Who, what and when?
Entities that pay or are obliged to pay income tax in the Czech Republic, that means:
- individual entrepreneurs,
- legal entities with business activities.
Sales included in registration are sales that:
- come from business activities,
- and along/simultaneously are paid in cash, cheque, promissory note, other similar means, e.g. meal ticket.
Direct bank account transfers are exempt from registration of sales.
Entrepreneurs will get involved in registration of sales as follows:
- First phase (1st December 2016) - accommodation and food services,
- Second phase (1st March 2017) - retail trade and wholesale,
- Third phase (start of this phase has been postponed)* - other professions, except those in the 4th phase, such as freelance professionals, transport, agriculture,
- Fourth phase (start of this phase has been postponed)* - selected crafts and manufacturing activities.
* Based on the cancellation of the provision § 37 of the Act on Registration of Sales No. 112/2016 Coll. (the decision of the Constitutional Court No. Pl. ÚS 26/16 of the 12th December 2017) are the sales generated from the activities that are allocated in the 3rd or 4th phase considered as temporarily exempted sales. The entrepreneurs who receive the sales from the activities that are allocated in the 3rd or 4th phase, they have no obligation to register these sales in the originally declared terms: 1st March 2018 (3rd phase) and 1st June 2018 (4th phase). Nowadays, an amendment to the Act on Registration of Sales No. 112/2016 Coll., which will also regulate the registration of sales from these activities, is being drafted.
How does the registration of sales work?
On-line registration of sales
- Entrepreneur sends XML data message about the transaction to Financial Authority.
- Financial Authority sends back confirmation of receipt with unique code (FIK - Fiscal identification code).
- Entrepreneur issues a receipt (including the FIK) and provides it to the customer.
- The customer receives the receipt.
- Registration of the sale can be verified through the web application of the Financial Authority. The customer can verify his/her receipt; entrepreneur can verify the sales registered under his name.
Technical solution for registration of sales requires a POS device that can communicate electronically via the internet (PC, tablet, mobile phone, cash register, POS system...) as well as internet connection available at the moment when the payment is received. It is entirely at the consideration of the entrepreneur, what POS device and what POS software (suited to the specifics of his business) he chooses, if he ensures compliance with the obligation to send the data message of the receipt and to issue a receipt. It is not necessary to buy any special certified cash registers.
The Act on Registration of Sales also deals with the situations, when the communication between the POS device of the entrepreneur and the server of the Financial Authority is interrupted for any reason (Data message containing information on the registered sale shall be sent to the tax authority immediately after the event which caused the problem terminates, but at the latest within 48 hours of completion of the registered sale), or the situations of non-availability of the internet connection (Registration of sales under the simplified regime).
How to prepare?
The following steps should be taken by the entrepreneurs in order to start registering sales.
- I have to verify whether I am obliged to register sales
The entrepreneur who realizes „sales to be registered“ has the obligation to register sales. A “sale to be registered” is a payment in cash, by cheque, promissory note or by similar means, which entails a business income and which is not exempt from registration. Payments made by direct bank account transfers or bank debits do not have to be registered.
- I have to verify when I am obliged to register sales
The registration of sales will be launched gradually, in 4 phases. An entrepreneur must evaluate which activity generates the sales and allocate that activity to the respective phase, according to NACE classification. This will set the starting date of obligation to register sales from such activity. It is not decisive whether such activity represents the major activity of that entrepreneur.
- I consider if I can register certain sales under the “simplified regime”
Aside from standard regime, which sets the obligation to register sales online, the law provides for the option to register certain sales in “simplified” or “offline” regime, that is not sending data online but within 5 days from the realization of the sale. This regime can be used in cases envisaged by the law, governmental decree or upon the individual decision of the Financial Authority. This regime will be most often used in situations, when the internet connection is not available at the location where the sales are realized.
- I acquire the device for the registration of sales, if I do not have it already
In order to register sales, the entrepreneur must possess the relevant device (he can freely choose such device that suits his business activity), e.g. cash register, POS system, PC, tablet, or mobile phone, and a printer. The device must be technically equipped in the way to be able to send the data message about the sale via internet to the server of the Financial Authority, and to be able to issue a receipt to the customer. The law does not specify any devices or their producers, everybody can acquire suitable device at the free market.
- I acquire the access data for EET portal and there the certificate for the registration of sales
Before starting to register the sales, the entrepreneur must ask the Financial Authority for the authentication (access) data, which allow him to log in to the EET portal. After logging in, the entrepreneur must register his business premises and generate certificate for the registration of sales, which must be installed in his POS device. The device can be tested in the pilot regime.
…and I can start registering sales.