Fiscal Verification of Invoices – Fiscal Cash Registers

On July 15, 2015, the National Assembly of the Republic of Slovenia adopted the Act on Tax Verification of Accounts (hereinafter ZDavPR), which entered into force on January 2, 2016 and on the basis of which the tax certification of invoices is mandatory for all issued invoices that are paid in a manner defined by law as cash payment. This prescribes and determines a system in which taxpayers’ cash registers are connected via the Internet to the central information system of the Financial Administration of the Republic of Slovenia and through which the Financial Administration confirms and stores data on invoices for cash transactions in the process of issuing them in real time.

For each delivery of goods and services, the taxpayer must issue an invoice via an electronic device that meets the prescribed conditions and enables the invoice confirmation process to be carried out, and hand it over to the buyer of the goods or the customer of the service . The invoice must be issued no later than when the delivery has been made and payment in cash has been received. Likewise, the liable party must post a notice in a visible place about the obligation to issue an invoice and deliver the invoice to the buyer, as well as the buyer’s obligation to receive and retain the issued invoice.

1. PARTIES FOR TAX CERTIFICATION OF INVOICES

Pursuant to Article 3 of the ZDavPR, the person liable for tax certification of invoices is any person who, according to the Tax Procedure Act (first and second paragraph of Article 31 of the ZDavP-2), is obliged to keep business books and records in accordance with this Act and who, in cash transactions, must issue an invoice for the supply of goods and services.[1]

A taxable person is not considered to be liable for tax certification of invoices in the case of supplies that are defined as exceptions to the obligation of tax certification of invoices according to the ZDavPR.

1. supply of goods made by a taxable person who is not based in the Republic of Slovenia and for which the place of supply according to the regulations governing value added tax is considered the Republic of Slovenia, if the total value of these supplies in the current calendar year or in in the previous calendar year exceeds 35,000 euros, or if the supplier decides that, regardless of the fact that the value of his supplies in the current calendar year does not exceed this amount, the place of these supplies is the Republic of Slovenia;
2. supply of telecommunication services, broadcasting services or electronic services by a taxable person who is not based in the Republic of Slovenia to persons who are not taxable persons, according to the regulations governing value added tax;
3. continuous supplies of goods and services to the client, in the activities of electricity, gas and steam supply, water supply, sewage and waste management, and in telecommunications activities, carried out on the basis of a supply contract concluded between the supplier and the client, whereby the supplier issues invoices en masse, using an automatic data processing system, separately from the cash desks, periodically at pre-arranged time intervals, for payment via a universal payment order, and the invoices are served to the customer via a postal service provider, electronically or in another comparable way, the payment of the invoice is made subsequently, after the issuance of such an invoice and is not directly related to the individual supply of goods or services.

A taxpayer who issues invoices in several different activities is not considered a taxpayer only with regard to issuing invoices for supplies that are specified as exceptions under the ZDavPR. For all other activities, he is considered a taxpayer.

Therefore, anyone who fulfills all of the following three conditions is liable for the implementation of the tax invoice verification procedure:

1. must keep business books and records,
2. must issue an invoice for the supply of goods or services (a supply invoice that is subject to taxation under the Value Added Tax Act (hereinafter ZDDV-1) and must be issued in accordance with ZDDV-1, i.e. an invoice that must to be issued by the taxpayer in accordance with Slovenian tax regulations) and
3. delivered goods or services are paid for in cash (cash according to point 4 of Article 2 of the ZDavPR).

Therefore, taxpayers who:

• there is no need to keep business books and records or
• it is not necessary to issue an invoice according to ZDDV-1 (there is no obligation to issue an invoice according to ZDDV-1) or
• the invoice for the supply of goods or services is not paid in cash (payment in cash according to point 4 of Article 2 of the ZDavPR).

More explanations are available at Tax cash registers and tax confirmation of invoices

2. HOW IS THE PROCEDURE OF TAX APPROVAL OF INVOICES CARRIED OUT AND WHAT WE NEED

The method of issuing and confirming invoices must be defined by the taxpayer with an internal act. He can decide between using an electronic device and using a bound account book. In these case, he may not use an electronic device for issuing invoices in the same business premises.

