A small children's clothing company decided to sell only online: a warehouse, a website and a courier service, with no shop. Before starting, they asked us why they would need a fiscal cash register when nobody ever walks in.
The answer depended on how their customers would pay. The website offered three options: payment to the bank account, card payment on the website, and cash on delivery.
The law does not require a shop
Under Article 2 of the Law on the Registration of Cash Payments, every taxpayer making supplies "for which payment is not made through a bank" must introduce a fiscal system. The law makes no distinction between a shop and a website. The exemptions are listed in Article 9, and online sales are not among them. The Government may exempt certain activities by a separate decision (Article 9-a), but we found no such decision for online sales.
VAT registration does not matter here, because according to the Public Revenue Office (UJP) brochure the obligation also applies to taxpayers not registered for VAT.
Each of the three payment options gives a different answer:
| Payment option | Fiscal receipt | Basis |
|---|---|---|
| Payment to the bank account (payment order, e-banking) | No | Art. 2 |
| Cash on delivery | Yes | Arts. 2 and 4 |
| Card on the website | Not regulated directly | Arts. 2 and 5 |
Payment to the bank account. The payment goes through a bank and no fiscal receipt is issued. The UJP brochure on services says there is no obligation if payment is made exclusively without cash, and Article 2 applies equally to supplies of goods.
Cash on delivery. The customer pays in cash, so this is not payment through a bank, regardless of the courier later paying the money into the seller's account. The fiscal receipt is issued at the handover of the goods and payment (Article 4(2)). When trade goes through intermediaries or distributors, the taxpayer issues the fiscal receipt to the distributor, who hands it to the customer at payment (Article 4(4)). Couriers are not mentioned specifically, but this is the closest provision, so the fiscal receipt is prepared together with the parcel.
Card on the website. The law has no direct provision for this case. Article 5 requires the fiscal receipt to state whether payment was made in cash or by payment card, and the UJP consumer brochure says a fiscal receipt is issued for card payments too. That clearly applies to a card on a POS terminal in a shop, but for a card payment on a website, where the money reaches the account through the bank, we found neither a provision nor a published UJP opinion. We recommend asking UJP for a written opinion, and until then it is safer to issue a fiscal receipt.
The rule: the obligation does not depend on whether you have a shop, but on how the customer pays. Offering cash payment on the website is enough to require a fiscal system.
The fine for not issuing a fiscal receipt and for trading without a fiscal system is EUR 600–1,000 for a micro trader and EUR 1,500–2,000 for a small trader, with a separate fine for the responsible person (Article 21-b). A temporary ban on the activity may also be imposed (Article 22). The company kept cash on delivery and installed the fiscal device in the warehouse the parcels are sent from (Article 11(2)).
The payment option also sets the moment VAT arises, if the company is registered. When the customer pays on the website before dispatch, the tax debt arises on receipt of the payment (Article 31(2) of the VAT Law), and when the customer pays on delivery, it arises when dispatch begins (Article 31(1)(1)).
Delivery charged to the customer is not taxed separately. Transport costs the seller charges to the buyer are part of the taxable amount of the goods (Article 17(2) of the VAT Law), so the rate for the goods applies even when delivery is a separate line on the receipt. For children's clothes that is 18%, and for books 5% (Article 30(1)(3)), for both the goods and the delivery. The courier invoices its service to you at 18% (Article 29), because only postal services of Macedonian Post are exempt from VAT (Article 23(4)).
You can agree with the courier that it pays the daily takings directly into your account. It usually pays an amount reduced by its fee, but the revenue is still the full amount of the fiscal receipts (Article 16(1) of the VAT Law), and the fee is an expense on the courier's invoice. If only the net payment is booked, revenue is understated and the payments do not reconcile with the daily financial reports from the fiscal device.
The jacket returned after five months
The second problem came from a text the website did not have. In November a customer ordered a jacket, and in April wrote that they were returning it and wanted a refund, without giving a reason. The website said only "exchange within 7 days".
In distance contracts the consumer has the right to withdraw within 14 days, without giving a reason (Article 127(1) of the Consumer Protection Law). The period does not run from the order, but from the day the consumer physically received the goods (Article 127(3)(2)).
The trader, in turn, must inform the consumer in advance of this right, the period and the procedure, and provide the prescribed withdrawal form (Article 120(1)(10)). If it fails to do so, the period is not 14 days but 12 months and 14 days (Article 127(6)).
The customer in April was within the period, and the cost fell on the company:
- it had to refund the full price including delivery, within 14 days of the notice, with the right to withhold the refund until it received the goods or proof they had been sent (Article 130(1) and (4));
- it also paid for the return shipment, because the customer had not been told this cost was theirs (Article 131(2));
- it could deduct nothing for the jacket having been worn, because the consumer is not liable for the diminished value of the goods when the trader did not inform them of the right of withdrawal (Article 131(4)).
The right of withdrawal does not apply, among others, to goods made to the customer's specifications, goods that deteriorate quickly, and sealed goods that cannot be returned for hygiene reasons once unsealed after delivery (Article 133(1)(3), (4) and (5)). Children's clothes are not among these exceptions.
The return also has consequences in the books. A cash receipt for a reversal transaction is issued, with the reversed fiscal receipt attached to it (Article 10(1)), so since the original is with the customer, keep a copy. If you are VAT-registered, you correct the tax (Article 22(1) of the VAT Law).
The order button is easily overlooked too. It must be labelled with the words "order with obligation to pay" or another unambiguous wording (Article 126(5)), otherwise the consumer is not bound by the order (Article 126(6)).
What to check
Go through your website as if you were a customer:
- Payment options. If you offer cash payment, you need a fiscal system. If you accept cards, ask UJP for an opinion.
- Delivery and courier. Delivery on the receipt takes the rate of the goods. Book the courier's payment gross, and its fee separately.
- Right of withdrawal. Does the website state the 14-day period, the procedure and who pays for returning the goods, and does it include the form (Article 120(1)(10) and (11))?
- Details and price. Name, address, phone and email, total price with all taxes and delivery costs (Article 120(1)(2), (3) and (5)), and no later than the start of the order, any delivery restrictions and the accepted payment methods (Article 126(8)).
- The order button. Labels such as "Continue" or "Finish" do not say that ordering creates an obligation to pay.
- Past orders. If you give the customer the information within 12 months, the withdrawal period expires 14 days after they received it (Article 127(7)). So correcting the text on the website is not enough; customers from the past year should be notified as well.
The fines here are high too: EUR 500–1,000 for a micro trader and EUR 1,000–2,000 for a small trader (Article 215).
When the buyer is a company, the withdrawal rules do not apply, because the law protects consumers. The company may, however, ask for an invoice (Article 53(1) of the VAT Law), and when it needs one and why a fiscal receipt is not always enough, we wrote in a separate article.