SAF-T a new reporting system.

SAF-T as a Digital Reporting Innovation!

As time passes, the fin-tech world expands. Tax authorities are adopting new digital systems to conduct more effective inspections. We observe it all over the world.

At some places, it is e-Invoicing system and at others, it is digital reporting. One of those digital reporting innovations is SAF-T. OECD introduced SAF-T format in 2005.

In this article, You could find what is SAF-T and why, on what aim, OECD introduced it.

What is SAF-T?

The Standard Audit File for Tax (SAF-T) is an electronic, XML based, internationally standardized format for submitting tax, VAT accounting reports, from companies to tax authorities or external audits. SAF-T also requires to use of standardized VAT codes and charts.

OECD Introduction of SAF-T

OECD developed the SAF-T format and released the first version at 2005, including what it should be in the SAF-T .xml reporting file and how it should be structured. It was based on the general ledger, details of invoices, payments with the customer, and supplier master files.

The second version of SAF-T was published in 2010 by OECD based on incorporate information about inventory and fixed assets.

The purpose of SAF-T was making more efficient and effective tax inspections. With electronic and standardized format, tax authorities and external audits would be able to easily and quickly identify the misstated VAT entries.

Now, SAF-T file requires to include;

  • All postings (general ledger, customers, suppliers, and VAT)
  • Accounting Receivables
  • Account payable

Moreover, while OECD decides what is required to be in the file, local tax authorities determine the format, when and how to submit the report. Therefore, the format and the sequence of submissions differentiate.

What is the Goal of SAF-T?

As I’ve mentioned before the aim of SAF-T was to make more efficient and effective tax inspections; SAF-T format enables tax authorities and external audits to simply identify non-compliance in their tax reporting within a few minutes.

Countries which are requiring SAF-T; submission of regular transactional level details, may reduce the periods of VAT Return requirement for not to duplicate the data which is being collected.

Right now, there are 3 different approaches to SAF-T;

  • Submissions on request by the tax authorities.
  • Periodical submission alongside with VAT Reports.
  • Submissions of transactional data as a VAT Return requirement.

In fact, Deloitte backs up 3rd approach and states that the aim is to replace VAT forms, tax filing, etc. with SAF-T.

Norwegian SAF-T

SAF-T started in 2017. It was a voluntary submission process. Though as of 2020, Norwegian tax authorities required SAF-T to being submitted when it is demanded.

Who is in the Scope in Norway?

Companies subjected to the bookkeeping legislation is in the scope of SAF-T.

Companies not subjected to the requirement;

  • Companies with 600 or fewer vouchers per year
  • Companies with NOK 5 million or less in annual turnover
  • Which keep manual/ paper based accounts.
  • The VAT on e-Services (VOES) companies

Countries with SAF-T Approach

Portugal

Started in 2008, with the first version of SAF-T. Later on, In 2013, an extension was made which added sales invoices and other documents and changed the submission period from annually to monthly.

Luxembourg

Started in 2011 only for resident companies. Submissions occur on the tax authorities demand.

France

Started in 2014 with a proprietary (txt.) format rather than the OECD’s format. Submissions occur on the tax authorities demand.

Austria

Started in 2009. Submissions occur on the tax authorities demand.

Poland

Started in 2016 and possibly the most significant implementor of SAF-T. Large companies have had to file JPK (Jednolity Plik Kontrolny) including JPK_VAT which reported monthly.

Lithuania

Started in 2016 with the largest organizations and in 2016, It’s planned on mandating SAF-T for all businesses by 2020. Lithuania has introduced the SAF-T based on i.MAS basis.

The i.MAS comprises three parts, i.SAF reporting of sales and purchase invoices every month, i.VAZ reporting of transport/consignment documents and the i.SAF-T accounting transaction report, which is only required when requested by the tax authority.

Handle Reporting with Sovos Foriba SAF-T Cockpit!

SAF-T format differentiates from country to country. While this makes harder to adapt, it also complexes taxpayers’ creation of detailed reports from SAP.

Digital reporting SAF-T Cockpit landscape

Sovos Foriba SAF-T Global Cockpit allows;

  • Manage SAF-T global
  • Taxpayers to manage all SAF-T requirements of the various jurisdictions within their SAP
  • Comply with the legal and technical requirements of the jurisdictions
  • Communication to tax authorities where integration is possible through web services, file sharing possibilities applicable
  • Reporting in various formats (xml, .csv, xlsx etc.)

To explore how Sovos Foriba SAF-T Global Cockpit works and simplifies the process, Contact us or book a meeting directly!

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