Fiscalization

Some fiscal laws define the use of special hardware devices.

These are usually:

• fiscal printers – receipt printers with special fiscal memory where fiscal data is stored
• fiscal communication modules – devices that are used to send fiscal data to the fiscal authority
• fiscal memory boards – circuit boards that can be included in or connected to the POS, ECR, or printer
• signature devices – devices that produce digital signatures which are used to secure the fiscal transaction

Most of the fiscal countries in the world today are following the path of hardware-based implementation.

This can be a more modern way of implementing the law.

The background is that the law defines how something has to be done but not which device should be used. This model is more liberal, and it can be expected that in the near future more countries will follow this approach.

Today, there are several different scenarios:

• send each transaction to the fiscal authority in real-time, to get a digital signature from the authority and to include it in the transaction.
• store every transaction in the database where every entry has a sequence number and a digital signature
• save data in a special format in special fiscal journal (database)
• digitally sign every transaction by a special algorithm

In some cases, in addition to these technical implementations, there are some additional technical approaches. They are mostly related to:

• data security and protection
• archiving
• reporting
• special business processes (mostly in specialized retailing e.g. petrol stations)

Albania is fiscal country since 2004. Since early beginning, it was mandatory to use fiscal printer and ECR’s. Through the time the fiscal requirements included also the use of EJ and GPRS. As of today, the fiscal device in Albania includes:

1. Fiscal cash register/fiscal printer
2. Fiscal memory
3. Customer display (optional)
4. GPRS device

Fiscal printer has its own clock, so time adjustment for daylight changes should be done by POS software (twice a year) - there is no automatic adjustment. All devices have to support Latin and Albanian letters. In case of invoices, the procedure includes a regular fiscal receipt from the fiscal printer but additionally a document not printed from the fiscal printer itself. Also, special criteria for the security, uniqueness and records have to be met.

Austrian parliament approved a new fiscalization model which came into force January 1, 2016. This was the first part of fiscalization, which includes the creation of a Fiscal Journal (FJ) which has to be saved at each POS, central database or in the cloud. The second part of the new fiscal law is the digital signature of every cash receipt, which will be implemented on April 1, 2017. Austrian fiscal regulation is based on two concepts. The first concept relates to the usage of a digital signature device for every issued receipt and the second to a "closed system" in which an independent audit of company processes and organization is needed. "Closed system" refers to the company that has more than 30 cash registers. But there is one difference between these two concepts - usage of a digital signature device and registration of each POS at a fiscal authority is not mandatory in a "closed system". Advantages of a "closed system" are therefore: signature device, digital certificate and POS registration at the Authority, are not needed. With the new regulations, fiscal law in Austria requires that every POS has a unique number, that has to create and maintain the fiscal totals (created by adding every cash turnover to previews, encoded with AES 256 algorithm). Based on tax information from the transaction, the POS has to create a barcode, QR Code or OCR code on the receipt. At the end of each year, the special fiscal receipt has to be printed and saved for the authority and every retailer has to keep it for seven years.

Fiscal law which was implemented at the end of 2010 in Bosnia and Herzegovina implies recording every single transaction of fiscal devices. Communication with the tax administration is done via GPRS.

The changes to the fiscal law in Bulgaria, based on fiscal device from 2006, have been done in September 2018. They brought with them new regulations to the fiscal devices that previously did not exist:

1. The data exchange with the TA (NRA) and certain problematic situations that may occur and in which the FD has to automatically perform certain actions
2. USN that has to be supported not only by the POS SW but also the FD
3. QR codes that have to be printed on all fiscal receipts so the fiscal device must support printing of QR codes

All devices have to comply to the new regulation and therefore go through a new Homologation process. Bulgarian Metrology Institute is the place where the producers and distributors submit their devices in order to get approval for devices that will be present on the Bulgarian market. Initially the deadline for introducing new FD was planned for the 01.04.2019.but it was extended. The new deadline for the introduction of complying FD (that work with POS SW) is the end of September 2019.

New fiscal law in Croatia, as a concept of controlling businesses and their turnover, has become a reality since January 1, 2013. Although Italy was the first country which introduced law for the use of specific fiscal devices (which happened in 1983), Republic of Croatia is one of the first countries in the world with a type of fiscalization which requires that fiscal relevant transactions have to be sent to the fiscal authority through the Internet for authorization. Implementation of the new type of fiscalization in the Republic of Croatia was very fast. The technical specification was done in October 2012 and the new law implemented only three months later. Software manufacturers were not very optimistic about this new fiscalization concept, especially because of the short period of time for implementation. But the new fiscal law debuted January 1, 2013.

