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 the registration are sales that:
- come from business activities,
- and along/simultaneously are paid in cash, cheque, by promissory note, by payment in so called limited network (meal ticket, electronic wallet, voucher) or other similar means.
Direct bank account transfers and card payments made through payment terminals or online transactions carried out through e.g. a payment gateway are not subject to the 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 and fourth phase together based on an amendment to the Act on Registration of Sales (1st May 2020) - other activities.
Registration of sales postponed by Act no. 449/2020 until 31st December 2022.
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.
Offline registration of sales and special regime to register sales
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 Financial 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 or special regime; see below section “How to prepare” for more information).
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" is obliged to register sales. A “sale to be registered” is a payment in cash, by cheque, by promissory note, by payment in so called limited network (meal ticket, electronic wallet, voucher) or by similar means, which entails a business income and which is not exempt from registration as listed in paragraph 12 of the Act on Registration of Sales. Payments made by direct bank account transfers, bank debits or card payments made through payment terminals or online transactions carried out through e.g. a payment gateway (PayPal etc.) do not have to be registered.
- I have to verify when I am obliged to register sales
The registration of sales are launched gradually, in different phases. Currently, an entrepreneur should 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 also so called 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 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 consider if I can register certain sales under the “special régime”
Newly, as of 1 February 2020, the amendment to the Act on the Registration of Sales brings the smallest entrepreneurs the possibility to register their sales in a special regime. This special regime allows entrepreneurs with cash sales (i.e. payments in cash, by check, by promissory note, by payment in so called limited network or other similar forms) up to CZK 600,000 and who have less than 2 employees to benefit from the so-called special sales registration scheme. If the entrepreneur meets these conditions, he does not have to use cash registers to register sales, but can instead register sales via paper receipts from blocks received at the Financial Authority, which must be written manually when receiving cash payment. This regime can be used upon the individual decision of the Financial Authority.
- I acquire the device for the registration of sales, if I do not have it already
In order to register sales, the entrepreneur must, if not using the special regime (i.e. paper receipts from blocks received at the Financial Authority), 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, entrepreneurs can acquire suitable device at the free market based on the specifics of their business.
- I acquire the access data for EET portal and 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 allows 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.
…and I can start registering sales.