In Germany, there is a legally regulated requirement to issue receipts. This is why businesses using an electronic checkout system at the point of sale (POS) must provide their customers with a receipt. Our article will explain which businesses are subject to this requirement and exactly what information a receipt must contain. You will also discover what businesses in Germany need to do in order to comply with the mandatory receipt law and what exceptions there are.

What's in this article?

• What is the receipt requirement and when did it come into force?
  
• Who is required to issue a checkout receipt?
  
• What exceptions are there to the receipt requirement?
  
• What do you have to do to meet the requirement?
  
• What information does a checkout receipt need to include?
  
• What is the difference between a checkout receipt, receipt document and other types of sales receipt?
  
• Does a digital checkout receipt meet the legal requirement?
  

What is the receipt requirement and when did it come into force?

The requirement to issue receipts means that businesses with an electronic checkout system must present a receipt to their customers when making a sale. This requirement came into force in Germany on 1 January 2020. It is part of the German Cash Security Ordinance (Kassensicherungsverordnung), which was passed in 2016. This extensive legal regulation is intended to stop any manipulation at checkouts and prevent tax evasion. The exact legal wording on the requirement to issue receipts can be found in Section 146a Paragraph 2 of the German Fiscal Code (AO).

Who is required to issue a checkout receipt?

In general, any businesses that use an electronic checkout system in Germany must provide their customers with a checkout receipt. Only businesses that use a manual checkout system are exempt from the requirement to issue receipts. A manual checkout is operated manually and does not store any data. It is also called a "cash drawer".

As part of the regulation on mandatory checkout receipts, electronic checkout systems in Germany must be equipped with a certified technical security device (TSE). This will help to prevent subsequent manipulation of the checkout data. Just like the requirement to issue receipts, the TSE forms part of the Cash Security Ordinance.

What are the penalties for non-compliance with the requirement to issue a receipt?

The business's tax office considers a checkout receipt to be proof that sales have been carried out properly. However, the German statutory Fiscal Code (AO) does not state any penalties for violations of the requirement to issue checkout receipts. Therefore, there are no immediate legal consequences if a business fails to comply with the requirement to issue checkout receipts. However, the tax office's auditors may carry out a checkout audit to determine whether a business is complying with the regulation. Every single business transaction that runs through an electronic checkout system is stored and can therefore be traced by the tax office.

If there are any discrepancies found in issuing receipts, this can result in severe fines and additional tax payments. The tax authorities consider this to be a violation of Germany's proper accounting principles. The amount of the additional payments is at the discretion of the relevant tax office.

What exceptions are there to the receipt requirement?

Small-scale entrepreneurs are exempt from the requirement to issue receipts. However, businesses that do not use an electronic checkout system and instead use a manual checkout are also exempt.

However, businesses that do use an electronic checkout system also have the option of being exempt from the requirement to issue receipts. In particular, retail businesses with walk-in customers can use the "unreasonableness clause". These types of businesses should submit an application to the relevant tax office for an exemption from the requirement to issue receipts. They must prove that it is unreasonable for them to issue receipts due to their product or service offering. An example of this could be if they mainly serve walk-in customers, such as in a bakery.

The tax office will then decide on a case-by-case basis if, according to the Fiscal Code, the requirement to issue receipts is unreasonable for the business. The regulation states the requirements for this as follows: "In cases involving the sale of goods to large numbers of unknown persons, revenue authorities may use due discretion and, on grounds of reasonableness and in accordance with section 148, waive the obligation to issue receipts in accordance with section 146(2) sentence 1 AO. This waiver may be revoked."

What do businesses that are exempt from the receipt requirement need to consider?

Businesses that have obtained an exemption from the requirement to issue receipts must be aware that the TSE requirement still applies to them. The business must continue to create its own receipts for accounting purposes, so that the tax office can trace all business transactions. The business is also required to issue a manual receipt instead of a printed receipt if requested by the customer. This also applies to businesses that do not use an electronic checkout system at the POS, but rather a manual checkout.

What do you have to do to meet the requirement?

