Invoice and Cash
August 14, 2009 | 15,00 EUR | answered by FP Fischer Robert Fischer
Independent artist:
After handing over a sculpture to the client, the amount (approximately 20,000 euros) was handed over in cash. There is also an invoice for the work, with the note: Handover in cash. The client is a wealthy individual without a company background. How does the tax office handle such a cash handover? The amount naturally appears in the income-expenditure calculation. Will the invoice be accepted by the tax office?
Dear inquirer,
First of all, thank you very much for your inquiry, which I would be happy to answer based on the information provided and in the context of your initial consultation. The response will be based on the facts presented. Missing or incorrect information about the actual circumstances can affect the legal outcome.
In principle, there is no tax difference between cash transactions and non-cash transactions. The tax office accepts cash transactions as well as non-cash transactions. Cash payment is common practice in many areas of economic life (e.g. car dealers, bakers, butchers, restaurateurs) and is not objected to. However, the tax office, as with non-cash transactions, has the possibility to send so-called control reports to the tax office of the other party involved in the transaction in order to verify the tax registration of the transaction. Since, according to your information, the recipient of the sculpture will probably not claim any operating expenses or advertising costs deduction, a control report is unlikely.
For your information:
The situation is different with the Money Laundering Act!
In implementation of the 3rd EU Money Laundering Directive (2005/60/EC of October 26, 2005, Official Journal 2005, p. L 309/15), the Money Laundering Act (GwG) was revised and the Banking Act (KWG) and the Insurance Supervision Act (VAG) were amended. The Money Laundering Act (GwG) in force since August 21, 2008 (GwG) of August 13, 2008 (Federal Law Gazette I 2008, p. 1690) includes not only banks and insurance companies, trustees and brokers as well as lawyers and tax advisors, but also all "persons who trade commercially in goods." It practically affects the entire economic life and every contract. Although there are value limits (e.g. €15,000) and the legislator can exempt certain transactions, every obligated party (§ 2 GwG) - so every business person as a responsible entity - must comply with certain due diligence obligations (§ 3 GwG). Internal security measures (§ 9 GwG) must be taken, up to the appointment of an anti-money laundering officer in certain industries (§ 9 (2) GwG). The obligations include initially identifying one's contracting party and verifying their identity (§ 4 GwG). In addition, there may be an obligation to obtain information about the purpose and intended nature of the business relationship and to clarify whether the contracting party is not acting on behalf of another economically entitled person (§ 3 (1) nos. 2 and 3 GwG). The information collected must be recorded and generally kept for five years (§ 8 GwG). In case of suspicion of money laundering, the Federal Criminal Police Office - Central Office for Suspicions - (§ 10 GwG) must be informed and, if necessary, the public prosecutor's office must be involved (§ 11 GwG). The affected person must not be informed (§ 12 GwG). All obligations are usually subject to a fine (§ 17 GwG).
In the present case, it should be sufficient for you to keep a copy of your customer's ID. Since, as described, you have no suspicion of money laundering, there is no need for a corresponding report.
I hope that this information has provided you with a sufficient overview of the situation and remain
Yours sincerely,
Robert Fischer
Dipl.-Betriebswirt (BA)
Tax advisor
