Information Leaflet
CASH REGISTERS
and the obligation to maintain proper books and records
to determine tax liability or entitlement to deductibility
Table of Contents
1. Introduction 2
2. Obligation to keep records 2
3. Cash Registers 4
4. Requirements for retailers 5
4.1 Cash Register or EPOS system 5
4.2 Management of cash register data 6
4.3 Security of cash register data 7
5. Requirements of the Revenue Commissioners 8
6. Further Assistance 9
Appendix 10
VAT Regulation 8(1) (a), (b) of the Value Added Tax Regulations,
2006 (S.I. No. 548 of 2006) (as amended by the VAT Regulations
S.I. No. 238 of 2008).
1. Introduction
This information leaflet is intended for all businesses that use
a cash register or Electronic Point Of Sale (EPOS) system.
This information may also be of benefit to (tax) consultants and
suppliers of software used in electronic cash registers or EPOS
systems. Information on the retention of Revenue records in
electronic format was previously issued in Tax Briefing, Issue 46 in
December 2001 (see pages 24 and 25). This article is accessible
on www.revenue.ie > Tax Practitioners > Tax Briefing > archive >
2001.
The statutory obligations to keep records for tax purposes are set
out in Section 886 of the Taxes Consolidation Act, 1997; Section 16
of the Value Added Tax Act, 1972; and Regulation 8, of the Value
Added Tax Regulations, 2006 (S.I. No. 548 of 2006) (as amended
by the VAT Regulations S.I. No. 238 of 2008).
The purpose of this information leaflet is to highlight changes to
Regulation 8, which came into effect on 2nd July 2008. A copy of
Regulation 8(1) (a), (b) as amended by the VAT Regulations S.I.
No. 238 of 2008 is attached in the Appendix.
2. Obligation to keep records
The statutory requirements in relation to VAT set out the extent to
which every accountable person is obliged to keep up to date a full
and true record of all transactions that may affect their liability to
tax and/or entitlement to deductibility.
In respect of payments receivable from VAT registered persons
(mainly other businesses), the records must include the amounts
in respect of every transaction for which an invoice or other
document is required to be issued, with a cross-reference to that
invoice or document.
In respect of payments received from persons not registered for VAT
(mainly non-business customers), a daily total of the consideration
receivable must be retained. This total must be cross-referenced
to any relevant records or documents (such as cash sheets
and stock control reports) that are in use for the purpose of the
business. From July 2008, where an EPOS system or electronic
cash register is used, a complete record of each entry on that
register or system must be retained and each entry must include a
sequential number that uniquely identifies the entry, together with
the date and time of such entry.
Cash register records and supporting documents, either paper or
electronic, are generally required to be kept, in a readable format,
for a period of 6 years (see Section 16 of the VAT Act). This should
be borne in mind when purchasing an electronic cash register to
ensure it has the memory capacity to meet both the needs and tax
obligations of the business.
Records may be stored by an electronic process, provided that
the records can be displayed, printed and reproduced in an
intelligible form. These records must be stored in such a manner
as to make them readily accessible for subsequent reference. This
requirement is set out in Section 887 of the Taxes Consolidation
Act, 1997 (which also applies to VAT) and in Regulation 10 of the
Value Added Tax Regulations 2006, (S.I. No. 548 of 2006), which
deals with electronic invoicing.
3. Cash Registers
A cash register or EPOS system, which is either standalone or
networked, is a business tool to record details of receipts for sales
easily and accurately. Cash registers issue receipts and maintain
details of each transaction either electronically or on a till roll.
There is a wide range of makes and models of electronic cash
registers available for use in business and each performs a variety
of different functions, from logistical support to gathering statistics
and performing checks and balances on cash transactions. In
using a cash register or EPOS system, businesses acknowledge
the need to properly record all transactions and sales associated
with the business.
Cash register transaction records, both electronic and in paper
format, enable businesses to balance their accounts on a daily
or periodic basis. They also form part of the books and records of
the business, which a business is obliged to keep when complying
with their tax obligations.
4. Requirements for retailers
The following checklist will assist retailers in checking that their cash
register or point of sale system meets their business requirements
and their tax obligations.
4.1 Cash Register or EPOS system
Organisation of books and accounts
.
Does your cash register meet the obligation to keep records
considering the nature, size and complexity of your business
activities?
.
Will you be able to control the business processes using this
cash register?
Transaction Data
.
Does your electronic cash register record and retain entries
in electronic format, and are all entries uniquely identifiable
by sequential number, date and time? This is mandatory
from July 2008.
.
Can the transaction data be electronically audited?
.
Has the electronic journal or tally roll been retained?
NOTE:
The statutory obligations are that all transactions are
capable of being produced or reproduced for a period of 6 years.
Where data was recorded electronically, you should retain it
electronically, and you must be able to produce or reproduce it at
short notice. Where the electronic cash register has insufficient
memory capacity for holding all data, you should make regular
backups to another medium.
