Get Ready for the New Digital Sales Registration Mandate
Starting from January 1, 2024, many retail and service businesses are required to use digital cash registers. The implementation period is already underway. What this means for your business and how you can get up to speed on payment digitalization at a low cost you can read in this article.
This change will affect more than 10,000 Danish companies, requiring them to adopt the incoming digital sales registration requirements. Starting from the first day of 2024, businesses that generate an annual turnover of less than 10 million DKK will be compelled to use digital cash registers. However, businesses with irregular sales records may be asked to switch to digital sales registration systems even before the deadline.
The Rationale Behind the New Mandate
This change has its roots in the Tax Administration's concern over a trend among certain businesses that deliberately underreport their income to evade tax and VAT. This practice is especially prevalent among retail and service providers using cash transactions. Compounding this issue is the poor quality of bookkeeping and invoicing, which further complicates the authorities' attempts to conduct thorough inspections.
Here a few highligts from Skat.dk:
The background is a political agreement on "Strengthened efforts against undeclared work" from September 20, 2017. Skat.dk The Tax Administration has decided to use the OECD standard SAF-T (Standard Audit File - Tax) as the standard file format for the reporting of sales registration data to the Tax Administration. Skat.dkA guide in the SAF-T format has been prepared for use in the development of digital sales registration solutions for the Danish market by suppliers. Skat.dk
Understanding Digital Sales Registration Systems
Often equated with a cash register, a sales registration system is essentially a digital POS (point-of-sale) system. A typical system includes a screen (like an iPad or a monitor), functioning as a digital cash register, linked to a cash drawer, receipt printer, and a payment terminal to process card or mobile payments. The system is designed to automatically store and export sales data, which can be shared digitally with authorities during inspections.
Businesses in the following sectors are expected to transition to digital cash registers:
Restaurants and eateries, including pizzerias, grill bars, and ice cream barsCafes, pubs, and nightclubs, grocery stores and convenience stores. Since July 1, 2021, the Danish Tax Agency has intensified its inspection of retail businesses in these sectors. Violations have generally involved inadequate daily cash reconciliation or evident discrepancies pointing to incomplete or non-existent sales registration.
The Tax Agency has clarified that businesses resorting to black-market practices, such as underreporting their income to evade VAT, will be required to use a digital sales registration system compatible with the SAF-T format (Standard Audit File for Tax). These businesses should also be prepared for more thorough and frequent inspections by the Tax Agency.
Navigating Tax Rules for Digital Sales Registration
Maintaining a record of all transactions digitally can simplify tax compliance. Keeping track of income and expenditure becomes straightforward, and it's easier to retrieve transactions when necessary. The latest financial systems integrated with digital sales registration meet the Tax Agency's new requirements. When investing in digital sales registration, it is crucial to ensure that the system fulfils the Tax Agency's requirements.
With Flatpay's digital payment service and POS solution, your business can comply with these new regulations seamlessly while reaping the benefits of digitalization. Embrace the era of digital
Testimonial from a FlatPAY POS-customer
"As a small business owner, having a reliable and straightforward POS system is crucial for me. A friend introduced me to Flatpay, and it has been a game-changer. The system's simplicity of use is exceptional, and the customer service is superb. Importantly, Flatpay's compliance with the new digital sales registration requirements has eased the transition process significantly. It has ensured that my business meets the Danish Tax Agency's regulations, giving me peace of mind. I wholeheartedly recommend Flatpay to all small business owners navigating this new mandate!"
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