Therefore, two ways of issuing invoices are possible:

• by using an electronic device for issuing invoices and by confirming the invoice at the time of its issuance (obtaining EOR[2] = written on every invoice issued (with exceptions) => the buyer can immediately check whether the invoice has been confirmed. Taxpayers’ cash registers are connected via the Internet to the central information system FURS, which confirms and stores data on invoices in the process of their issuance in real time;
• using a bound book of invoices (VKR) and subsequently sending information about invoices issued in this way within 10 working days from the date of invoice issuance via an electronic link => the buyer can check whether the invoice has been reported to FURS after the deadline for confirmation.

The FURS published detailed technical instructions on its website at link, where news about changes and malfunctions are also published.

2.1 CASH BUSINESS

Payment methods that are considered cash transactions and for which tax confirmation of invoices is required:

• payments with banknotes and coins;
• payments by payment or credit card, check and other similar payment methods (e.g. cryptocurrencies);
• other payment methods, which are not direct transfers to a transaction account opened with a payment service provider, which is the majority of payment platforms for online purchases that do not have the status of a payment service provider, e.g. Stripe, Braintree or Paymill. This also includes payment in kind;
• credit notes and debit notes issued to the originally issued and confirmed invoice must also be confirmed.

Payment methods that are not considered cash transactions and for which invoices do not need to be tax certified:

• payments that are direct transfers to a transaction account opened with a payment service provider (UPN order);
• payments via the VALU Moneta system, PayPal (they are payment service providers);
• offset and compensation;
• payments with a free gift voucher

Based on the data sent, FURS will not be able to determine who paid what and with which payment or credit card. Taxpayers can send all invoices (not only those paid in cash) for confirmation.

2.2 BUSINESS PREMISES OF THE OBLIGATOR

The taxpayer submits data on business premises to FURS for the purposes of implementing the invoice verification process. Data on business premises must be sent to FURS once, namely before the first sending of an invoice relating to the business premises. In the case of a change of business premises, the changed data on the business premises must be sent according to the same procedure. This obligation is necessary so that FURS is aware of where or in which business premises the taxpayer issues invoices for cash transactions. For this purpose, the taxpayer must also take an inventory of business premises and determine the labels of business premises

Any immovable or movable premises in which the liable party permanently, occasionally or temporarily issues invoices for the supply of goods or services in cash transactions is considered a taxpayer’s business premises;

• an immovable business premises can be a part or several separate parts of an immovable premises in which various activities are carried out;
• movable space is any movable object or electronic device for issuing invoices.
• An electronic device for issuing invoices is considered a business premises of the taxpayer in cases where the invoice is not issued within the framework of a movable object;

Business premises are also considered any immovable or movable premises in which invoices are issued using a bound invoice book.

2.3 ELECTRONIC DEVICE FOR TAX VALIDATION OF INVOICES

An electronic invoicing device is an electronic device with installed software, which, in accordance with Article 38 of the ZDavP-2, must not allow the deletion, adjustment, correction, annulment, replacement, addition, hiding or any other modification of any record stored in the device or on another medium, without saving the original data and all subsequent changes).

It must enable the possibility of establishing an electronic connection (internet or GPRS) with the FURS information system and the possibility of signing messages with a dedicated digital certificate.

The corresponding software must not enable the issuance of unconfirmed or incorrectly confirmed invoices, and the copy of the invoice must be marked with “copy” next to the invoice number and the serial number of the copy must be indicated. The computer program, electronic device or information system must provide a printout of data on all issued copies of invoices, showing the time of issue of each copies.

2.4 ACCOUNT FOR CASH TRANSACTIONS

“Invoice” is an invoice for cash transactions, issued for the supply of goods or services, which is partially or fully paid in cash. Any advance payment invoice received before the delivery of goods or services is also considered an invoice.

