Fiscalization

In August, the Croatian newspapers have published two articles. Both speak of the increased tax inspection activity which are resulted by the report obtained from the Croatian online tax system.

1) Over 300 inspectors are on the hunt for tax evaders from Dubrovnik to Istria, the rest of Croatian taxpayers are peaceful

“The field inspection on the Adriatic Sea takes place literally day and night, and during surveillance special smartphone applications are used which in real time monitor whether invoicing on fiscal cash registers correspond to the real situation in the shop.

Only four in ten always take receipt issued by certified cash register when they visit restaurants or cafes. When they buy clothing, electronics, books, or building materials, it is twice as many, 85%, who always ma
kes sure they receive confirmation of their purchase, according to a survey conducted by the Tax Agency. Women and older people are taking far more often than younger receipt and men.

Tax Agency’s interest in how often people look to get a receipt. Is there incentive in the desire to curb evasion in cash sector?

“The suspicions which I raised last week were proven true. There are gas stations, where 40% of the fuel offered is bad quality. Not to mention the presence of sulfur. The inspections will continue in all directions and everywhere,” the Prime Minister said, quoted by BGNES.

In most cases, the seals on the dispensers were placed so that they allow for release of test fuel without compromising the integrity of the device, Goranov said, pointing out that last week inspections took place at certain gas stations and a number of violations in fuel trade were detected.

It was reported that during 63 inspections carried out over the past days, Greek authorities encountered 33 violations and 39 offenders, while delinquency rate exceeded 50%.

Inspectors involved in the audits indicated that new methods are being implemented in order to conceal tax evasion. Several business owners are tapping into their cash registers in order to make their daily turnover appear lower than it really is, while also making it appear as if the business has issued the right amount of receipts. This decreases VAT revenue for the state, while authorities are not able to detect any form of tax evasion.

If receipt doesn’t contain verifiable signature committing a fraud is very simple, for example: POS software can be connected to more than one printer mechanism.

The start of the summer season for taxpayers in Croatia always means business with highest turnover and a lot of work. Some of them are also trying real hard to avoid paying taxes and this calls for higher engagement of the tax inspectors who are moving around Adriatic coast every summer, especially in the time of big concerts and festivals.
At the beginning of this year’s session, Tax Police published information of the inspections conducted in the period between June 15-30. Inspectors visited 625 taxpayers, and in 24% of the examined cases found irregularities on the basis of the current Fiscal Law. Some 7% of examined taxpayers were sanctioned by temporary cessation of their business activities due to the failure to issue fiscal receipts and failure to make payments of declared tax in the prescribed time.

2 million fiscal cash registers in Turkey will be replaced this year with a new generation of devices approved by the Turkish Revenue Administration.

Within the new framework of the fight plan against underground economy the traditional security on fiscal cash registers is upgraded to a so-called new generation devices.

The transition started in 2013 when nearly 120.000 merchants choose benefits over the mandatory compliance requirements to issue fiscal receipts. Benefits such as remote device service diagnostic, PLU management, processing credit card transactions, etc all within a single device on a merchant’s counter. Many traders however are comfortable with older devices and will wait to adopt higher security devices until the final deadline call for upgrade.

Newly formed and partially recognised state of Kosovo, starting April 1st 2015 (no joke) has announced a monetary prizes to all citizens who bring their fiscal receipts to Tax Authority. This measure is also mandated by the law as an incentive and motivation for taking fiscal receipts. Rather than using lottery to draw winners, this young institution has decided to award everybody who is being compliant.

The formula states as follows:

Every month we can find one new jurisdiction who is challenged to combat shadow economy with the use of innovative tech tools. Some will say nothing new here, it’s been happening for over 30 years, and that is true. However in the past this technology was too robust and too complex to install without strong enforcement imposed on taxpayers who are required to meet compliance and obtain certified devices in accordance with whatever procedure has been set, usually involving few licensed suppliers. Modernization brought changes and made certified compliance mechanisms user friendly in a spirit of telecom operators who already have great market coverage.

Offerings are now becoming more appealing to a business model suitable for operator’s relationship with merchants. Here are few examples:

The Czech government submitted for comments a draft law on electronic registration of sales as new modern variant of cash registers.

The new obligation should touch up 600,000 merchants, restaurant operators, hoteliers, craftsmen and providers of other services.

The law should begin to apply January 2016 and will be introduced in phases.

Since January 2016, the electronic records should apply to companies that do business in catering and accommodation services. From April retail and wholesale companies will be included in the system. Since July, revenues should also report individuals who operate a restaurant, hotel or store…