Since January 1, 2018, merchants and traders subject to VAT who use cash register software (or a cash register system) are obliged to use secure software. This cash register software must meet the conditions of immutability, security, storage and archiving of data.
As an independent software developer, fiskaltrust offers a middleware free of licensing costs, which supports legal compliance. Since we are independent of manufacturers and certification bodies, we try to provide neutral information on the topic “Cash Register Regulation 2018”.
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Good to know
A software or POS system is a computer system that provides a cash register function, i.e. it allows the merchant to record and store payments. These operations do not necessarily generate an accounting journal.
The French government intends to use it to combat VAT fraud. The Finance Act of December 29, 2015, includes paragraph 88, which amends Article 286 of the General Tax Code to better combat fraud.
The law has not been amended since then, but has been clarified through various administrative texts (BOI).
However, the time for tolerance is now over!
POS systems are now in the line of fire!
In plain language, merchants are required to use certified or manufacturer-approved POS software.
They can continue to use paper invoices, alone or in parallel. It is not mandatory to purchase cash register software, but if you decide to purchase one and you collect VAT, the software must comply with the law.
And despite the Covid-19, the French financial authorities’ controls are now starting:
Fraude fiscale: près de 7,8 milliards d’euros récupérés grâce aux contrôles en 2020
What are the risks for the cash register operator?
In the event of an inspection, the retailer has 60 days to provide confirmation that it meets the required standards. If it cannot be provided, a fine of €7,500 per cash register can be imposed.
This simple fine applies if you have not updated your POS software, or if you have purchased newer software that was actually non-compliant despite having a certificate or attestation, and if you are acting in good faith.
Because still, according to the current Bulletin des Impôts, “taxpayers who present a falsified certificate to the administration knowing it is a fraud” are subject to the same penalties as the (foreign) manufacturer: a €45,000 fine and three years in prison. (section 40 du Bulletin des Impôts).
In the worst case, there may even be imprisonment or even adjustment under URSSAF.
Cash registers: Why these obligations in 2019-2020-2021?
These obligations for your cash registers stem from a 2016 law to combat sales tax fraud. Cash register software allows transactions to be recorded, and the point of having secure cash register software is for the government to ensure that merchants cannot change transactions after the fact.
Who is affected by these obligations?
In simple terms, this affects all merchants and even more so all traders subject to VAT who record payments through a cash register, software or POS system, regardless of the industry in which they operate. This regulation applies to both physical transactions and e-commerce.
Exceptions are provided for the following cases:
- 100% B2B activities
- Traders who only carry out activities exempt from VAT
- Freelancers who benefit from VAT exemption
- Flat-rate refund scheme for agricultural VAT
- Businesses where all payments are processed directly through a credit institution
Is your cash register compliant with the law?
Your cash register manufacturer/supplier must provide you with an individual certificate. This document is his responsibility and must contain the following information:
- Name and version of the software
- Date of purchase of the software by the customer
- Information on compliance with the conditions of immutability, security, preservation and archiving
Your cash register manufacturer/supplier must provide you with a certificate.
- It must be issued by an accredited body e.g. LNE or AFNOR
- It must include runtime, manufacturer name and address, and software name and version.