The French Ministry of Finance provides a list of questions on its website concerning the obligation to use a secure cash register.
Below you will find an unofficial translation of these questions into English (no responsibility is taken for the correctness of the translated information). A link to the website of the French Ministry of Finance can be found at the end of this article.
Do you have to have a secure cash register software?
Article 286-I-3° of the General Tax Code (CGI) sets out the obligation for an entity liable to VAT to use a software or a cash register system that satisfies the conditions of inalienability, security, conservation and archiving of data with a view to control by the tax authorities.
Compliance with the four aforementioned conditions (inalienability, security, retention and archiving) can be proven by a certificate issued by an accredited body or by an individual certificate [Note: self-declaration] of the system manufacturer.
The following are subject to this obligation: taxable entities subject to VAT, natural or legal persons, whatever the sector of activity, who make supplies of goods and services not giving rise to invoicing and intended for private customers, as long as they use a software or a cash register system.
Not subject to this obligation are:
- taxable entities who carry out all of their transactions with one or more professionals (B2B), insofar as they are necessarily subject to invoicing;
- entities subject to VAT benefiting from the basic exemption regime mentioned in article 293 B of the CGI , such as micro-entrepreneurs, for example;
- taxable entities subject to the flat-rate agricultural VAT reimbursement scheme provided for in articles 298c of the CGI and 298d of the CGI;
- taxable entities carrying out exclusively transactions exempt from VAT.
A decision tree available on this site can help you answer this question.
What is a cash register software or system?
A cash register software or system is a computer system equipped with a cash register functionality , which consists of memorizing and recording extra-accounting payments received in return for the sale of goods or services, i.e. say that the recorded payment does not generate concomitantly, automatically and necessarily the signing of an accounting entry.
Payments for which the software or system compulsorily triggers, instantaneously and automatically, without human intervention, an entry in the accounting information system, are not considered as recorded extra-accounting, whatever the method of payment.
All software or cash systems allowing the recording of their customers' payments are covered, whatever the mode of payment (cash, checks, CB, transfers, direct debits, etc.).
This obligation applies including in the event of recording on a software or system accessible online.
Are all business management software including a cash register/collection functionality still to be certified by their publishers by January 1, 2018?
Since January 1, 2018, only software and cash register systems, the main vectors of VAT fraud observed, are affected by the measure.
A software, whatever its qualification (cash, accounting or management), which has a cash functionality and which makes it possible to follow the collections of private customers must be certified.
Regarding multi-function software (accounting/management/cash), only the cash register/collection functions, and not the entire software, must be certified.
Are taxable entities covered by the basic exemption or exempt from VAT within the scope of the obligation to hold non-fraudulent software resulting from the cash register software certification measure?
In accordance with Article 286(II)(2) of the CGI, the following are not subject to this obligation:
- taxable entitiess subject to VAT benefiting from the basic exemption regime mentioned in Article 293 B of the CGI;
- taxable entities carrying out exclusively VAT exempt transactions.
Is the scheme limited to transactions with natural persons?
A software or cash register system is a computerised system in which a taxable entity records supplies of goods and services not subject to invoicing, i.e. to private customers.
Accordingly, the scheme applies to:
- taxable entities who make their entire turnover with private customers;
- taxable entities who carry out transactions with both private and business customers.
On the other hand, taxpayers who carry out all their transactions with one or more professionals (B to B) are excluded from the scheme insofar as they are subject to mandatory invoicing.
Do the provisions of the cash register software certification measure apply to branches and subsidiaries of foreign companies?
The scheme applies, with some exceptions, to any taxable entity liable for VAT in France who records payments from his private customers by means of a cash register software or system. Branches and subsidiaries of foreign companies are therefore within the scope of the obligation to have a secure software and system (see BOI-TVA-DECLA-30-10-30 § 20).
Do the provisions of the cash register software certification measure also apply to foreign businesses registered for VAT but not established in France?
The scheme is aimed, with some exceptions, at any taxable entity for VAT purposes in France who records payments from his private customers by means of a cash register software or system.
However, as a matter of administrative tolerance, foreign companies registered for VAT not established in France are not covered by the scheme (see BOI-TVA-DECLA-30-10-30 § 20).
Do the provisions of the cash register software certification measure apply to trade between private individuals via electronic platforms?
[note: E-Commerce]
The scheme is aimed at any entity liable to VAT, except those who are exempt from VAT or who carry out transactions that are exempt from VAT.
