The cash inspection (Kassen-Nachschau) has been a central element of financial control in Germany since the beginning of 2018. It ensures the proper cash management and accounting of companies.
In this blog article, we take a closer look at the cash inspection and provide an overview of what you should look out for to be prepared for it.
What is the cash inspection?
The cash inspection is an unannounced inspection of companies' cash records and systems by the tax authorities. It aims to prevent tax evasion and manipulation by ensuring that companies correctly record and pay taxes on their revenue. If discrepancies are discovered during the cash inspection, additional tax reviews, such as a comprehensive tax audit, may be conducted.
What is the legal basis for the cash inspection?
For merchants to avoid possible sanctions, they must be informed about and comply with the legal obligations. According to Section 146b of the German Fiscal Law (Abgabenordnung, AO), the tax authorities have the right to conduct unannounced cash inspections during business hours. They may enter business premises, check documents and read data from cash register systems, but they may not take or open anything.
The contact person is the taxpayer or business owner, but the cash inspection can also take place in the presence of an employee with cash-handling responsibilities. In order to make the process more transparent and to be available at the relevant time, the Chambers of Crafts are calling for the mandatory announcement of a planned cash inspection and more precise guidelines.
What happens during a cash inspection?
A cash inspection can take place without prior notice at any time during business hours. The auditors of the tax office can either appear incognito as a customer and make a hidden test purchase or carry out an obvious audit. In the case of test purchases in publicly accessible business premises, auditors do not have to identify themselves. Still, they must do so if access to further documents is required.
The following factors are examined:
Is an electronic and tamper-proof cash register system in place?
The tax authorities check whether a cash register system is used that enables the keeping of electronic records. Particular attention is paid to whether the system meets the legal requirements and whether the data is protected against subsequent manipulation. The interface for exporting data is regulated in the Digital Interface of the Tax Administration for Cash Register Systems (DSFinV-K).
Are cash records properly maintained?
This includes, among other things, the continuous numbering of receipts, the recording of the date and time for each transaction, the accurate recording of income and expenses, and the indication of the payment method.
Are cash records kept correctly?
Checks are carried out to ensure that the legal requirements for retaining cash register records are complied with. The retention period for companies and self-employed persons is generally ten years.
Do the cash balance and records match?
It is checked whether the cash on hand corresponds to the recorded income and expenses and whether the cash management is documented without gaps.
In the case of a cash inspection, the checks are usually carried out by inspecting the cash register records, reading out the electronic data, and questioning the business owner or employees. The aim is to ensure that cash management is correct and transparent in order to prevent potential manipulation and tax evasion.
How to be prepared for the cash inspection
If the main contact person (such as management) is not always available, it is important to inform employees who regularly handle the cash register about a possible inspection and its requirements so that they can communicate with the auditors.
The cash inspection pays particular attention to the cash register systems used. These must comply with legal requirements and be tamper-proof. After the expiration of transitional periods at the beginning of 2023, the German Cash Register Security Ordinance (Kassensicherungsverordnung or KassenSichV) states that all electronic cash register systems must be equipped with a certified technical security system (TSS). It is particularly important that the used TSS is certified by the BSI (Federal Office for Information Security) and that regular updates are carried out.
The cash inspection also checks for compliance with record-keeping requirements. Retailers must record and store their receipts without gaps. If an electronic cash register system is already in place, the audit is completed within a very short time, as all relevant data is automatically recorded and can be retrieved in a tamper-proof manner at any time. The cloud-based and KassenSichV-compliant TSS from fiskaly can be easily integrated into your POS system.
Due to the receipt issue obligation, the cash register inspection in the form of a test purchase with a visual inspection can also be carried out quickly, as relevant secured TSS data is visible directly on the receipt via a QR code. If the QR code is not integrated on the receipt, access to TAR files with extended TSS data is required via the TSS in order to successfully complete the cash inspection.
To be prepared for a cash inspection, merchants should take several important measures. These include careful documentation of business transactions, regular training of employees in the use of the POS system, and compliance with the legal requirements for storage periods.