According to the law:

1. Each receipt has to be printed
2. Each receipt has to be sent to the Tax Authority
3. Communication is done via Internet connection
4. The tax authority server returns data such as: amounts, income taxes, unique cashier number (OIB), payment information.

Every relevant fiscal transaction created at POS system has to have online authorization in real time by the Tax authorities. Information that have to be sent to the Tax Administration are:

1. Company information,
2. Store information,
3. amounts,
4. payments information, etc.

Even though the internet access is a must, if there is no internet connection at some moment, customer services are in progress even though Retailers are offline. Every receipt has to be printed, but reauthorization will be followed later, within 48 hours. Any change of store data has to be reported to authority electronically within 15 days. Waiting time of the POS to get answer from authority server has to be at least 2 Seconds. In offline case (time exceeded 2 sec) fiscal identification code (FIK) should not be printed – instead of FIK, BKP should be printed and offline transactions should be sent to authority immediately after problem is solved but not later than 48 Hours after issuing the offline receipt. There are some steps that new stores should do for getting fiscal registration:

1. Before sending any data to fiscal authority retailer has to submit (electronically of written) the request for authentication data
2. Upon this request the access to the administration area will be granted
3. By remote access to the administration area retailer can administrate his digital certificate and other relevant data
4. Retailer has to report store (also web shop) data to the authority
5. Authority creates store ID for the retailer
6. Store data have to be sent electronically to the authority
7. Store/Web shop registration has to be done before first transaction is issued

Fiscal law in France is introduced to prevent any kind of fraud, for example changing the data and software modification. There are some requirements and five most important in France are: Certification process, signing and sequencing data, fiscalization of system transaction, periodical report and archiving, backup and purging data. There are 2 certification models: 1. Certification by two agencies authorized for certification by the tax authority : Infocert and LNE 2. self-certification While self-certification is more cheap and it does not include an external factor, the one by authorised agencies provides official certification of fulfillment of legal requirements, such as clear instructions and all the conditions that need to be provided. Furthermore, all data, such as tickets (regular POS receipts), invoices, bills (order receipts), daily, monthly and yearly reports, technical events log (JET) and archive, must be sign with electronic signature. There is sequencing of data in chain, per type of transaction - 6 chain total one for every type. That means that it is really hard to make some changes of transactions. To change one transaction, you would have to change previous one, and one before that and so on. Idea to prevent any manipulation went further than just a data base. As a result, there is a fiscalization of systems transactions – operations such as log in, log out, reset, error that must be recorded in technical event log – JET. Transactions are saved in real data and real time considering data and time elements. Also, there are periodical reports – daily, monthly and yearly with grand totals. In grand perpetual total – specific for FR, both positive and negative transaction are counted as positive and they increment this total. For example, if you have positive transaction of €50 and then a negative transaction of €25 gran perpetual total will be €75.

The initial step towards ensuring the stability of the cash register data was the law on the protection against manipulation of digital basic records (so-called "Kassengesetz"), which was introduced at the end of 2016. Subsequently, several changes in the law, which additionally regulate the complete fiscal environment, followed:

1. regulation from 01.01.2017. - all transaction data have to be saved complete, chronologically, unchanged (original values) and in that way that manipulation of data is not possible,
2. new audit rules from 01.01.2018.
3. rule to use security system TSE, that is the most important rule - the finalization of the implementation should be 31.12.2022.

Each of these amendments to the law must be fulfilled and may have an impact on integration of security system.

From 01.01.2020 every POS has to use security system (TSE) and every POS and TSE have to be reported and registered at tax authority. The security system (TSE) consist of:

1. Security module
2. Secured memory
3. Interface (API)

Major functionality of TSE is to provide signing of data in order to prevent any manipulations in data base, meaning each receipt must be provided with an electronic signature (signature is not printed on the receipt).