Private individuals who engage in e-commerce remain outside the scope of the obligation as long as they are not subject to VAT.
Do e-commerce companies fall within the scope of the obligation to hold non-permissive software under the cash register software certification measure?
The scheme applies, with some exceptions, to any taxable entity for VAT purposes in France who records payments from his private customers by means of a cash register software or system.
The e-commerce companies concerned by the obligation to certify cash register software or systems are those that deal with:
- customers who are not subject to VAT (private customers);
- both customers who are not subject to VAT (private customers) and customers who are subject to VAT (business customers).
E-commerce companies that deal only with VAT-registered customers (business customers) are not affected by the obligation to certify cash register software or systems, as these transactions are subject to mandatory invoicing.
Is electronic payment software excluded from the scope?
Electronic payment software, or electronic payment terminals, are electronic devices capable of reading bank card data, recording a transaction, and communicating with a remote authentication server.
According to this definition, pure payment terminals are excluded from the scheme.
Do the above provisions apply only to cash payments?
No, the system is aimed at all software and cash systems that allow the recording of payment transactions from their customers, whatever the method of payment (cash, cheques, CB, transfers, direct debits).
What is free software, proprietary software, internally developed software?
Free software is software that users can use freely, study freely, modify freely and distribute freely.
Proprietary software is software that does not legally and technically allow the exercise of the four freedoms mentioned above.
Internally developed software is software developed by the taxpayer itself or by a member company of the group or by an external integrator.
These freedoms allow users to adapt the software to their specific needs. The modifications that users may make to the free or internally developed software must not have the purpose or effect of altering compliance with the conditions of inalterability, security, conservation and archiving.
Is a trader with a price computing scale affected by the implementation of the cash register software certification measure?
Regulated measuring instruments, such as scales, equipped with a settlement memory device, which are used both to determine the price to be paid for items based on the quantity measured and to record the settlement, must be certified.
The same applies if several regulated measuring instruments are interconnected or operate in a network, each of which must be certified.
Scales that have a function for storing payment transactions are therefore included in the scope of the measure.
Any VAT taxable entity who owns this type of equipment must therefore be able to prove that its equipment meets the conditions of inalterability, security, conservation and archiving, either by producing a certificate issued by an accredited body under the conditions provided for in Article L. 433-4 of the Consumer Code, or by producing an individual certificate issued to him by the equipment publisher.
On the other hand, scales that do not have a function for storing cash transactions do not fall within the scope of the cash software certification measure.
In concrete terms, it is possible to distinguish between three main types of configuration:
- the use of a weight/price counter scale: the scale must be certified;
- the use of a weight/price counter scale with a certified cash register connection solution: the scale and the cash register must both be certified;
- the use of an integrated touchscreen scale or point-of-sale terminal, which integrates both a weighing and a certified cash register solution: the entire solution must be certified.
Does a trader have to change his weighing and collection system in view of the new requirement to have accounting or management software or a cash register system due to the cash register software certification measure?
This obligation applies to software and cashiering systems that automate calculations and store cash transactions.
Thus, the collection functions must be certified by the publisher or certified by an accredited body.
If the retailer's weighing and collection system cannot be certified or is not certified, he must then acquire new equipment that meets the above-mentioned conditions of inalienability, security, data storage and archiving.
A similar reasoning must be applied to automated drinks dispensers, automatic payment machines or automatic goods dispensers (drinks, cakes, etc.) which have a cashier function. These must therefore be certified.
Is there an obligation for all VAT payers to acquire a secure cash register software?
The scheme provides for the obligation, as from 1 January 2018, for taxable entities liable for VAT who record the payments of their non-taxable customers by means of any cash register software or system, to use compliant software that satisfies the conditions of inalterability, security, conservation and archiving of data with a view to control by the tax authorities.
These new provisions do not create an obligation to equip oneself with a cash register software or system.
The choice of using such software is up to each taxable entity.
If the taxable entity decides to use a software with cash register functionalities to record the payments of his customers, he falls within the scope of this obligation and will have to use a software that complies with the conditions of inalienability, security, conservation and archiving of data.
Can a VAT taxable entity continue to record customer payments using both cash register software and paper invoices?
axable entities are free to use two methods of recording customer payments, one computerised and the other paper-based.
However, as soon as the taxable entity uses software with cash register functionalities, he falls within the scope of the obligation to have a secure cash register software. He will then have to present the certificate issued by an accredited body or the individual attestation from the publisher for the cash register software used.
Updated on 06/04/2022
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