Reporting
Does the cash register have the capacity to make reports
to meet the demands of the business? Are these reports
retained?
For example: Z total reports.
The Z total reports are summaries of certain data,
and therefore they do not contain any detailed data
at transactions level. The Z total reports and all data
supporting the reports will need to be retained. Transaction
data can be retained by means of the electronic journal
or the tally roll. Does the transaction data state the
amount, date, time and unique sequential number? This
is mandatory from July 2008.
4.2
Management of cash register data
Accessibility of data within a reasonable period of time
.
Is the data being retained in such a manner that it is in a
legible format and accessible within a reasonable period of
time where a Revenue inspection is being conducted?
.
Can the data be independently verified?
.
Can the data be reproduced within a reasonable period of
time in the event of a system upgrade or where a new (cash)
payment system has been introduced?
System settings
.
Are the details of the system settings being retained?
.
Are changes to the system settings recorded with the
transaction data?
Memory capacity
.
Does your cash register have sufficient memory capacity to
retain all transaction data for a period of six years? If not,
you must upgrade your memory capacity or back up the
transactions data in such a way that it is capable of being
reproduced in both electronic and printed format.
Replacing a cash register
.
Can your new cash register restore electronic transaction
data from the old cash register, EPOS storage system or
backup devices? If not, the cash register to which the original
data relates will need to be retained until the retention
period for the records on the backups has passed, or the
data transferred in its entirety to another medium that can
recreate the data if required.
4.3 Security of cash register data
Securing data
.
Is the transaction data secured against inappropriate
changes later on?
.
When securing the transaction data from the electronic
journals or the cash register tally rolls, the data must be
secured in such a way that the data will not be lost and cannot
be manipulated.
Audit trail
.
Is the data retained and secured in such a manner that
changes to the original data can be traced?
Back-up
.
Is the data properly physically secured in the event of fire,
theft or breakdown etc?
.
Archive procedures should ensure the integrity and readability
of electronic transaction data throughout the storage period.
Where data is encrypted the business should ensure that the
encryption keys are held along with the data.
If you have any questions regarding the capabilities of your cash
register, contact the supplier of your cash register and/or software
provider.
5. Requirements of the Revenue Commissioners
Cash registers and point of sale systems, together with the records
created or produced by them, form part of the records required to
be retained by a business for tax purposes. These registers or
systems and associated records may be required to be produced
for inspection by the tax authorities at any time. In particular, in
the event of a Revenue visit they may be subject to inspection.
The electronic cash register and point of sale system records
are required to have the date, time and sequential number that
uniquely identify each transaction. This is mandatory from July
2008.
Failure to comply with these obligations can result in prosecution,
the charging of interest and penalties on any underpayment of tax
and inclusion on the tax defaulters’ list for publication.
6. Further Assistance
Having read this information leaflet, if you have any questions:
.
As a retailer please contact your local Revenue office, details
are available using the Contact Locator on the homepage of
the Revenue website www.revenue.ie.
.
As a tax agent please contact your client’s local Revenue
office or for technical issues contact Revenue’s Technical
Services through the secure email service accessible on the
Revenue website www.revenue.ie under Tax Practitioners.
.
As a software provider for cash registers please contact
Revenue officer Eoin Gibson on 053-9149456.
.
On any Revenue operational policy in relation to this
information leaflet contact Revenue officers: Sean Nolan on
01-4244277, or John Morrissey on 01-4244322.
This information leaflet is available, and can be reproduced, from
the Revenue website -www.revenue.ie.
If you are a person with a disability and require this leaflet
in an alternative format the Revenue Access Officer can be
contacted at accessofficer@revenue.ie.
NOTE. This information leaflet is intended as an explanatory note
only and not a definitive interpretation of either the VAT Regulations,
VAT Act or the Taxes Consolidation Act.
Appendix
VAT Regulation 8(1) (a), (b) of the Value Added Tax Regulations, 2006
(S.I. No. 548 of 2006) (as amended by the VAT Regulations S.I. No. 238
of 2008).
VAT Regulation 8(1)
“The full and true records of all transactions which affect or may affect
the accountable person’s liability to tax and entitlement to deductibility,
which every accountable person is required to keep in accordance with
section 16 of the Act, shall be entered up to date and include
(a) in relation to consideration receivable from registered persons i.
the amount receivable from each such person in respect of each
transaction for which an invoice or other document is required to
be issued under section 17 of the Act, and
ii.
a cross-reference to the copy of the relevant invoice or other
document,
(b) in relation to consideration receivable from unregistered persons i.
a daily total of the consideration receivable from all such persons,
ii.
a cross-reference from that daily total to the relevant books
or other documents which are in use for the purposes of the
business, and
iii.
where the accountable person uses an electronic cash register
or point of sale system the complete record of each entry on that
register or system, uniquely identified by sequential number, date
and time of such entry,”………….