In 2025, this article was the Topic of the Week in the newsletter of week 41.

Cash Register Law Under Review

According to the coalition agreement, the so-called Cash Register Law with its diverse obligations, like Technical Security Devices (TSD), receipt issuance obligation, and cash register registration, will be evaluated. This is appropriate as the introduction of the Cash Register Law in 2016 has led to significant costs and bureaucratic workload for businesses – according to the results of a current nationwide survey by the IHK organization. From the companies' perspective, the announced review should also answer the question about the fundamental effectiveness of the law: Are the measures truly suitable to prevent tax fraud, and are they proportionate?

Survey Reveals High Bureaucratic Burden

The goal of the IHK survey was to learn more about the practical issues and burdens and to gain insights for effective fraud prevention while simultaneously reducing the burdens on businesses. It became clear: Instead of imposing extensive obligations on all companies that cause high bureaucratic burdens, the financial administration should target enforcement in risk-prone cases.

Regulations Heavily Burden Many Companies

The tightened regulations for cash register management significantly burden businesses: Expensive upgrades to cash register systems, piles of often unwanted issued receipts, and unannounced inspections complicate everyday operations. The goal of these measures is to prevent cash register fraud, yet the effectiveness is as uncertain as the proportionality of costs and benefits.

For example, the costs of upgrading existing cash register systems with TSD, initially estimated by lawmakers to cost €39, proved to be significantly underestimated: About half of the companies able to retrofit their cash registers had to invest up to €1,000. For 55% of businesses, this was technically impossible – they had to purchase new cash register systems even though their old ones were still operational.

Moreover, the receipt obligation causes significant costs – abstracting from the resources required – because receipts must be printed although most buyers receiving small amounts usually do not want a printed receipt. Only a third of customers actually take the receipt. Half of the companies report that over 80% of receipts are directly thrown away. Companies incur average annual costs of about €300 due to the receipt issuance obligation.

Additionally, 20% of businesses complain about technical difficulties with the electronic registration of cash register systems required since January 1, 2025. Unannounced "cash register inspections" by financial officials to check the compliance of cash register entries and transactions caused significant operational disruptions in more than a third of cases.

Economy Demands Practical Solutions

This requires precise and efficient measures targeting areas where non-compliance is more probable. In contrast, unfocused regulations causing significant collateral damage should be abolished. Specific recommendations from the economic community:

• Differentiate TSD Obligation: It should not apply generally to all businesses but only in risk-prone scenarios.
• Flexibilize Receipt Obligation: The planned abolition of the receipt issuance obligation as per the coalition agreement should be implemented comprehensively and quickly. Receipts should only be issued upon customer request. Financial administration staff can continue to perform inspections anonymously through test purchases and during cash register audits to verify if transactions are recorded in the cash register system.
• Improve Reporting Procedures: The electronic reporting system has been operational only since January 1, 2025. Emerging legal questions should be resolved promptly, ensuring smooth data transmission.
• No Obligation for Electronic Cash Systems: Smaller businesses should retain the option to operate manual cash registers without technical devices, "open cash register", as there's no evidence suggesting this is inherently more prone to fraud. For these cases with lower revenues, plausibility checks of the tax returns submitted by companies and random financial authority audits should suffice to prevent potential misconduct.
• Modernize Inspection Methods: Instead of costly individual inspections, system-focused reviews, i.e., concentrating on internal processes and compliance measures, should be conducted to reduce the time and human resource burden on financial authorities. Inspections should also occur promptly, ideally immediately after the tax year ends. This would quickly provide companies the much-needed legal and planning certainty. Financial authorities already have extensive control capabilities under external audits. With advancing digitalization, critical areas should be more precisely identified. This would achieve financial authorities’ goals while significantly reducing companies’ burdens.