If a pharmacist voluntarily maintains a file generated by their PC cash register containing individual records of cash sales, beyond the legally permissible method of determining daily revenues through daily summary receipts, they are generally not obliged to present this file to the tax office during a tax audit.
This was decided by the Hessian Fiscal Court (Ref.: 4 K 422/12).
A pharmacist had filed a complaint, who recorded the cash receipts of her pharmacy using a so-called PC cash register. She determined the daily cash receipts through continuous daily summary receipts (Z-Bons) followed by resetting the cash register memory. The total of daily cash receipts was manually transferred to the cash book, which formed the basis of the accounting. She did not comply with the tax auditor's request to also submit the electronic file containing individual records of cash sales. Although she provided the tax auditor with a CD containing data from her cash register system, she had removed the file with the individual sales documentation.
The Hessian Fiscal Court ruled that there was no legal basis for the tax office's request to also submit the file containing individual records of cash sales. This is because, for the plaintiff, who supplied goods not to other commercial enterprises but to end consumers, there was no obligation, based on the volume and frequency of individual sales, under the Commercial Code, the Tax Code, or professional regulations, to record individual cash sales manually or on a data carrier. The plaintiff could also rely on the jurisprudence of the Federal Fiscal Court, according to which, for reasons of reasonableness and practicality, it is not necessary to maintain individual records for proper accounting, even in the computer age, if the entrepreneur – like the plaintiff pharmacist – sells low-value goods for cash to an indefinite number of customers in an open retail store. In such cases, it is sufficient to forgo individual records and to transfer the determined daily summary totals continuously into a cash book. The maintenance of the cash book is specifically intended to replace the disputed individual records.
The fact that the plaintiff nevertheless additionally and voluntarily recorded and stored individual cash sales in a separate, program-controlled file does not alter this and does not lead to an obligation to present it during a tax audit. This is because the file is generally not part of the primary records to be retained under § 147 of the Tax Code. The fact that the file might be helpful and interesting for the tax office when verifying mandatory records is irrelevant. For the pharmacist's business, the separate recording of goods issued and revenues is precisely not required. However, the legislator is free to create a legal right of access, following the Austrian model, even for data created by the taxpayer outside of a statutory recording obligation.
The Hessian Fiscal Court also conclusively and quite practically clarified that the disputed question of the existence of a presentation obligation under § 147 AO must be strictly distinguished from the question of otherwise discernible irregularities in accounting and the resulting estimation authority of the tax office under § 162 AO. For instance, improper cash register records (e.g., discrepancies between daily totals according to Z-Bons and entries in the cash book, or untimely maintenance of the cash book) would lead to the conclusion that not all cash receipts have been recorded and would entitle the tax office to make additional assessments.
Source: Press release of the Hessian Fiscal Court
Goldberg Attorneys at Law 2013
Attorney Michael Ullrich, LL.M. (Information Law)
Specialist Attorney for Information Technology Law
Email: info@goldberg.de