Apart from the information already required on the account according to ZDDV-1 and ZDavP-2, according to ZDavPR the following is additionally required:

• time of invoice issuance (hours and minutes),
• identification of a natural person who issues an invoice using an electronic device for issuing an invoice,
• one-time account identifier (EOR) and
• Invoice Issuer Security Mark (ZOI[3]).

Despite the fact that data on issued invoices are sent to FURS, it is necessary to keep copies of all issued invoices in accordance with ZDavP-2 and ZDDV-1.

The invoice number must consist of three parts for the purposes of the invoice confirmation and invoice issuance process, namely:

1. marks of the taxpayer’s business premises;
2. labels of the electronic device for issuing invoices and
3. serial numbers of the account.

The serial numbers of the invoices from the previous paragraph must follow each other in a continuous sequence every business year through each business premises of the taxpayer or through the electronic device for issuing invoices in the business premises of the taxpayer. EOR and ZOI are account identifiers, not account numbers.

The taxpayer prescribes the rules for assigning consecutive invoice numbers, makes an inventory of the taxpayer’s business premises and assigns labels to the taxpayer’s business premises in an internal act, namely before the start of issuing invoices for cash transactions. The taxpayer submits the internal document in the control procedure at the request of the tax authority.

Invoice example

2.5 “MINI CASHIER” APPLICATION FOR TAX CONFIRMATION OF INVOICES

The Mini cash register application is a computer program on the FURS website suitable for taxpayers who issue a small number of invoices, through which:

• payable persons can issue invoices with EOR labels and
• In the tax confirmation, they send information about:
  • issued invoices from the bound invoice book and
  • business premises where they issue invoices, if they do not have other software at their disposal.

In order to use the mini cash register, taxpayers do not need to purchase dedicated software for issuing and confirming invoices, but a dedicated digital certificate for tax cash registers is required.

2.6 USE OF BOUND ACCOUNT BOOK – VKR

As of January 1, 2018, a permanent option to choose the use of a bound book of invoices for issuing invoices has been enabled. A taxpayer using a bound invoice book must send the tax authority via electronic link information on invoices issued using a bound invoice book by the tenth day of the month following the month in which the invoice was issued. For this purpose, it needs a digital certificate, as described under point 2.5.

The taxpayer will have to keep copies of the invoices from the VKR together with the certificate of subsequent acquisition of the EOR.

More answers at the link Tax cash registers and bound books of accounts (VKR).

2.7 OBLIGATIONS OF THE OBLIGATOR

The main obligations of the taxpayer imposed by the ZDavPR are:

1. Obtain a dedicated digital certificate for tax offices;
2. Describe business premises;
3. Approve an internal act – before starting to issue invoices – assigning tags to business premises and rules for assigning serial numbers, determine tags to electronic devices and tags to natural persons who issue invoices (including taxpayers who use VKR); is not sent to FURS, it will be necessary to show it in control;
4. Adjustment of the content of the invoice issued from an electronic device – invoice number (three-part), additional information on the invoice (EOR, ZOI, identifier of the natural person issuing the invoice, hour and minute of the invoice);

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5. Before starting to issue invoices for cash transactions, communicate information about all business premises in which invoices are issued to the tax authority (including taxpayers who use VKR – via the mini cash register application ) and use a dedicated digital certificate:

• • for identification purposes in the process of electronic data exchange with FURS and
  • for electronic signing data on business premises in which it issues invoices;

6. Perform the process of confirming invoices (including taxpayers who use VKR), when performing the process of confirming invoices, use a dedicated digital certificate for identification purposes in the process of electronic data exchange with FURS and for electronic signing of account data in to the invoice confirmation procedure, or to confirm the invoice with the tax authority in accordance with ZDavPR and
7. issue an invoice with a unique invoice identifier – EOR (unless the law provides otherwise – see below);
8. When issuing invoices using an electronic device – with a device that enables

• • electronic signing of account information and
  • electronic connection for data exchange with the tax authority;

9. Implementation of the invoice confirmation procedure in case of failure of the electronic connection – Internet (issuance of invoices without EOR mark and subsequent sending of invoices for confirmation);

• • use of a bound book of invoices (VKR) and subsequent confirmation of invoices issued from the VKR.

