As a person required to keep records, you must maintain records. We set out the rules in our article You must keep records.
Administration
The law does not specify exactly what you are required to keep records of. It merely states that your records must at all times clearly show your rights and obligations. It also stipulates that the records must be organised in such a way that they can be audited by the tax authorities with sufficient reliability within a reasonable timeframe.
Cash register rolls
At the Gelderland District Court A case recently came before the court in which the operator of a cafeteria had not retained all the detailed records. The business owner had, after all, entered this information into the till system. Among other things, this concerned the till rolls, only some of which had been retained.
However, the Court ruled that this data did indeed fall within the scope of the record-keeping obligation and should therefore have been retained. The fact that the till system did not provide the necessary functionality for this was the responsibility of the business owner. On the basis of the portion of the till rolls that had been retained, it was not possible to carry out a reliable audit of the canteen’s revenue accounts.
A reliable sample
The business owner argued that, based on the cash register rolls that were available, a sufficiently reliable sample check could be carried out. Given the quantity and length of the cash register rolls, a full audit would, after all, have been an impossible task for the tax authorities. He also took the view that a cross-check would serve no purpose because the restaurant operated on the basis of weekly special offers. Neither argument was accepted by the Court.
The canteen operator had also failed to keep the daily Z-reports. As virtually all of the business’s turnover was generated through cash payments, the absence of this detailed information also made it more difficult to audit the accounts.
Reversal of burden of proof
The business owner was therefore unable to comply with the information order rightly issued by the Tax and Customs Administration. The consequence of this is a reversal of the burden of proof: it is not for the Tax and Customs Administration to prove that the profit was under-declared. The business owner must prove that the Tax and Customs Administration has set the tax assessment too high. Without complete accounts, it is (virtually) impossible to meet that burden of proof.