As a lot of tax authorities worldwide are slowly importing and adjusting fiscal e-invoicing and tax collecting systems somewhat successfully, there were some questions at hand that caused quite a confusion.
One such matter is tipping – to many taxpayers who own their own businesses (cafes and restaurants in this case) this part can be tricky and often cause misinterpretation. Luckily, some tax authorities made a decision to leave this freedom to the businesses.
Countries, such as Slovenia, deem that tips don’t need to be taxed, and as such, don’t require being part of fiscal receipts. Therefore, a waiter using the POS doesn’t have to register their tip at all.
In other countries, however, tipping seems to be a bit more complex, yet, the rules are simple and straight forward. In the example of the Czech Republic, we can see that handling tips has been described in three different scenarios.
Handling Tipping
Taxpayers in the Czech Republic handle tips depending on their business policies. Some facilities claim that tips are not business income, and as such, they should not be recorded on a receipt. Some other businesses, however, claim tips, and as a result, they must be recorded. Here are three examples of tipping according to the rules of the Czech Republic Tax Authority.
- In case a business claims that tips belong to the employees and are not the business’ official income, the data on the receipt should look like this:
- Total amount of sales 182.00
- Total tax base with the first reduced VAT rate 158.27
- Total VAT with the first reduced rate 23.73
Let’s assume that the customer ordered food and drinks for the total price of 182 CZK. Once the first reduced VAT rate of 15% is applied, the price is 158.27 CZK. However, in this scenario, the customer decided to pay 200 CZK to the waiter, which means that 18 CZK was a tip, and as such, is not shown on the receipt data.
- In case that tips are a part of the business income, somewhat different rules will apply. The tip still doesn’t enter the VAT base as it is voluntary, not agreed upon, and has no impact on the final product (in this case, dinner and drinks). Although, the tip will be included on the receipt itself, meaning that all the 200 CZK will be shown.
- Total amount of sales 200.00
- Total tax base with the first reduced VAT rate 158.27
- Total VAT with the first reduced rate 23.73
- In case the tip is retained by the owner instead of the staff or the business, the same rules as in scenario 2 apply. The only difference is that the staff learns that the guest wishes to leave a tip only after printing the receipt. In these conditions, the same receipt as in example 1 has already been printed, so now the tip is registered separately with a different, single message:
- Total amount of sales 18.00
Obviously, in none of the three scenarios is the tip taxed – the only requirement is for it to be recorded clearly on the receipt in case a business claims it.
In the case of Taxcore, all three of the scenarios are also very much adaptable. As a platform, TaxCore allows a lot of freedom (within the legal borders) to the taxpayers. In countries where TaxCore exists and is being used, tipping can work nearly the same; it can be recorded on the receipt without being taxable.
So, no matter the laws and the rules of the tax authority in question, TaxCore can adapt and fulfil all the potential needs.