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Modification of cash registers: What to consider when it comes to tax.

In the letter dated 21 August 2020, the Federal Ministry of Finance provides information on how the costs arising from the implementation of the certified technical security systems (TSS) are to be treated for tax purposes.

The following applies in the tax treatment of the costs of implementing TSS and the uniform digital interface:

Cloud TSS

Ongoing charges incurred for cloud TSS are "regularly deductible immediately as business expenses"

Hardware TSS

If a TSS consists of a USB stick, a memory card or similar, it is an independent asset that cannot be used independently. The acquisition costs must therefore be capitalised and depreciated over the normal useful life of three years.

If the TSS is installed as hardware directly in a cash register, it is not an independent asset. The expenses are therefore subsequent acquisition costs of the asset and are to be depreciated over its remaining useful life.

Implementation costs

The expenses for the implementation of the TSS are incidental acquisition costs of the asset TSS.

Simplification rule

In addition, there is a simplification rule, this states:  "For simplification reasons, it is not objected if the costs for the subsequent initial equipment of existing cash registers or cash register systems with a TSS and the costs for the initial implementation of the uniform digital interface of an existing electronic recording system are immediately deducted in full as business expenses."

The letter of the BMF is available on the website of the Federal Ministry of Finance.