In recent years, there have been many changes in the law that are relevant for companies in the retail sector. In addition to the TSE regulation, the cash register inspection is a particular concern for founders, self-employed persons and store owners. These were introduced in 2018 and include numerous regulations and obligations that affect you and your business. Are you wondering who is supposed to keep track of all these changes in the law and regulations? Well, we for example!
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The cash inspection was introduced on 01 January 2018. This is regulated in the German Fiscal Code (AO) § 146b Cash inspection. Since then, auditors of the tax office are entitled to inspect your cash book and the cash register system - and completely unannounced. Similar to the Technical Security Device (TSE) this regulation is also intended to prevent or detect manipulation of the cash register.
A cash register inspection can be carried out spontaneously and without notice. The auditors from the tax office will then appear in your store during business hours, identify themselves and demand to see the cash books and the cash register system. If you are open on Saturdays or Sundays - for example, because you run a snack bar - a cash register inspection is also possible and legal on these days. The auditor will then examine your handwritten and digital records and the cash register itself. He may also request a copy or a digital transmission of the data in order to analyze them later.
In fact, you are entitled to refuse a cash register inspection. The problem is that the auditor will then be all the more likely to initiate a comprehensive tax audit. This is significantly more time-consuming and cannot be refused or delayed. Incidentally, a cash register inspection can still take place even if you, as the managing director, are not present. The auditor will then obtain the required information through one of your employees. Our tip: If you are rarely present in the store in person, you should thoroughly train a trusted employee on the cash books and the cash register system. Your tax advisor may also be able to accompany the cash register audit on short notice. However, there are other ways you can prepare for the cash register audit.
First things first: Of course, your POS system should meet all legal requirements and be TSE-compliant. Users of digital POS systems like LocaFox’s have a clear advantage here. That’s because these systems are inherently compliant with the law and also meet the TSE requirement. You should also ensure that your bookkeeping is accurate, organized, and up to date. Here, too, a digital POS system is helpful, as all relevant data is securely stored in the cloud and can be clearly compiled in a matter of seconds. The tax auditor will certainly appreciate this as well. Want to play it safe? Then ask yourself the following questions in advance:
The last point regarding the Technical Security Device (TSE) is particularly relevant. The TSE requirement has been a recurring topic of concern for tax authorities and retailers since 2020. Due to the COVID-19 pandemic and for technical reasons, only a few inspections have been conducted so far. However, that is now changing rapidly. It’s a good idea to use a POS system like LocaFox’s, which meets all legal requirements. By the way: If you have any questions about the inspection, we’re happy to assist you with our expertise!
Is your POS data incomplete, inaccurate, or has it been demonstrably tampered with? In that case, the tax auditor will conduct an on-site audit. This used to be called a business audit and involves a thorough examination of all business, financial, and tax-related aspects of your operation. Typically, the last three years are examined. If your cash register system or accounting records show glaring deficiencies, the tax office will estimate your taxable income. This means you can expect to pay significant back taxes, which could potentially threaten the survival of your business. Additionally, an extra fine of 25,000 euros may be imposed.
Digital point-of-sale systems give you a clear overview of your accounting and securely store all your data in the cloud. But as with any other system, using it correctly is key. A digital point-of-sale system is therefore a smart tool for retail business owners, but it’s no guarantee of accurate accounting. That’s why at LocaFox, we’re here to support you with personalized advice, comprehensive service, and plenty of tips on how to use your digital POS system. Another piece of advice: Choose a tax advisor who is familiar with digital POS systems and knows what to look out for during a cash register audit. This is because auditors themselves are sometimes not familiar with modern POS systems, and having your tax advisor accompany you can help ensure that important questions are clarified quickly and competently.
At LocaFox, we understand the challenges of the retail industry. That’s why we don’t just offer smart solutions for a digital point-of-sale system—we’re also here to provide you with expert advice. Feel free to give us a call or send us a message: We look forward to getting to know you and your business!