The general principle of the fiscalization system in Hungary includes the whole solution which is used in the store for creating and issuing of receipts. The authorities have set up the requirements standard which absolutely minimizes the possibilities for different types of tax fraud which can happen in the cash register environment. Practically, the system implies the following:

1. Certification of the entire fiscal solution which includes the POS software and the fiscal printer with the customer display as a whole,
2. Tests and the certification procedure demand interaction with fiscal entities in the country,
3. All-inclusive documentation must be provided to the authorities for certification purposes between which the documentation describing all functions, methods of usage and layouts of fiscal and non-fiscal documents must be provided on Hungarian language,
4. Strict handling of integration of the POS software with the printer in regards to e.g. error handling and mandatory functionalities,
5. Transaction data are communicated with authorities in real time, automatically, by a communication module which is attached to the printer, via GSM network.

During the recording of sales itself, there are several procedures which must be conducted, such as the following:

1. before beginning of each document, existence of pairing between the POS application and the fiscal printer must be checked,
2. it must be possible to read the status of the communication module called AEE by the POS application before start of each transaction and at every item scanning,
3. the printer must record every POS turn ON and OFF event,
4. as a built-in function in the POS application there must be a function for querying and presenting the used version of the POS application on the operator display, at all times.

Important to notice is the obligation to support 4 modes regarding currencies which are related to the transition process of switching gradually from mandatory and optional accepting of the domestic currency called Forint to the Euro. Furthermore, one more example of a strict requirement is the fact that deposit handling for bottles has to be implemented in a predefined way, no matter the nature of the retailer.

Data sent to Tax Authority consider Fiscal data from the daily sales and it is done at the end of the day. The benefits of RT fiscal printer in Italy are reducing controls by Tax authorities, reducing time frame for keeping mandatory documentation and simple delivery of data to Tax Authority. Registratore Telematico is a key part of fiscal printer, fiscal data is automatically submitted to Tax Authority every day via Telematico device integrated in the RT fiscal printer. That data can not be manipulated (due to fiscal memory) and the data about daily sales is sent once a day with complete information. One of the novelties in Fiscal law in Italy is the Fiscal Lottery that was expected by the 2017 Budget law, but it has been postponed several times and the right to participate in lottery belong to all natural/physical persons with residence in Italy. The Inland Revenue has provided the instructions on the receipt lottery which, from 1 July 2020 aims to combat the phenomenon of tax evasion and which aims to encourage the use of the receipt. The lottery will be optional which means that only those who communicate the code to the merchant will compete in the draws. To participate in the draws, and aim for the substantial prizes provided, the tax payer must provide the merchant with his own lottery code and to make purchases of at least 1 euro. The lottery code is nothing but a unique code that the end consumer will have to generate on the "lottery portal". The lottery will include the extraction of three codes per month. The first prize will be 50 thousand euros, the second 30 thousand euros and the third 10 thousand. From 2021 the draws should become weekly. Then, a maxi final draw (every year) that will put all the tickets back in the game, with a prize of one million euros. The keeping of receipts will not be necessary. The winner will be notified via a pec (certified e-mail) and can still check the winning tickets each time on the dedicated website that should go online in March 2020. If the operator, at the time of purchase, refuses to transmit the tax payer's lottery code or doesn't transmit data of single transaction or service to the Revenue agency, thus preventing the tax payer from participating in the lottery, the possibility of reporting by the customer of the retailer is introduced which could lead to control by the tax authorities.

Every fiscal device must have a record number which is a unique number that is entered in the fiscal memory of the fiscal cash register, and serves to identify the tax cash registers. The fiscal account in particular contains the following information:

1. The name of the taxpayer and the name and address of sale
2. Users PIB
3. The amount of tax at the tax rates
4. Total amount of taxes
5. Day, month, year, hour and minute of fiscal receipt issue

Fiscal receipt is printed in two copies, one of which is issued to the buyer, and the other remains on the control bar. Every sales location is obliged to print a daily report at the end of the day. A taxpayer who works 24 hours per day is required to print a daily report once during 24 hours. The taxpayer is obliged to keep printed daily reports in chronological order in the book of daily reports. The book of daily reports shall be kept separately for each cash register.

Fiscalization was firstly introduced in Poland in 1993. As a hardware type of fiscalization, it was based on usage of two types of fiscal devices (fiscal printer and electronic cash registers). Both electronic and paper journals were allowed.