The new tenth paragraph of Article 81 of the Value Added Tax Act (ZDDV-1) stipulates that the taxpayer no longer has to hand over a paper invoice to the final consumer for the supply of goods or services, unless the final consumer requests it. In accordance with the fifth paragraph of Article 6 of the Tax Verification of Invoices Act (ZDavPR), if the buyer requests a copy of the invoice, the taxpayer must issue a copy that is identical to the original, marked “COPY” and the serial number of the invoice copy.

3. SUPERVISION AND OFFENSES RELATED TO TAX APPROVAL OF INVOICES

Supervision over the implementation of the tax invoice verification procedure and compliance with the ZDavPR is carried out by FURS, and partially also by the Market Inspectorate of the RS (TIRS).

FURS:

• keeps received data on invoices and allocated EOR in the information system for 5 years;
• data is processed only for the purposes of verifying the legality of employment and work and monitoring the correctness of the calculation of taxes and contributions.

Fines for misdemeanors are determined differently, depending on the offender and the severity of the offense.

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Violators	Tax offences	Serious tax offences	Especially serious tax offences
medium or large PO (according to ZGD-1)	5,000 – 75,000	10,000 – 125,000	up to 150,000
other PO	2,000 – 50,000	4,000 – 75,000	up to 100,000
SP or FOD	1,500 – 25,000	3,000 – 50,000	up to 75,000
for responsible persons	800 – 5,000	1,200 – 10,000	up to 20,000

 

Tax offences	Serious and particularly serious tax offences
from 800 to 75,000 euros je, when the offender	from 1,200 to 150,000 euros when the offender
do not use a dedicated certificate for electronic signing of messages when performing the process of confirming invoices or in the process of electronic data exchange with the tax authority; for the purpose of transmitting account information, it does not associate the identifier of the natural person who issues with the electronic device account, with the person’s Social Security number and does not send the person’s Social Security number to FURS; does not ensure that the account number for which the account verification process is being carried out is compiled in the prescribed manner; does not accept the internal act or provides untrue, incorrect or incomplete information in the internal act; does not send information on invoices issued using VKR within the deadline; does not establish an electronic connection or does not establish the functioning of the electronic device within the deadline and does not send information on all invoices issued; does not send invoice information within the period after the causes of the delay have ceased; does not keep messages about subsequently assigned EOR issued invoices in the prescribed manner; does not prove the inability to establish an electronic connection for data exchange with a certificate from the Agency for Communications Networks and Services of the Republic of Slovenia; does not publish or publish in a place visible to the buyer notification about the obligation to issue an invoice and the obligation of the buyer to accept and retain the invoice);	not provide information or send untrue or incomplete information about business premises; issuing an invoice that does not contain all prescribed information, unless otherwise specified by ZDavPR; issuing a copy of the invoice without indicating that it is a copy; fails to submit or submit false, incorrect or incomplete information about the account prescribed for the purposes of performing the verification of accounts; does not issue an invoice within the prescribed period; do not issue an invoice using VKR; does not perform the confirmation procedure of the invoice for all subsequent changes of the data on the invoice or does not perform it within the prescribed period; enables the taxpayer to issue invoices and copies of invoices contrary to the provisions of this law; does not provide a printout of all issued copies of invoices and required data with the software;

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Source: FURS

[1] FURS has prepared detailed material regarding the definition of taxpayers for tax certification of invoices. The building is accessible at this link.

[2] Unique account identification code” – EOR – is a code that is created by software in the FURS information system based on a certain set of data and confirmed that the issued invoice was reported to the tax authority

[3] The invoice issuer’s security mark – ZOI – is the mark with which the issued invoice is linked to the taxpayer for the verification process of invoices and is information for determining the authenticity of the origin of the invoice; in text form and in code form (QR codes or PDF 417 codes or more Code 128 type barcodes).

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Silva Štampfl
Administrator Accountant