The draft Act on Electronic Sales Records (hereinafter referred to as the “Act on Electronic Sales Records”) passed its first reading at the beginning of July. Pursuant to the Act on Electronic Sales Records, each cash receipt of a business operator shall be registered at the moment of payment via the internet in the central data repository of the Financial Administration (Finanční správa). Through the introduction of electronic sales records, any fraudulent conduct by a business operator should be easily recognisable to the Financial Administration and it should consequently be able to target inspections more efficiently where discrepancies arise. The original plan of the legislators was for the Act on Electronic Sales Records to enter into force at the beginning of 2016. Although the legislative assembly of the Czech Republic is apparently behind with the approval of this Act, it could enter into force as early as next year. The Act on Electronic Sales Records shall also apply to operators of internet shops. We have therefore decided to summarise the most important points of this Act in this legal circular.

First and foremost, it is necessary to define the circumstances under which the Act on Electronic Sales Records will also apply to operators of internet shops (hereinafter also as “taxable person” or “operator”). Electronic sales records will apply to the sale of goods via the internet where the operator accepts forms of receipts defined by the Act – in particular cash or payment cards. This may therefore also involve the sale of goods delivered by courier service if payment is made on the spot in cash or by payment card, or if the purchaser pays for goods via a payment gateway on the website of the given merchant, including payments by payment card.

Several basic obligations should arise for operators from the Act on Electronic Sales Records. Firstly, before accepting the first recorded receipt, the taxable person has an obligation to submit an application for authentication data to the materially competent tax administrator. On the basis of this application, the tax administrator shall enable the taxable person to obtain one or more certificates. The taxable person must ensure that misuse of data from these certificates cannot occur. The taxable person must also communicate to the tax administrator data concerning the establishments through which it will carry out activities from which recorded receipts will arise.

Further obligations of operators of internet shops concern the cash registers themselves. Operators’ cash registers should immediately after payment has been made send to the tax office information relating to the specific receipt, namely the total amount, method of payment, the taxable person’s unique security code, data on the order of the receipt, identification of the establishment and, where the trader is a VAT payer, the amount of this VAT. Operators will have an obligation to issue a receipt which will contain the data required by the Act. These data will be almost the same as the data sent to the tax office; additionally, they will contain a unique identifier of the given receipt. In these points, the Act places demands on the technical equipment of operators, because not all cash registers will be capable of these activities.

Furthermore, the operator of an internet shop has an information obligation to have located at the place where recorded receipts are ordinarily made a sufficiently visible and legible information notice. In many cases, this will be on the merchant’s website, as card payments will be made there via the payment gateway.

The tax administrator’s authority competent to verify the fulfilment of obligations arising from the Act on Electronic Sales Records will have the possibility to conduct test purchases at operators in order to verify whether operators are fulfilling the obligations laid down by this Act. Operators should be prepared for this; otherwise they will face the threat of fines for administrative offences specified in this Act.

From the Act on Electronic Sales Records, the legislator promises a reduction in tax evasion and the so-called grey economy, and thereby also a greater contribution of money to the state treasury. At this moment, it is not certain whether the Act on Electronic Sales Records will actually enter into force at the beginning of 2016, as it will be necessary to adopt several implementing regulations together with this Act.

Kamil Žylka

Law Firm Mašek, Kočí, Aujezdský www.e-Advokacie.cz – online legal advisory services

This text was originally prepared by the law firm Mašek, Kočí, Aujezdský in cooperation with the Association for Electronic Commerce (APEK) as legal circular No. 7/2015 intended for members of this association.

This text was translated from Czech to English using an AI translator.