About the procedure

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Fiscalization in Croatia

The Fiscalization Law was proposed in order to avoid tax evasion for subjects who charge cash for their receipts, such as retail locations, restaurants, and bars. Yearly tax statements have shown that the declared turnovers of a significant number of such subjects are very low, which points at a large number of cases of receipt non-issuance, or their manipulation in practice. In order to prevent it in a more efficient manner, the proposed Law has prescribed the process of fiscalization – a set of measures used to implement an overview of the issuance of cash transaction receipts.

According to the experience in countries with fiscal laws – Bosnia and Herzegovina, Republika Srpska, Serbia and Albania – outdated concepts are used, which can only support the businesses of small convenience or grocery stores, which have one or two cash registers. They do not have a quality solution for large commercial chains and complex sales systems.

Advanced merchandise payment, promotional actions (e.g. buy one, get one free), bulk merchandise sales, coupon payment, award coupons, vouchers, tax-free purchasing (diplomatic and consular personnel), limited number of characters for quantity and price, etc. are all issues for fiscal solutions with printers. Fiscalization is meant to reduce tax evasion, but it can also create huge expenses for merchants because of its limitations, when the solution is hardware-based.

A software solution is a good choice for fiscalization, because it will not create a financial burden for companies which is too high, nor will it create a cash outflow from Croatia, which would occur in the case of a hardware approach (printer), which would result in equipment imports from other countries.

The fiscalization process starts by acquiring a digital certificate from FINA, which will be used for electronic signing of receipt elements and the certificate will be used to identify the subject to fiscalization during electronic data exchange.

Each receipt element will be sent to the Ministry of Finance and the Tax Administration. In practice, this means that receipts will have to be issued using POS devices and an Internet connection, which means the sales points will have to be connected to the Internet, while the receipt software will have to be adjusted to this. The basic work principle is simple – the fiscal software logs every receipt and in order for it to be printed and delivered to the customer, it must be certified by the Tax Administration with an Unique Receipt ID (JIR).

A problem for fiscalization could be the speed of receipt issuing, considering that a large number of receipt files will have to be sent at the same time over the Internet, in order to receive the JIR, which has to be printed on the receipt. According to some opinions, the expected two-second delay, which was estimated according to a statistic that says over 10 million cash receipts (276 receipts per second) are issued daily, is not a realistic expectation. It was assumed in the calculation that the frequency could increase by a factor of 5 in the afternoon. New Year holidays and Easter are also days when the number of receipts is hard to estimate.

The Law asks for an uninterrupted sequence of receipts (i.e. receipt numbers from 1 to n, in case of n issued receipts). This could pose a problem, considering that different sales points of the same company cannot have double receipts, and things are additionally complicated by the passage from online to offline receipt management in situations when there is no electricity or Internet available.

Despite the fact that certification and sw equppping jobs for the Ministry are reserved for FINA and APIS-IT, other IT companies will also benefit from fiscalization. Cash register software companies will be able to make an income from upgrading existing software solutions, while hardware companies will have their opportunity in connecting cash registers to the Internet. ISPs will also profit from fiscalization. The deadline for software companies is extremely short. The biggest problem is, that there is still no technical documentation, nor the basics such as the XML format which will be used for data delivery to the Tax Administration.
The cash register fiscalization process will start by downloading demo certificates in September and the general technical instructions on October 1st. The test environment will be available from December 1st, and production from the date of the enactment of the Law, January 1st, 2013.