With effect from 1 July 2022, there is mandatory rounding of cash payments, when the price paid in cash is rounded to 5 euro cents; if the total remainder of the unrounded price paid in cash is less than half the value of 5 euro cents, it will be rounded down, and conversely, if the total remainder of the unrounded price paid in cash is equal to or greater than half the value of 5 euro cents, it will be rounded up.

Obligation to update the cash register e-kasa client for entrepreneurs

The purpose of this legislative amendment is primarily to limit the circulation of 1 and 2 cent coins in cash payments, while the explanatory memorandum shows that after the law enters into force, it will be one of the mandatory data on the e-kasa client's cash receipt, while this obligation also applies for merchants who do not have the obligation to register sales with the e-kasa client cash register. In the proposed amendment from the end of 2021, there was time for entrepreneurs to modify cash registers and other necessary software, and for this reason the amendment's effectiveness was postponed until July 1, 2022.

What benefits accrue to the seller and vice versa what benefits does the buyer have?

On the seller's side, such a legal arrangement should primarily achieve:

• cost reduction for fees related to the insertion and processing of 1 and 2 euro cent coins
• simplifying the issuance of coins for cash payments
• positive effect on the environment by reducing the use of packaging material
• by reducing the number of transports of these coins
• more efficient use of cash

On the buyer's side, a positive impact can also be observed, when the consumer, by adjusting his purchasing behavior, can achieve a downward rounding of prices, in the case of premeditated payment behavior:

• in the form of a combination of non-cash and cash payment, as only the amount paid in cash will be subject to rounding. So if the price of the goods is, say, 39.98 Euros, the consumer has several options for payment. If he would like to avoid rounding, he will first pay in cash, say 20 Euros, and pay the remaining amount of the payment without mandatory rounding. He would achieve a different effect if he initially made a non-cash payment of EUR 20 and had EUR 19.98 left for cash payment. In such a case, the remaining part of the payment for reimbursement would be subject to rounding.
• By purchasing several pieces of goods so that the purchase price is always rounded down

What are the basic conditions for mandatory rounding of payments?

• Applies to cash payments only
• Realization of payment after the entry into force of the law, i.e. from 1.7.2022, regardless of the fact that the order or advance invoice preceded the law's effect
• Acceptance of each partial payment is subject to rounding
• There is no legal requirement to issue a correction invoice due to rounding

What is the procedure from an accounting point of view and from a tax point of view?

• Accounting aspect and income tax aspect

Differences arising due to rounding when paying in cash are charged:

- in the double-entry bookkeeping system, according to the nature, to costs debited to account 548 – Other costs of economic activity or to revenues to account 648 – Other revenues from economic activity,

- in the system of simple accounting, according to its nature, as expenditure spent on achieving, securing and maintaining income in the breakdown of other expenses or as income included in the income tax base in the breakdown of other income,

• VAT aspect

Rounding off the resulting amount when paying in cash does not affect the value added tax calculation itself

• Income tax aspect

Differences arising due to rounding when paying in cash are charged to costs (expenses) or revenues (income), which are included in the tax base in accordance with accounting, i.e. tax-deductible expense and, on the other hand, taxable income.