Date:
This article was written by
Certified Tax Advisor, Manager, National Office Tax & Legal
Senior Consultant, National Office Tax & Legal
Certified Tax Advisor, Lawyer, Director, National Office Tax & Legal
On September 23, 2026, the German Federal Government adopted the government draft of an “Act to further develop cash register records and combat tax evasion and to further digitalize commercial and tax records.” In particular, the draft provides for a turnover-based requirement to use electronic record-keeping systems, the provision of electronic receipts, new criminal offences relating to manipulation software and further digitalization measures. Key application and transitional provisions have been amended compared with the original first draft bill.
Under Section 146b of the Draft German Fiscal Code (Abgabenordnung-Entwurf; AO-E), taxpayers deriving income from agriculture and forestry, a trade or business, or self-employment must use an electronic record-keeping system if their total turnover within the meaning of Section 19 (2) of the German VAT Act (Umsatzsteuergesetz; UStG) exceeds EUR 100,000 in a calendar year. However, taxpayers who accept cash payments but whose cash turnover is less than EUR 12,000 in a calendar year are now to be exempt from the cash register requirement.
The electronic record-keeping system must meet the requirements of Section 146a (1) AO; in particular, it must be protected by a certified technical security device and be capable of generating records in accordance with the digital interface of the tax administration for cash register systems (DSFinV-K). Cash transactions and payments by debit or credit card must be recorded; non-cash direct debits and transfers via an account held by the taxpayer are excluded.
Various technical solutions are permissible, including electronic cash registers, complex point-of-sale systems and cloud-based cash register solutions. Taxpayers subject to the requirement will no longer have the general option of recording cash receipts and cash payments exclusively by means of a so-called open cash drawer system (offene Ladenkasse).
The planned cash register requirement is to apply from January 1, 2028, if the turnover threshold was already exceeded in the 2027 calendar year or earlier.
If the turnover threshold is exceeded in the 2028 calendar year or later, the cash register requirement will generally begin on July 1 of the following year; the first draft bill had provided for April 1. The competent tax office must be notified that the threshold has been exceeded within one month after the cash register requirement begins.
The cash register requirement will end upon expiry of the second consecutive calendar year in which the conditions are not met. Compared with the first draft bill, the observation period is therefore shortened by one year.
In individual cases, the tax authorities may grant an exemption from the cash register requirement under Section 148 AO if compliance would constitute undue hardship. In addition, the German Federal Ministry of Finance (Bundesfinanzministerium; BMF), with the consent of the German Federal Council (Bundesrat), is to be authorized to regulate by statutory ordinance exceptions for certain groups or sectors and the related notification requirements.
From January 1, 2028, the existing requirement to issue paper receipts is to be replaced by a requirement to provide electronic receipts, under which an electronic receipt in a standardized data format must be made available to the party involved in direct temporal connection with transactions subject to record-keeping requirements (Section 146a (2) AO-E). Possible methods include QR codes, download links, Near Field Communication (NFC), e-mail or a customer account.
Customers will not be required to accept the electronic receipt. In addition, customers will continue to have the right to receive a paper receipt.
A transitional provision applies to electronic record-keeping systems with a weighing function that must also comply with metrology and calibration law: paper receipts may continue to be issued until December 31, 2032.
From January 1, 2028, a change of certified technical security device is to be reported electronically within one month (Section 146a (4) sentence 2 AO-E).
From January 1, 2029, rental cars and vehicles used for pooled on-demand transport that are not already equipped with a taximeter are to use an odometer with a digital interface for connection to a certified technical security device.
The provisions proposed in the first draft bill concerning a relocation penalty for irregularities connected with the relocation of electronic bookkeeping and a delay penalty for breaches of tax data access requirements are not being pursued in the government draft.
From January 1, 2028, taxpayers who fail to use a compliant record-keeping system despite being subject to the cash register requirement may be fined up to EUR 25,000 (Section 379 (1) sentence 1 no. 6a AO-E).
Section 374a AO-E is to punish the commercial distribution of manipulation software by imprisonment for up to five years or a fine, and its use by imprisonment for up to three years or a fine. Advertising is no longer expressly covered as a completed criminal offence in the government draft, but according to the explanatory memorandum it may constitute an attempt to distribute such software commercially.
Responsibility for unannounced cash register inspections (Kassen-Nachschau) is to be extended to the tax office in whose district the taxpayer conducts business. In addition, tax authorities will receive expanded independent investigative powers in cases involving the falsification of technical records; restrictions on the use of evidence and tax secrecy requirements are to be relaxed for certain serious non-tax offences.
In the future, annual financial statements and opening balance sheets may be retained exclusively in digital form, subject to certain conditions, in particular availability and readability. The government draft establishes this not only in Section 147 (2) AO-E, but also for commercial-law purposes through a corresponding amendment to Section 257 (3) of the Draft German Commercial Code (Handelsgesetzbuch-Entwurf; HGB-E).
The government draft marks the beginning of the legislative process. Businesses should review at an early stage the total-turnover and cash-turnover thresholds, existing cash register systems and interfaces, and processes for providing electronic receipts. They should also identify the transactions that would have to be recorded through an electronic record-keeping system in the future. Because not only cash payments but also payments by debit or credit card must be recorded through the electronic record-keeping system, the planned new rules will affect not only traditionally cash-intensive businesses but potentially also enterprises whose transactions are predominantly card-based.
As further amendments remain possible during the parliamentary process, the progress of the legislative process should be monitored. The legislator has so far responded only selectively in the government draft to the amendment proposals concerning the first draft bill submitted by numerous associations (e.g. the German Federal Chamber of Tax Advisers (BStBK) and the six leading associations of German industry, each dated August 13, 2026).