Republika Srpska – Fiscalization 2

Today, taxpayer registration for the second phase of Fiscalization 2 in Republika Srpska (an entity of Bosnia and Herzegovina) has been completed.

In 2007, Republika Srpska implemented Fiscalization 1 in which the basic fiscalization tool is a fiscal cash register or fiscal printer. This fiscalization model is hardware-based, requiring fiscal devices to have a fiscal memory that ensures data security and enables data archiving.  

The fiscal memory stores daily reports (not individual transactions) which the system calculates at the end of the day. It sends the data periodically from the fiscal memory to the tax administration server. This functionality is the main disadvantage of this model because operators can manipulate transactions between two daily reports. This means that, at the end of the day, taxpayers may send daily reports altered to their needs. This model does not systemically obliges them to send realistic and truthful reports.

Proven advantages of the new fiscalization model

This new fiscalization model, which the Tax Authorities in Serbia previously adopted, replaces both fiscal cash registers and fiscal printers. Three components replace them:

An AIS (ESIR) – is an accredited Invoicing system, which is a computer program, electronic device, or information system. It serves for issuing invoices or receipts.

An SDC (PFR) – a controller which is connected to a Secure Element and produces audit data. It stores the audit data in its internal memory and enables semi-connected fiscalization scenarios. Also, it can be either external, internal, or virtual.

A secure element (SE) – a smart card, smart SD card, USB token, file, or any similar software or hardware containing a digital certificate issued to the taxpayer to sign invoices, maintain internal counters, and authenticate the taxpayer. The system secure the secure element by a password or by a PIN code and protects it by using appropriate hardware and software measures to prevent tampering and unauthorized usage.

Other important elements are:

• The Electronic Fiscal Device (EFD) is made up of an AIS, an SDC, and the SE, all connected into one system.
• SUF is the backend software tool where the system merges, unpacks, and decrypts all data from the SDC for viewing. This software manages the life cycle of each taxpayer’s system, offering both analysis and reporting.

The AIS, SDC, and SE can be both software and hardware. The Tax Administration approves (accredits) the AIS or external SDC in the final audit. AIS or SDC manufacturers must prove through the accreditation process that their product meets all requirements so that taxpayers or other users can use them in the invoicing process. The accreditation is transferable if the product’s owner has the intention of reselling it, and it is non-transferable if they intend to use it for their own purposes.

The Tax Administration makes a steady process in fiscalization

The Tax Administration owns the secure element, virtual SDC’s, and the backend application that manages:

• Taxpayer registration
• Component accreditation
• Issuance and withdrawal of secure elements
• Invoice signing
• Audit
• Report generation
• Archives all transactions for the legally established period (5-10 years)

In addition to the digital signature, invoices must also have a QR code that serves for invoice verification and invoice audit.

After Serbia modernized its fiscalization model, Republika Srpska did the same with certain modifications. The main difference is that the law introduced a new participant between the Tax Administration and taxpayers, the fiscal operator (OFS), who delivers a single EFD device – the cash register, controller, and secure element in one piece. Each taxpayer receives one EFD, which ensures the elementary possibility of issuing fiscal invoices. If the taxpayer needs a more complex invoice-issuing system (POS, ERP, …), the taxpayer will purchase such an accredited additional system.

Both the picture on the cover of our article and this one above comes from the Republika Srpska’s Tax Authority portal: https://poreskaupravars.org 

In Republika Srpska, in the first phase, the Tax Authority successfully fiscalized 28.000 taxpayers, issuing an average of 1.800.000 invoices daily. In 11 months, all the parties involved, completed the implementation process, including the installation of the backend (SUF) on the appropriate infrastructure and the onboarding of taxpayers.

On March 31st of this year, the Tax Administration concluded the registration of the second phase of taxpayers, consisting of an additional 29.000 taxpayers. The second phase covers all taxpayers who did not issue fiscal invoices during Fiscalization 1 until 2023, including wholesale. These registered taxpayers have a period of 6 months beginning on April 1st to start issuing fiscal invoices. The dynamics depend on the readiness of taxpayers and operators.