including payment cards, luncheon vouchers, etc., and will not apply to income not subject to tax, random income (such as the sale of corporate assets), income subject to withholding tax and rental income (excluding income from business activities). The exceptions will also include regulated entities, such as financial institutions, funds, energy companies, and water and wastewater management companies. Income from independent vending machines and public toilets will be permanently excluded from the ECR obligation.
Others will be imposed with the following obligations by the introduction of ECRs:
- Requesting the tax administration for authentication data (for registration in the system);
- Purchasing an ECR device connected to the Internet (or adjusting the existing accounting system and cash register; and
- Registering each payment/sale received (which means sending information about a specific income, receiving a transaction code and stating the code on the receipt).
It may seem that the obligation to register sales is still far away, as stage 1 will only begin on 1 December. However, it is advisable to check your accounting or cash systems now and consider how the registration should be taken care of. There are many technical solutions, but some of them, particularly those which are more complex and tailored to your specific business, might take some time for the supplier to deliver. In addition, suppliers might be flooded with requests from other businesses, so you could get into trouble if you do not get ready in time. Also, clients who are going to engage foreign IT centres should begin with technical preparations as soon as possible.
Just as any other act, the Electronic Cash Registers Act has some pluses, specifically:
- It introduces a personal income tax relief of up to CZK 5,000 for a taxpayer who registers their income under the ECR Act in a period for the first time;
- It reduces the VAT rate on catering services to 15% (starting from 1 December 2016, save for alcoholic beverages and tobacco products).
We are preparing a seminar on the electronic cash registers. Follow our newsletters and do not miss a highly topical workshop.
If you have any questions regarding the electronic cash registers, please do not hesitate to contact us. We will be happy to help.