The electronic cash register in the Slovak Republic
According to the Act on the use of electronic cash registers (“ECR”) and with effect from the 1st of January 2012 entrepreneurs who sell goods or provide specified services and meet the statutory conditions are obliged to use electronic cash registers with a fiscal memory. Repair and maintenance of these cash registers can only be performed by a service organisation registered in the Register of service organisations maintained for this purpose by the Financial Directorate of Slovakia (“FD SR”). Each ECR must contain the tax code assigned by the tax office. In addition, the law defines the technical requirements on the ECR.
Since the introduction of the obligation to use electronic cash registers, the Act underwent various modifications and amendments to its present form.
The obligation to use ECR refers to any individual or legal person that under the business license:
- carries out business,
- receives revenue in cash or by other payment methods replacing cash at the point of sale,
- sells goods or provides the selected services (listed in Annex no. 1 of the Act).
Entrepreneurs residing in the Slovak Republic or entrepreneurs with headquarters outside the territory of the Slovak Republic but selling goods or services in Slovakia, are obliged to use electronic cash registers as well. If none of the above conditions are fulfilled, there is no obligation to use electronic cash registers.
With effect from the 1st of July 2016, the definition of sales of goods or services changes, from the basic definition (payment from the sale of goods or services received in cash at the point of sale or other payment methods that replace cash, particularly electronic means of payment or vouchers entitling one to purchase goods or services, and payment received as a deposit is also considered as revenue), payments that come by bank transfer to the account of the entrepreneur are exempt.
The Act defines exceptions when there is not an obligation to use the ECR. The obligation to record sales in the ECR does not apply to the following activities:
- sale of stamps, tickets for public transport, phone cards, newspapers and periodicals,
- sale of postal stamps for philatelic exchanges,
- sale of goods through vending machines,
- sale of coins made of precious metals,
- rental property,
- cleaning works,
- administrative activities,
- wrecking services for motor vehicles and others.
From April 1st 2015, the Financial Directorate has launched a free business application – virtual cash register (“VCR”). VCR is based on the system of electronic communication via the Internet, meaning that seller has to use electronic devices such as computers, laptops, tablets or smartphones. These terminal devices must be connected to a printer in order to print invoices. The VCR is aimed for those entrepreneurs, whose number of issued documents is less than 1000 during one calendar month. Entrepreneurs who exceed this limit are obliged to use the electronic cash register. In the case of higher amount of issued invoices, the entrepreneur must use the ECR.
The introduction of electronic cash registers brings negative aspects as well. The Financial Administration of Slovakia discovered cases of VAT and income tax evasion using the modified software of electronic cash registers. It is a systematically organised fraud, which involves not only entrepreneurs, but the manufacturers of cash registers also. The fraud is, in particular, in fact that the documents for the customer are not recorded in the fiscal memory, and the emblem of the Ministry of Finance of Slovakia is typically missing on the invoice. The fraud was detected on the basis of the VAT control report and physical checks of the ECR. If the entrepreneur does not use electronic cash registers, the tax authority may impose a fine of 330 EUR to 3300 EUR.
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