Fines for improper use of registrars of settlement operations in 2024 and how to avoid them

As of October 1, 2023, the state has resumed tax audits to ensure compliance with the rules governing the use of registrars of settlement operations (RROs). What fines may an entrepreneur face for violating cash discipline? What regulations should be adhered to in order to circumvent these issues? We will address this in greater detail in the article.

The tax authorities issue fines only after an audit has been conducted. In regard to the use of RROs, the tax authorities conduct both documentary and factual inspections. Consequently, the primary objective for any entrepreneur is to avoid such occurrences.

To achieve this, it is crucial to avoid the common mistakes that the tax authorities frequently flag. We will now discuss the most significant ones.

No RRO at the point of sale

💸 The fine for the first violation is 100% of the amount of goods sold. For the second violation, the fine is 150%.

The Law of Ukraine “On the Use of Registrars of Settlement Operations in Trade, Public Catering and Services” (hereinafter referred to as the “Law on RROs”) stipulates which categories of entrepreneurs are required to utilize fiscal cash registers.

In accordance with the Law on RRO, the following entities and individuals may not utilize registrars of settlement operations:

• Individual entrepreneurs in the first group;
• Entrepreneurs who receive payments to IBAN details;
• Entrepreneurs who accept COD payments using Ukrposhta services (if you use Nova Poshta services, you need a RRO);
• Professionals who accept payment for services only remotely;
• Single taxpayers whose businesses are registered in villages. However, such entrepreneurs are required to maintain a record of all payment transactions, as well as a settlement book (in fact, they must also issue receipts). They frequently utilize PRROs to streamline the fiscalization process.

Therefore, in accordance with legal requirements, an entrepreneur must register a cash register prior to selling goods or providing services. It is not possible to retrospectively fiscalize sales. Accordingly, any delays in registering a RRO may result in the imposition of a fine.

An entrepreneur does not issue a fiscal receipt to a buyer

💸 The fine for the first violation is 100% of the amount of the goods sold, and 150% for repeated violations

It is the responsibility of the seller to issue a receipt following each transaction, regardless of whether the buyer requests one. In the event that the seller is an online merchant and sends the purchased goods to the buyer after receiving payment, the seller is required to include a fiscal receipt with the parcel.

Entrepreneurs who sell goods by cash on delivery through Nova Poshta are advised to use a software RRO for the most convenient fiscalization. The seller transmits electronic receipts via instant messaging platforms, email, or other convenient channels.

An entrepreneur issues a receipt for a cash payment exceeding UAH 50,000 for individuals or UAH 10,000 for legal entities

💸 The fine amount is 1,700 UAH

The Regulation on Cash Transactions in the National Currency in Ukraine No. 148 (the “Regulation No. 148”) restricts cash payments. A seller is fined if it issues a check for cash payments of more than UAH 50,000 to individuals and more than UAH 10,000 to legal entities.

In such instances, the buyer may opt to make the payment in a combination of cash and electronic means of payment. In this instance, the maximum amount of cash that can be paid is UAH 50,000.

The details in the receipt are incorrect

💸 The fine is calculated at 100% of the value of goods sold in the case of a first violation, and 150% in the case of a repeated violation.

💸 In the event that a barcode is not present on a receipt for excisable goods, an additional fee of UAH 5100 will be applied.

One of the most common causes of tax audits and fines is the submission of incomplete or inaccurate information on a receipt. The specific details are outlined in the Regulation on the Form and Content of Settlement Documents (hereinafter, Regulation No. 13).

In the event that an entrepreneur sells excisable goods, the receipt must also include a barcode and the UKT ZED code.

The Tax Service considers receipts with incorrect details to be unissued receipts. Accordingly, the fine for incorrect details is the same as that for failure to use the RRO.

Modern RRO providers ensure compliance with the latest legislative changes. Fiscal receipts are automatically generated with all the necessary details.

No POS terminal is available at the point of sale

💸 A first violation carries a fine of 100 to 200 tax-free minimums (from UAH 1700 to 3400); a repeated violation is subject to a fine of 500 to 1000 tax-free minimums (from UAH 8500 to 17000).

In accordance with Cabinet of Ministers Resolution No. 894, all entrepreneurs selling goods in localities with a population of 5,000 or more are required to use POS terminals. Failure to comply with this requirement will result in administrative liability in accordance with Article 163-15 of the Code of Administrative Offenses.

The POS terminal does not issue fiscal receipts; it only generates payment terminal receipts. Accordingly, it must be used in conjunction with a RRO or PRRO. The number of POS terminals must be at least 50% of the number of RROs.

The seller incorrectly opens or closes a shift

💸 The applicable fine is 510 UAH

It is inadvisable for a seller to open a shift at RRO if there are no sales. A zero z-report (a report for all sales during the shift) may draw the attention of the tax authorities, potentially resulting in an audit.

Pursuant to the rules of cash discipline, the seller is required to close shifts in a timely manner, no later than 24 hours after opening. In the event that a tax audit uncovers such a violation, both the entrepreneur and the cashier will be subject to a fine.

Modern providers offer PRROs with automatic shift closing functionality. For instance, in Vchasno.Kasa, the program attempts to complete the shift within a specified time frame. Additionally, the seller will receive an email notification.

The validity of RRO is expired

💸 A fine of 100% of the value of the goods sold will be levied for the first violation, and 150% for the second

The manufacturer determines the validity period of a cash register. It provides the assurance that the fiscal cash register will function properly and retain data related to transactions for a designated duration.

The tax authorities view working with an expired RRO as tantamount to its absence at the point of sale. In the event of a violation being identified, the seller will be subject to the same fine as would be applied in the absence of a RRO. Furthermore, an administrative fine is imposed:

• A cashier who issued receipts using an expired RRO is liable to a fine of between UAH 34 and 85 for the first violation, and between UAH 85 and 170 for subsequent violations.
• An entrepreneur is subject to a fine of between UAH 85 and 170 for the first violation, and between UAH 170 and 340 for subsequent violations.

Software RROs are updated automatically. When working with them, entrepreneurs are not at risk of incurring a fine for an overdue fiscal cash register.

The seller has failed to comply with the rules for depositing/receiving cash

💸 For the first violation, the fine will be UAH 1. For the second violation, the fine will be 100% of the value of the goods sold in violation

It is crucial to correctly execute transactions unrelated to settlements when working with RROs/PRROs. In particular:

• Service deposit: The registration of the cash held in the cash register at the time of the first settlement transaction following the issuance of the z-report.
• Service withdrawal: The registration of the cash withdrawn from the cash register by the cashier.

Rules governing the conduct of such transactions are set forth in the Procedure for Registration of Settlement Transactions, No. 547.

Errors in the deposit and withdrawal of cash result in a discrepancy between the amount of cash available in the cash register and in the z-report. The tax authorities may impose a fine if they detect such a violation during a calendar year and the discrepancy between the amounts exceeds 10% of the minimum wage.

To protect your business from risks, choose the right RRO/PRRO provider. Modern providers regularly update their software and automate cash register processes, including recording shift duration, tracking cash in the cash register, and generating z-reports. The use of such fiscal cash registers minimizes the risks associated with the human factor.