bmwi_logoAfter years of hesitation, the federal German government takes up the fight against manipulated receipts. Until the draft bill, (“A draft law for protection against manipulation of digital recordings”) presented in March 2016, there was no special requirements in Germany, to deal with manipulated cash registeres. The lack of this regulation resulted in a growing number of taxpayers found to be manipulating sale data records from year to year. Recently, in July 2016, the draft bill was supplemented with amendments which was further defining the individual articles of the previous draft bill and prolonging date of the law implementation.

The bill is based on measures which consist of three main components:

  • Compulsory use of a technical safety device when using an electronic recording system.
  • Introduction of a cash-lookup.
  • Sanctioning offenses.



  1. Measure: Technically safe devices are mandatory

Previous experience in audits shows that the current devices used on the market are not safe enough to stop manipulations in digital recordings. In order to ensure the correct taxation, according to the draft law, electronic receipts must be complete, accurate, timely and orderly recorded and saved on a safe storage medium. The use of the prescribed cryptographic application is mandatory.

Every electronic recording system (cash register) must have a certified security device, which is consisting of three components: a security module, a storage medium and a digital interface.

The security module ensures authenticity of the recording activity and eliminates hidden manipulation with issued receipts. Storage medium keeps individual records safe for a long period, enabling any time direct receipt verification and audits. The digital interface ensures a smooth transfer of recorded data for audit purposes.

The Federal Office for Information Security (BSI) must define the technical requirements for the technical safety devices and certification procedure.

  1. Measure: A cash-lookup

Draft bill defines cash-lookup as an inspection, which is complementing the existing audits. Through an unannounced cash-lookup during normal business hours tax inspector can enter the taxpayer’s premises, to check the regularity of cash recordings and the cash-based receipts locally. Only commercial premises can be inspected in this way. In addition to computer-based POS systems and cash registers, open tills should be checked also. Electronic data shall be transmitted via digital interface or ready to be copied on a data carrier.

  1. Measure: Sanctioning offenses

Draft bill contains new penalties in the case that:

  • a system is used to register sales that does not meet legal requirements
  • security device in electronic record systems is missing or is not used correctly.

The penalties are increased up to EUR 25.000.

The law will come into force the day after its promulgation. But as announced in July, draft bill it will be effective in fiscal year beginning after 31/12/2019. This represents a change from the draft bill released in March which announced 2018 for the first-time application start.

The development of technical security modules for electronic recording systems will take some time to complete. In addition, after completion of this development work, the BSI must determine whether the relevant security device complies with the statutory requirements and have passed certification procedure. Existing POS systems may continue to be used until 2022. If a taxpayer owns a cash register purchased after 25.11.2010 or purchase it before 1.1.2020, cash register can be used latest until 31.12.2022. This exemption is valid only if it is not possible to upgrade cash register with a secure device. If an upgrade with secure device is possible, the transition period does not apply. This upgrade must be retrofitted until 1.1.2020.

The main concerns related to the technical solution of the new bill was in doubt whether the system should be open and acceptable for all participants in process of fiscalization (to have vendor-independent design), or to be tied to one single technical solution. Final decision as by draft bill stipulates open technical solution. The solution is probably similar to a general European fiscal solution based on a smart card as secure element, which actually is an integral part of the fiscal solutions in Austria and Belgium.

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