your cash register and the fiscal accounting obligations

Transcription

1 2007 your cash register and the fiscal accounting obligations your cash register and the fiscal accounting obligations

2 1. Why this leaflet? If you use a cashregister or point of sale system, you do so because you consider it important to record the transactions, like the sales that take place in your company. In addition, a cash register is able to register transactions correctly and completely, and can help you or someone on your behalf in checking the cash. When using a cash register you should realize that it is part of your books, records and other data carriers, and that you must organize it and retain its records in compliance with legal obligations. Should you fail to comply with these obligations, then you may be in trouble, for instance when the tax authorities audit your books and accounts. This leaflet gives you some suggestions for organizing your accounting system in such a manner that you will comply with the demands of Dutch Tax Law For whom is this leaflet intended? This leaflet is intended for all companies and company owners, including sole proprietors who use a cash register or point of sale system, or are planning to purchase one. This leaflet also contains information useful to suppliers of software and (tax) consultants. 2. What is a cash register? A cash register or point of sale system is first of all a tool to register and process payments for sales easily and properly. The customer is handed a receipt as evidence that his purchase is settled in accordance with the agreed terms and conditions. For the company a modern cash register performs many more functions, such as supporting the logistical process, checking the cash, or gathering statistical data. Most point of sale systems record an amount of important data on each transaction, including the article sold, the number of articles sold, the price, the time and date of the sale and the name of the company and salesman. Many different cash register systems exist. They can be classified into three types: Mechanical cash registers. This is basically a cash box to which a limited number of registers is 2 your cash register and the fiscal accounting obligations

3 attached. This register records, for instance, the number of transactions or their total amount. Its reporting facilities, such as for X or Z totalling, are limited. Electronic cash registers. This is a cash register with an (EPROM) chip that records data. Thedata can be read and transmitted to a central computer. It is capable of producing various reports, such as reports on X and Z totals. Point of sale or checkout systems. This cash register is, in effect, a front office that is linked to a computer (back office). The system records all transactions electronically. The data in its database is then used for accounting purposes, including entering, processing, and recognizing transactions Which reports can be made? Using a mechanical cash register you will usually only be able to make one or two reports, for instance, on the registered sales during a certain period of time (day, month, year). Using an electronic cash register you have an instrument for making a substantial number of reports, and with a point of sale cash system you even can make various analyses (and reports). Some reports are standard elements of the system s software. Standard reporting facilities of electronic cash registers and point of sale systems include: Daily totals (Z totalling), the sales to be specified. Period summary, the sales total during the period since the previous Z total (at which moment the cumulative sales record was reset to zero, in the case of X totalling records the total has not yet been reset), or the sales total between two specified days. Price look-up (PLU) summary including the sales of each article or groups of articles. Daily article range summary. Article group summary, sales for each group of articles. Department summary, sales for each part of the business. Financial summary, similar to a period summary. Hourly summary, sales total per hour of the day. Sales summary of each salesman. 3 your cash register and the fiscal accounting obligations

4 3. Accounting obligations Dutch tax law provides the following with respect to the requirements with which the books and accounts (accounting system) of a company should comply to: Under Section 52, Paragraph 1 of the General Taxes Act of the Netherlands ( Algemene wet inzake rijksbelastingen AWR ) persons who are obliged to keep books, records, and other data carriers should keep books and accounts of their financial position, as well as of all affairs of their business according to the demands of that business and retain the associated books, records, and other data carriers in such a manner that they show their rights and obligations at all times clearly and unequivocally, as well as any other data relevant to the levying of taxes. You, as a company or as a company owner, are therefore obliged to keep records of everything regarding the management of your business so that your rights and obligations are evident at all times. You are free to choose how you organize your books and accounts, but certain restrictions apply to this liberty. Books and accounts, or an accounting system, should be according to the demand by the business. This means that the manner in which you should keep your books and accounts is determined by the nature of your business, and by the extent of the information you, at the least, need to control the business processes within your company. The nature, the size, and the complexity of your business therefore affect the organization of your books and accounts. The more complex and sizable your business is, the higher the requirements are demanded on the organization of your accounting system. Under Paragraph 4 of Section 52 persons who are required to keep books and accounts should keep the data carriers on which these books and accounts are recorded for a period of seven years. Under Paragraph 6 the books and accounts should be organized in such a manner that it allows the tax auditor to audit them within a reasonable period of time. Thus, during the full period of seven years to consult and to reproduce your data within a reasonable period of time. The books and accounts should be accessible and the company and company owner is always obliged to co-operate to make it possible to commence a tax audit within a short term. 4 your cash register and the fiscal accounting obligations

5 4. The cash register and the accounting obligations The data recorded in the cash register are part of your books, records, and other data carriers. Consequently, the requirements to be met by a person s books and accounts also apply to the cash register. The following specific requirements to the cash register and the transaction data are to be met: All data on transactions should be retained. All data that are recorded in the cash register should be retained. The cash register often uses a paper tally roll or keeps an electronic journal, stating all actions that are carried out and recorded by the system. To be perfectly clear: everything that is digital should be retained digitally. It should be possible to produce or reproduce all data on transactions. If data were recorded electronically, you should retain them electronically, and you should be able to produce or reproduce them on short notice. If the (EPROM) chip of a cash register has insufficient memory capacity for holding all data, you should regularly make a back-up on another medium. You will fi nd more information in the leafl et Uw geautomatiseerde administratie en de fi scale bewaarplicht (Your computerized accounting system and the fi scal obligation to retain books, records and other data carriers) (see Paragraph 5). The transaction data should be auditable. The record of a transaction including associated data (such as time and number) should be traceable in your books and accounts. These data are included in the notion of the audit trail. For instance, you should use consecutive numbers. Using consecutive (and therefore uninterrupted) numbers it can be established whether a transaction is missing, and transactions can easily be found again. Special records, such as corrections on already recorded transactions, for purposes of training personnel ( training mode ), cash drawer opened without a sale, and for logging in employees should be recorded and retained. 5 your cash register and the fiscal accounting obligations

