Obligation to report electronic cash register systems by July 31, 2025 and proper cash register management
Obligation to report electronic cash register systems by July 31, 2025 and proper cash register management
Businesses that are obliged to use electronic cash register systems or use them voluntarily must report them to the tax office by July 31, 2025.
Originally, the reporting obligation for electronic cash register systems was to apply from 2020. However, this was postponed several times. Since 01.01.2025, however, reporting has been mandatory and can be done via the tax authorities' "My ELSTER" portal.
I. Background to the reporting obligation
With the "Act on Protection against Manipulation of Digital Basic Records" of December 22, 2016 and the new introduction of Section 146a of the German Fiscal Code (AO), companies were obliged to equip their electronic recording systems with a certified technical security device (TSE) from January 1, 2020. There was a transitional period for this until January 1, 2023, after which all cash registers, PC cash registers and app cash registers must have a technical security device.
Cash registers that were purchased after November 25, 2010 and before January 1, 2020, but which cannot be upgraded with a TSE due to their design so that the requirements of Section 146a AO cannot be met, may be used until December 31, 2022 subject to further conditions.
The obligation to equip an electronic recording system with a TSE is intended to prevent manipulation of the basic digital records. At the same time, an obligation to issue receipts was introduced, which makes it easier to detect manipulation by comparing receipts with the digital records of the cash register software.
II. Fundamentals of proper cash management
a. General principles
In the case of paper and electronically created books and records, requirements for the correctness of cash management arise from tax and non-tax legal standards.
It must be possible to trace the origin and processing of business transactions. This applies not only to the recording of business transactions, but also to the traceability of these transactions from the determination of profits to the tax return.
Among other things, there is an obligation to keep individual records of business transactions. This obligation includes recording information on the identity of the contracting parties (name, address), the content of the transaction, the consideration and the description of the transaction.
Under certain circumstances, the obligation to keep individual records may be waived, e.g. if goods are sold to a large number of unknown persons against cash payment, so-called walk-in customers (e.g. restaurants, bakeries). In individual cases, this may also apply to services. However, the industry-specific minimum recording obligations must also be taken into account here, which generally include the clearly identified item sold, individual sales prices, VAT amount, price reductions, payment method, date and time of the transaction and the quantity sold.
Cash receipts and cash expenditures must be recorded daily. In addition, the cash register must be capable of collapsing, which means that an expert third party must be able to compare the actual amount with the target amount at any time. In order not to jeopardize the ability of the cash register to fall, the cash balance must be reconciled and recorded daily (e.g. with a counting log). Withdrawals, deposits and cash in transit must also be recorded daily.
Furthermore, bookings and required records may not be changed in such a way that the original content can no longer be determined or it is uncertain when the record was created. The immutability must be set out in procedural documentation.
b. Cash book
If individual records are kept, their total (daily lot) must be entered daily in the cash book after the close of business. In the case of electronic recording systems, this can result from the Z-receipt or, in the case of paper records, from an addition invoice.
When using an open store cash register without individual records, the cash book must be kept in the form of retrograde and consecutive cash reports.
It should be noted that there is no obligation to keep a cash book if profits are determined in accordance with Section 4 (3) EStG (revenue-surplus accounting). However, here too, it must be ensured that basic records are kept from which the transactions relevant for taxation are fully and correctly recorded and visible.
c. Open store cash register
In exceptional cases, the obligation to keep individual records under II. a) may be waived, e.g. for open store tills without the obligation to keep individual records.
This form of cash register management is only permitted for taxable persons who sell goods to a large number of unknown persons for cash and do not use an electronic recording system.
d. Electronic cash register systems
In principle, there is no obligation to keep a cash register or PC cash register. However, the business transactions recorded in the cash register memory are not voluntary, but reasonable basic electronic records in order to fulfill the obligation to keep individual records. The tax authorities have the right to access this data as part of an external audit or cash register and VAT inspection.
III Technical security equipment (TSE) of recording and security systems and obligation to issue receipts
The requirements for a TSE have been laid down by the legislator in the Ordinance on the Determination of Technical Requirements for Electronic Recording and Security Systems in Business Transactions, known as the Cash Register Security Ordinance (KassenSichV), and by the Federal Ministry of Finance in the Application Decree (AEAO) to the Fiscal Code.
According to Section 146a of the German Fiscal Code, a technical security device must have a memory module, a non-volatile storage medium and a standardized digital interface.
The German Fiscal Code also stipulates an obligation to issue receipts when using electronic recording systems, as well as options for exemption from this obligation. The obligation to issue receipts can be fulfilled by paper receipts (invoice or receipt) or electronic receipts (e.g. transmission via SMS, email, Bluetooth or NFC).
IV. Notifiable recording and security systems and associated deadlines
All electronic POS systems with a certified TSE must be reported to the tax authorities in accordance with Section 146a (4) of the German Fiscal Code (AO). This applies to both purchased and rented or leased devices.
The recording systems mentioned include, among others:
- Electronic or computerized cash register systems and cash registers,
- Tablet or app cash register systems,
- Scales with cash register function,
- Merchandise management systems with integrated cash register,
- Hotel and doctor software with cash register function,
- EU taximeter and odometer.
This is an exemplary and non-exhaustive list. The decisive factor is that these systems are equipped with a certified TSE in order to be protected against tampering.
The transitional period for reporting all cash register systems purchased, leased or rented before 01.07.2025 runs until 31.07.2025.
Electronic cash registers that are added or removed from July 2025 onwards must be reported within one month. Corrections must also be reported within one month.
V. Violations of the reporting obligation and proper cash management
The tax authorities are increasingly checking whether business owners are complying with the requirements through unannounced cash register inspections, in the run-up to which business owners must expect undercover observations and test purchases. New audit software is also being used.
As the obligation to notify is an obligation to act, the tax office can impose coercive measures (§§ 328 ff. AO) if the notification is not made.
Violations of the obligation to issue receipts are not subject to fines, but can be seen as an indication that the obligation to keep records is not being complied with.
If the recording or backup system does not meet the requirements stipulated by law, this can raise serious doubts about the formal bookkeeping, up to and including the rejection of the entire bookkeeping. In such cases, tax assessments by the tax office are to be expected.
In addition, a breach of the above-mentioned obligations can also be assessed in individual cases as reckless tax evasion according to (§§ 378 ff. AO). Criminal consequences are generally possible.
VI Recommendation for action
If you are in possession of an electronic cash register or recording system and have not yet submitted a report, you must do so by July 31, 2025.
In addition, POS systems that do not have a TSE and which can be upgraded due to their design should do so immediately.
With regard to the standardization of cash register data, data formats and interfaces, existing process documentation should also be revised and, if necessary, adapted.
In the event of a future system change, it must also be ensured that the data that must be recorded and retained is transferred to a new database or archive system, where it can be analyzed in the same way. Otherwise, the original hardware and software of the previous recording system must be stored alongside the current recording system for 10 years and must be available.
The legally compliant organization of cash register management should always be discussed with your tax advisor and the IT service provider responsible for the cash register system.
If you have any questions in this regard or require assistance in reporting your electronic recording system, please do not hesitate to contact us on 02204 9508- 100.
