Touching on the most topical issue of the cash limitation, the limited amount of a transaction in monetary terms set out in Section 30(1) of the Taxes and Fees Act, there are still various misunderstandings and uncertainties as to which activities should be considered as one or several transactions, and whether the limitation applies to a single transaction or to the total amount of all transactions. I will therefore continue in this article with a focus on the issue of cash transactions in order to provide further clarity on this issue.
1. Are electronic payment recording devices required for cash receipt for loan drawdown or loan return transactions?
In accordance with Para 35 of the Cabinet of Ministers Regulation No 282 of 2 May 2007 „Procedure for the Use of Electronic Devices and Equipment for Registration of Taxes and Other Payments” (hereinafter - Cabinet of Ministers Regulation No 282 of 2 May 2007) cash dispensing operations (e.g. for containers or for customers using payment cards to withdraw cash) are recorded by the user in the cash register or cash system only if the user uses a cash register or cash system whose design ensures that cash dispensing operations are recorded and the amount dispensed is shown separately in the cash voucher, X and Z statements. A cash voucher shall be issued for the issue of cash.
However, it follows from Paragraph 2 of the Cabinet of Ministers Regulation No 282 of 2 May 2007, that taxpayers shall record payments received in cash for transactions using electronic devices and equipment for recording taxes and other payments - cash registers, cash systems, specialised devices and equipment.
In accordance with Article 1934 of the Civil Code a loan agreement means the transfer of a certain quantity of fungible goods, with the obligation to return what is received in the same quantity and in goods of the same class and benefit.
In addition, according to Article 1943 of the Civil Code the borrower must repay the same amount or the same quantity as he received.
According to the legal provisions of the Cabinet Regulation No 282 of 2 May 2007, the taxpayer is not required to record the amount of the loan received in cash in the cash register or in the cash system, as the amount of the loan money received is not payment for a transaction. However, the taxpayer shall record the issue of a cash loan to a natural person, sole trader or legal entity in the cash register or cash system only if it uses a cash register or cash system the design of which ensures the recording of cash issue operations.
2. What is the difference between the interpretation of the word “transaction” within the meaning of Article 30 of the Law “On Taxes and Fees” and Paragraph 2 of the Cabinet of Ministers Regulation No 282 of 2 May 2007 “Procedure for the Use of Electronic Devices and Equipment for Recording Taxes and Other Payments”?
In accordance with the explanation of terms given in Section 1 (11) of the Law “On Taxes and Fees” a transaction is an act to establish, modify, continue or terminate a legal relationship.
Cabinet Regulation No 282 of 2 May 2007 has been issued in accordance with Section 28.1 (5) of the Law On Taxes and Fees, which stipulates that The Cabinet of Ministers shall determine the users and procedures for the use of electronic devices and equipment, the types and requisites of documents evidencing transactions, thečthe obligations of users and servicers of electronic devices and equipment, as well as the procedure for registration of electronic devices and equipment, their users and servicers in the single database (register), and the procedure for their supervision and control.
Taking into account that Cabinet Regulation No 282 of 2 May 2007 is issued in accordance with the Law “On Taxes and Fees”, therefore, for the purposes of both the Law “On Taxes and Fees” and Cabinet Regulation No 282 of 2 May 2007, a transaction is an act to establish, amend, continue or terminate a legal relationship.
So forčthe supply of goods, services, loans or other acts to establish, modify, continue or terminate a legal relationship are transactions.
Thus, Section 30 of the Law on Taxes and Fees sets out restrictions on the use of cash for transactions carried out in cash.
Paragraph 2 of the Cabinet of Ministers' Regulation No 282 of 2 May 2007 establishes the obligation of taxpayers to record cash payments received for transactions in a cash register, cash system, specialised device and equipment.
More to come.