The latest fiscalization changes have happened during the first half of 2018. One of the major novelties is the introduction of the on-line cash registers - devices that send data on registered sales to the information system maintained by the National Tax Administration. As in other online fiscalization systems, the characteristic of communication with the authorities is required for analytical and control purposes needed to the state. However, with the law changes, currently available fiscal printers, as the main fiscal devices, still won't go to history. The plan is to gradually withdraw them from the market and from practice in general. The introduction of the online cash registers itself does not automatically impose an obligation of replacement of the old devices to the new ones. At least, not for now, and not for all taxpayers in the same moment. The set timeframes for particular industries are the following:

1. 1 January 2020 for fuel sales, vehicle repair and vulcanization services;
2. 1 July 2020 for catering industry, short-term accommodation services, coal sales;
3. 1 January 2021 for construction industry, hairdressing services, medical care services provided by doctors and dentists, legal services.

Besides the online registration of sales, there are also a couple of adjustments referring to the layout of the receipts. For example, the header is going to have a defined and structured layout; QR code must be printable for every fiscal receipt; list of payment medias possible to be recorded by the printer has been expanded, etc.

Portugal has the software-based fiscalization system, which means that it is mainly focused on the characteristics of the POS application and demands regarding functions of the POS program such as security mechanisms, inalterability standards for the created fiscal data and so on. There are no predefined types of hardware components which would be obligatory for usage and e-receipts are possible, but there must be a possibility to print fiscal receipts. This system includes some formal check-ups of the software. The POS application used by the taxpayer must be certified by the General Directorate for Taxation of Portugal. The certification procedure can include conformity tests, but it is recognized in practice that it is usually not a complex and long procedure. There are 3 ways in which it is possible to provide fiscal data to the authorities, as the communication with the authorities is a must in Portugal. Obligatory elements of a receipt:

1. A code which must be always included in the content of particular transactions (combined of 3 parts, where the first one is an extract of the digital signature of the concrete transaction in question)

Romania is fiscal country since 1999. Type of fiscalization is hardware based, and main novelties related to the latest law changes from November are:

1. Communication and data exchange with ANAF
2. Electronic journal (no paper journal)
3. Data backup
4. New data on receipt layout
5. More item information
6. Fiscalized invoice with customer data and customer tax ID (CIF)
7. Additional VAT rates
8. Additional payment types

This means introduction of new specification for the communication and data exchange between ANAF (National Agency for Fiscal Administration) and fiscal printer. The new fiscal device include 2 additional VAT rates (G and H) but currently they are not used. Whole solution in Romania must go through very complex certification process before usage in stores. The fiscal certification in Romania includes two steps:

1. Obtaining the Technical certification in ICI
2. Obtaining the Approval for distribution from Ministry of Finance.

Fiscal law in Serbia is similar to Bosnia and Herzegovina and Montenegro. Serbia was the first country that introduced GPRS in fiscal law. All relevant data is sent to the Serbian Tax Authority via GPRS.

New fiscal law is accepted in parliament in December 2020 and will be applied from January 1, 2022. According to new fiscal law, it is mandatory to send every sales receipt to the tax authority via the internet. Fiscal printers will not be used anymore.

New fiscal law in Slovak Republic has been proposed and discussed during 2018. It demands that all cash registers – both classic and virtual – be converted to new "online cash registers" (called "eKasa" cash registers) and connected with the tax authorities. In other words, all cash registers must have access to the Internet, enabling all transactions immediately to be transmitted to the financial administration and every issued receipt to be recorded in the central memory. Next, one of the major challenges that retailers are facing is PDS – a repository that provides one-time and permanent data entry. The PDS saves, in addition to Cash receipts, Void receipts, Deposits and Withdrawals, other documents that have been printed or sent via the online cash register (e.g. orders, delivery notes, prepaid accounts etc.). All retailers can comply with this new law from 1 April 2019, or must from 1 July 2019. If they have the obligation to register sales under the new law for the first time, they are required to use the e-kasa cashier client from 1 April 2019. However, fines will not be imposed for non-usage of the online devices until 31 December 2019 as long as the code for every particular cash register has been acquired from the authorities on time, and that is 1 July 2019.

Fiscalization in Slovenia is similar to Croatia. At the beginning of 2016, in Slovenia, a new law was introduced which includes the stipulation that every transaction has to be sent to the fiscal authorities for authorization through the Internet. The core of Slovenian fiscal law is the online authorization of every fiscally relevant transaction created at a POS system. That means that business subjects which are obliged to operate according to the new fiscal law are not required to change hardware equipment or to use some special fiscal devices because, as it is said, fiscalization is based on online authorization.