With effect from 1 January 2017 all cash register systems have been required to comply with the Norwegian Cash Register Systems Act and associated Cash Register Systems Regulations. All those with a duty to keep accounting records must have a cash register system that complies with the new requirements no later than 1 January 2019. This means that if your business has cash sales, you must familiarise yourself with the new rules.
What is the purpose of the new regulations?
According to the Norwegian Ministry of Finance, the new rules are intended to reduce the extent of the black economy in cash-based business sectors. Up to now, cash register systems have been subjected to few requirements with respect to functionality and design. Following a series of inspections, the Norwegian Tax Administration has discovered that cash register systems have been set up in a way that makes it possible to conceal cash transactions. The new regulations will make it more difficult to manipulate cash register systems in order to withhold cash sales from taxation and the payment of VAT.
The new regulations impose a liability on cash register system producers and suppliers irrespective of the country of origin of the producer/supplier. They will also provide better and more effective opportunities for control and inspection. The new regulations apply to suppliers who sell, rent or lend out cash register systems.
The key aspects of the new regulations may be summarised as follows:
- All those with a duty to keep accounting records and record cash sales by means of a cash register, payment terminal or other equivalent system must have a system that meets the requirements of the Norwegian Cash Register Systems Act and Cash Register Systems Regulations.
- If new systems are purchased after 1 January 2017, these must meet the requirements.
- Old systems must be updated such that they meet the requirements no later than 1 January 2019.
- Suppliers of cash register systems must submit a product declaration to the Norwegian Tax Administration confirming that the cash register system meets the requirements of the Norwegian Cash Register Systems Act and Cash Register Systems Regulations.
- The cash register system must have a user manual that describes how it is built up and what functions it has.
- The Norwegian Cash Register Systems Regulations set out which functions a cash register system must have.
- The Norwegian Cash Register Systems Regulations also sets out which functions a cash register system must not have.
- All day-to-day use must be recorded consecutively in an electronic transaction log. This electronic transaction log must be secured such that it cannot be altered or deleted.
- The cash register system must be able to produce X-reports, Z-reports, sales receipts and return receipts for each individual cash register.
- If the supplier withdraws the cash register system from the market by order of the Norwegian Tax Administration, the supplier must, without undue delay, notify its customers of this fact.
If a cash register supplier has not submitted a product declaration or has a cash register system that does not meet the statutory requirements, the Norwegian Tax Administration may impose a penalty charge on that supplier. The penalty corresponds to 30 standard court fees, and in the event of further faults with respect to the same cash register system within a period of 12 months from the imposition of the first penalty, a charge corresponding to 60 standard court fees will be imposed.
Those with a duty to keep accounting records who fail to record and document cash sales by means of a cash register system with a product declaration, and who therefore breach the Norwegian Bookkeeping Regulations, may be required to pay a coercive charge and/or be prosecuted for offences against ss 392 to 394 of the Norwegian Penal Code. It is therefore important that all those with a duty to keep accounting records familiarise themselves with the new rules and make sure they have a cash register system that meets the new requirements by 1 January 2019.
The following are not required to have a cash register system:
- Those with a duty to keep accounting records who engage in itinerant or occasional cash sales that do not exceed 3G ex VAT in the course of a single financial year. (In Norway “G” stands for “grunnbeløpet”, the National Insurance Scheme’s basic unit of calculation, which is adjusted annually.)
- Those with a duty to keep accounting records whose cash sales do not exceed NOK 50,000 ex VAT in the course of a single financial year.
- Sales from vending machines.
- Does NOT apply to sales of fuel, parking or ticket machines.
- Sales from unstaffed sales outlets other than vending machines.
Regulations applicable to specific business sectors
- For those engaged in the taxi sector, the previous rules requiring them to record sales by means of a taximeter and shift summaries still apply.
- Restaurants and other places where food and/or beverages are served must record the sale of food and beverages consecutively in the cash register system. This applies even if payment takes place when the guest leaves the establishment. Admission and cloakroom fees must be recorded in the cash register system.
- Income that charitable and socially beneficial institutions and organisations derive from the sale of goods from kiosks and the provision of food and beverages are exempt from VAT when such sales take place in connection with events and unpaid labour is used. Since this income is not VAT liable, there is no requirement to use a cash register system.
Changes in the regulations relating to the use of cash invoices – proposal sent for public consultation
Under the new regulations, cash sales are not required to be recorded in a cash register system if the entity with a duty to keep accounting records issues a cash invoice (with effect from 2019). In a consultative memorandum dated 12 April 2018, major changes to these regulations have been proposed. The memorandum proposes that only those entities with a duty to keep accounting records which provide health-related services (doctors, dentists, physiotherapists, etc) shall be exempted from the use of a cash register system if they issue a sales document that meets the requirements for a sales document in the Norwegian Bookkeeping Regulations.
We will come back with more information about this issue as soon as it has been clarified.
Please don’t hesitate to contact us at BDO if you would like more information about the new rules.
The Norwegian Tax Administration has created a separate page on the new cash register system requirements, including a Q&A section covering the most commonly asked questions.