Extension of the electronic registration of sales (the ERS) to other branches
The amendment to the Electronic Registration of Sales Act extends the obligation to use electronic registration to the rest of the branches that were exempt so far. The affected ones are craftsmen, lawyers, accountants, doctors or taxi drivers. It is the third and fourth phases of the ERS.
According to the information provided by the Ministry of Finance, the ERS will apply to all activities where there are cash sales with the exception of those where the ERS would prevent the smooth performance of a business activity or where the tax administration can obtain relevant data about the sales of the respective payers from other sources (e.g. entities managing public sources, such as municipalities, districts, non-profit organisations, and also regulated sectors (financial institutions, the energy industry) etc.).
The only exceptions from the ERS are the following:
- Telecommunication services - prepaid cards;
- Gambling games;
- Commercial air transport;
- Blind payers;
- Sale of Christmas fish; and
- Providing social services.
Further, the amendment enables the recording of sales in an off-line regime. The off-line regime enables some entrepreneurs (who fulfil specific conditions) to issue receipts using a pre-printed notebook instead of regular ERS tickets. Subsequently, they will report their sales quarterly in a special regime.
Subjects that can issue receipts using a pre-printed notebook must fulfil the following conditions:
- They are physical persons and non-payers of VAT;
- They do not employ more than two employees; and
- The amount of recorded sales did not exceed CZK 600,000 in the last four calendar quarters.
The entrepreneurs affected by the third and fourth phases will record sales in one period, which will start six months after the act is effective. The amendment was signed by the president on 24 September 2019, and it should be published in the Collection of Laws in October 2019. This is expected to start (the same as VAT changes) on 1 May 2020.
The Ministry of Finance and the Tax Administration are preparing a communication campaign in the following months which will focus on keeping business entities informed and the technical part of the ERS. Entrepreneurs can find more information about the ERS on the official web sites of the Ministry of Finance and the Tax Administration of the Czech Republic (https://www.etrzby.cz).