6 It should be possible to show the settings of the cash register. The manufacturer delivers the cash register in the standard mode, and has set it up so that it meets the (informational) requirement of the company. In a tax audit you should be able to show the current settings (parameters). The specifications of the settings of the system are recorded in the cash register. You are required, therefore, to retain them digitally or on paper, depending on the cash register. If you were to alter the settings, then you are obliged to record and retain the changes. The transaction data should be secured. By applying the proper security you should ensure that, when using cash registers that use a tally roll or a cash register system with an electronic journal, it is impossible for data to get lost or to be manipulated later on. Should you be uncertain or have any questions, please contact the supplier of your software and/or your cash register. The transaction data should be in a legible format, and should be made available within a reasonable period of time when asked. The daily summary (Z totalling report) should be a complete and correct summary of the totals of the transaction data referred to in detail earlier in this leaflet, including extraordinary transactions such as those recorded in the training mode. At an earlier date the Dutch Tax Administration has produced a standard audit file for general ledger and salary data. This standard audit file which software suppliers include in their software, has increased the efficiency and effectiveness of external audits by the Tax Administration and the public accountant. A standard audit file for cash registers has been developed in This standard audit file can decrease the burden of a tax audit substantially, both to the Tax Administration and to the company/company owner. Ask your software supplier for this audit fi le. 6 your cash register and the fiscal accounting obligations

7 5. Do you still have any questions? This leaflet explains to you which data you are obliged to retain if you use a cash register. It also states how to retain this data in order for the Tax Administration to be able to audit your tax declarations within a reasonable period of time. You may find more about retaining digital data in the leaflet Your computerized accounting system and the fiscal obligation to retain books, records and other data carriers. This leaflet is only available in Dutch with the name Uw geautomatiseerde administratie en de fiscale bewaarplicht. You can download this leaflet from Go to Downloaden en bestellen. Choose Zakelijk, followed by Een administratie opzetten and you will see the.pdf. Questions on the retention obligation If, after reading this leaflet, you should have any questions on your accounting obligations, please contact the tax office that deals with your tax declarations. General questions Should you have any questions of a general nature, you may call the Tax Telephone on , or the Customs Telephone on The lines are open on workdays; from Monday through Thursday from 8.00 am to 8.00 pm and on Fridays from 8.00 to 5.00 pm. You may also contact the Tax Administration on the internet: 6. Checklist for cash registers With the following checklist you can check whether the cash register or point of sale system, which is offered or supplied to you, meets the requirements for you to comply with your accounting obligations. Organization of books and accounts Does your cash register meet the expectations considering the nature, size, and complexity of your business activities? Will you be able to control the business processes using this cash register? Are the cash records organized in such a manner that your rights and obligations are evident at all times? 7 your cash register and the fiscal accounting obligations

8 Transaction data Can your cash register record and retain all (digital) transaction data? Can the transaction data be (digitally) audited? Has the electronic journal or tally roll been retained? (Transaction) data which have been available to the company digitally, should be retained digitally in any case. These digital (transaction) data are relevant to managing your business. Under Section 52 of the General Taxes Act of the Netherlands these data should also be retained in their original (digital) form. The expenses of digital recording capacity are decreasing. These expenses and your or your company s efforts remain within the limits of what can reasonable be expected of you. Digital data also allow the Tax Administration to audit more efficiently. Reporting Does the cash register have the capacity to make reports that can reasonably be expected to meet the demands of the business? Are these reports retained? If, for instance, you print Z totalling reports, you are obliged to retain them. By the way, these Z reports are summaries of certain data, and therefore they do not contain any detailed data at the level of transactions. Thus, a Z totalling report cannot be used to retain data on the transaction level. Transaction data can be retained by means of the electronic journal or the tally roll. Do these reports state the grand total, date, time of day, consecutive numbering, making it clear on which period of time they are based upon? System settings Are the details of the system settings being retained? Memory capacity Does your cash register have sufficient memory capacity to retain all transaction data for a period of seven years? 8 your cash register and the fiscal accounting obligations

9 Back-up Are the data properly physically secured? Consider calamity such as a fire or a breakdown. Securing data Are the transaction data secured against changes later on? Audit trail Are the data retained and secured in such a manner that it can be traced how these data originated during an audit? Auditable within a reasonable period of time Are the data being retained and are they accessible (or: are they in a legible format) in such a manner that a tax audit can be made within a reasonable period of time? After a certain time can the data still be produced or reproduced within a reasonable period of time? Even if a new (cash) payment system has been bought, or after a version change? Has the audit file for cash registers been incorporated in the payment software? If you have any questions, contact the supplier of your cash register. 9 your cash register and the fiscal accounting obligations

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