The Czech Republic’s new Act no. 112/2016 Coll. on the electronic record-keeping of cash sales becomes valid as of 1 December 2016. The Act applies to all corporate or personal income tax payers (regardless of whether they are VAT payers or not) who are receiving payments for their goods and services in the following forms:
- Credit cards
- Bill of Exchange
- Wire transfer
- Other similar payments such as: meal vouchers, gift cards, vouchers for goods and services, payment token, bitcoins, special cards.
The Act is also applicable to businesses without physical stores, and it does not distinguish between receipt of revenues in Czech or foreign currency.
Sales excluded from the electronic record-keeping of cash sales are specified in § 12 of the Act, ie. sales with: state, territorial self-governing unit, contributory organisation, savings and credit cooperatives, the insurance and reinsurance companies, investment companies and investment funds, pension companies, pension funds, companies operating in the energy sector under a license granted by the energy Act, business on the basis of a permit by the regional office of the water supply and sewerage.
Examples of sales that are excluded from electronic record-keeping are as follows:
- realised before assignment of a tax identification number and during the 10 days following its assignment
- from the postal service; and the goods and services provided in direct connection with them
- related to employment or a similar relationship
- from food and accommodation for students provided by the school, college or school facilitiefrom the fare or related payments paid in the public transport system for the mass transportation of people
- realised on aircraft
- from a small side business of public benefit tax payers.
The timetable for the introduction of this Act is expected to be as follows:
- From 1 December 2016 - accommodation, catering and hospitality - CZ-NACE group 55 and 56
- From 1 March 2017 - retail and wholesale - CZ-NACE group 45, 46 and 47
- From 1 March 2018 - entrepreneurs engaged in any other activities, eg. the professions (doctors, lawyers, and accountants), transport and agriculture with the exception of those included in the fourth stage
- From 1 June 2018 - selected crafts and production activities - CZ-NACE group 13-17, 20.4, 22, 23, 25, 31-33, 43, 95, 96.
In general, to meet conditions of the new Act on the electronic record-keeping of cash sales, the payer is required before receipt of the first recorded sale, to submit a request for authentication information via the Tax Administration website through data message, with verified identity of the person using the login data to the company´s data box, or in person at the relevant tax office.
Furthermore a data connection is required (internet or mobile internet) which will, at the moment of receipt of payment, communicate to the Financial Administration, generating and sending a fiscal identification code. This will be printed on the receipt.
Equipment including software or an application is necessary. This equipment enables the registration of payment (revenue), connection with the Financial Administration, acceptance of the fiscal identification code and sent data and printing of the receipt (which is handed over to the buyer).
The receipt must include:
- the fiscal identification code
- tax identification number
- identification of the business premises in which revenue is realised
- identification of cash-handling equipment, on which the revenue is recorded
- serial number of the bill
- the date and time of receipt of revenues or issuing receipt when exposed earlier
- the total amount of the payment
- security code of the taxpayer
- information about whether the revenue recorded is in the usual or simplified scheme.
The registered receipt must also include the tax identification number of a taxpayer who authorised the taxpayer that keeps evidence of sales.
If the recording of revenues in the usual way prevents or significantly complicates the smooth and efficient performance of the business of a taxpayer from which revenue flows (eg. places without an internet connection), the tax office can issue, at the request of the taxpayer, permission for recording revenues in the simplified regime. In this case the taxpayer must send the recorded data to the tax office within five days of the sale via company´s data box, but the receipt must be issued as well. The taxpayer is not obliged to state the fiscal identification code on the receipt.
In conjunction with this act, Act no. 113/2016 Coll. on income tax is changing. Under the changes, the taxpayer is entitled to a tax discount amounting to CZK 5,000. The discount does not exceed an amount equal to the positive difference between 15% of the partial tax base from independent activities, and the discount for a tax payer. This discount can be applied only in the tax year in which the taxpayer first registered revenues, which must be recorded.
Also as of 1 December 2016, the VAT rate applicable for catering will decrease to 15%.