What should I do if I registered a cash register in advance?

There are situations when a sole proprietor or a legal entity buys and registers a cash register in advance, even before they start operating. For example, a sole proprietor has registered and immediately bought and registered a cash register, but has not yet started selling goods because he has not found a storefront, or a sole proprietor has registered a cash register in advance in preparation for mass fiscalization, but the deadline for mandatory use of cash registers has been postponed. What should I do with the cash register in such cases, do I need to open and close shifts and make a Z-report at the end of the day? Do I need to depreciate the cash register? Do I need to file Form 20-OPP?

Do I need to make a Z-report at the end of the day?

Article 3, clause 9 of the ECR Law states that business entities (hereinafter referred to as "business entities") that carry out settlement transactions must create Z-reports on a daily basis. This means that if you did not have any settlement transactions during the day, you do not need to create a Z-report.

For example, a salesperson opened a shift, made a service deposit or service issue, and there were no payments or refunds to the buyer during the day. In their consultations, the tax authorities say that in this case, there is no need to create a Z-report, it is enough to close the shift at the end of the day.

If a business entity knows in advance that it will not have any settlement transactions on a certain day, for example, a sole proprietor or a legal entity has not yet started its business, then it does not need to open and close the shift. That is, on these days, the cash register does not even need to be turned on.

What should those sole proprietors who purchased a cash register at the end of 2020 in preparation for mass fiscalization do, but have not yet been obliged to use a cash register? Do such entrepreneurs need to conduct payment transactions through cash registers in 2021? It all depends on whether the cash register has been transferred to the fiscal regime.

If a sole proprietor has purchased a cash register and has not registered it with the tax authorities, i.e., has not transferred it to the fiscal mode of operation, then the cash register may not be used and no payment transactions may be made through it. If an entrepreneur has purchased a cash register, submitted Application No. 1-ECR to the tax office, had the service center seal and put the cash register into operation, and reported this to the tax office, then the cash register must be used and payment transactions must be made through it. In this case, it is considered that the cash register has been put into operation, and the individual entrepreneur voluntarily uses it.

If the cash register has been put into operation, it means that you need to open and close shifts, and make a Z-report at the end of the day (if there were settlement transactions).

If a sole proprietor has not yet been obliged to use a cash register, and the entrepreneur has purchased and put into operation a cash register in advance, but does not want to use it, then you can deregister the cash register with the tax authorities. Once the obligation to use a cash register arises, it can be re-registered with the tax authorities.

Do I need to submit Form 20-OPP?

Form No. 20-OPP must be submitted to the tax office before registering a cash register. Previously, this form indicated the cash registers used by the entrepreneur, their availability, quantity and condition. Now, without prior submission of Form No. 20-OPP, the registration of a cash register will be denied, since this form now shows information not about the cash register, but about the business entity that will use the cash register.

Both individual entrepreneurs and legal entities need to submit Form 20-OPP before registering a cash register.

Is it possible to depreciate cash registers?

If the cash register is used by a legal entity, whether or not to depreciate it will depend on what is written in the accounting policy of the business entity. If the cost of the cash register exceeds the threshold set forth in the company's accounting policy, then the cash register is classified as fixed assets, if not, it is classified as low-value non-current tangible assets.

Depreciation is accrued from the month of putting the cash register into operation, since from that moment the cash register becomes usable.

For tax accounting purposes, a cash register is not classified as fixed assets, as its value does not exceed UAH 20 thousand. If the cost of a cash register exceeds UAH 20 thousand, then the cash register will be classified as fixed assets.

When calculating depreciation, the minimum allowable depreciation period should be taken into account. For cash registers, this will be 2 years.

Individual entrepreneurs on the general taxation system may depreciate cash registers and include the amount of depreciation in business expenses if the cost of the cash register exceeds UAH 20 thousand.

Therefore, sole proprietors on the general system may include the cost of purchasing a cash register in their ordinary expenses, without depreciation. The cost of the cash register is included in the expenses of the period when the cash register was put into operation.