Businesses in Germany must equip themselves with electronic checkouts that have a certified technical security device (TSE). This allows them to provide every customer with a receipt for goods or services purchased, as required by law. Furthermore, they must issue a receipt to their customer even if the customer does not request one or does not want to take it. The mandatory receipt law states that a business with an electronic checkout system is required to issue a receipt for every business transaction. These are the two most important requirements that German businesses must meet in order to comply with the requirement to issue a receipt.

To meet these requirements, businesses must ensure that there are no gaps in the receipts, so that no irregularities will be discovered during any potential audits by the tax office. Otherwise, the business would be in violation of the mandatory receipt law. Additionally, the receipt must contain specific information in order to comply fully with the requirements of the mandatory receipt law.

What information does a checkout receipt need to include?

A checkout receipt must contain information about the purchase of services or goods and payment for these. Firstly, it must show the type of goods or services purchased, the quantity and the purchase price. According to Section 6 of the German Cash Security Ordinance, a checkout receipt must contain further information. In brief, the required details are:

• Full name and address of the issuing business
  
• Type and quantity of the product or the service sold
  
• Exact time that the receipt was issued, including the date
  
• Total amount of all products or services, including the tax rate
  
• Verification value
  
• Consecutive transaction number that can be assigned uniquely to the completed transaction
  
• Serial number of the checkout system and security module
  
• Signature counter of the checkout or the security module
  

There is also the option for the checkout receipt to display a readable QR code containing all the information. However, a QR code is not mandatory, providing that the receipt can be read by anyone without the help of a machine.

What is the difference between a checkout receipt, receipt document and other types of sales receipt?

A checkout receipt is also a receipt document that serves as proof of a business transaction at the checkout. Checkout receipts are generated automatically by an electronic checkout system. For retail customers, for example, a printed checkout receipt is proof that they have bought and paid for the products. From the business's perspective, checkout receipts are also documented evidence for the tax office that sales have been carried out properly. For every sale, a receipt document – a checkout receipt – must be created and issued to the customer.

Therefore, checkout receipts are considered to be proof of purchase, even though they are not legally recognised as standard sales receipts. Unlike a checkout receipt, a standard sales receipt is issued manually and confirms, through the issuer's handwritten signature, that a payment or service has been received and that there are no further claims outstanding.

Does a digital checkout receipt meet the legal requirement?

According to Section 6 Sentence 3 of the Cash Security Ordinance, receipts can be created in either paper or digital format. In the catering industry in particular, the requirement to issue receipts is easier to meet by using digital receipts. As digitalisation advances, customers are also increasingly comfortable with the use of digital receipts.

Digital checkout receipts can also be sent directly to a customer's smartphone – for example, by email or via Bluetooth. Different technologies can be used to make receipts available digitally, such as emails, SMS, QR codes or near-field communication (NFC) technology.

To use emails and SMS, businesses must request data from their customers in the form of an email address or phone number. The customers will then receive a download link for the checkout receipt or a PDF copy. If the business uses NFC or QR codes, it will not need to request the customer's personal data. This makes things easier for both parties. Businesses only need a display at the checkout and the corresponding software. The customer simply scans the QR code displayed at the checkout using their smartphone. They then receive the receipt on their smartphone in PDF format. With NFC technology, the customer can receive the digital receipt on their smartphone via Apple Pay or Google Pay.

What are the advantages and disadvantages of digital receipts?

The advantages of digital receipts are clear. They offer a fully digitalised checkout process that saves paper and helps the environment. In addition, paperless receipts are quicker and easier to process, reducing administrative effort for businesses. Furthermore, digital receipts have a significantly longer shelf life. On the other hand, conventional thermal receipts, such as fuel and hospitality receipts, usually fade after just a few months and become barely legible.

The disadvantages of digital receipts are limited. The main obstacle to distributing digital receipts is the data-protection requirements that businesses must adhere to if they collect personal data from their customers in order to issue receipts.

Are you part of a business in Germany that is interested in learning more about similar topics? There's much more to explore in our collection of articles in the Payments section. For more support and advice, get in touch with Stripe.