SAF-T – Where Are We Now?

Paul Trowbridge
June 19, 2019

Anyone who has been closely following SAF-T announcements over the past few years may be forgiven for thinking that it all seems rather like Groundhog Day.  Commencement dates and reporting requirements have been announced and subsequently amended and re-announced as the respective countries re-evaluate their needs and the readiness of companies to provide the data in the prescribed formats.

Earlier this month Poland announced that the changes planned for 1 July 2019, requiring mandatory filing of SAF-T information and the corresponding withdrawal of the requirement to submit a periodic VAT return, have now been deferred to January 2020. 

Also this month, Romania announced plans to become the eighth country to introduce SAF-T by introducing requirements for transactional reporting by the end of 2020.   

So, what is SAF-T, what is the latest position for countries which have introduced legislation and what lies ahead?

SAF-T – The Standard Audit File for Tax

The Standard Audit File for Tax (SAF-T) was developed by the Organisation for Economic Co-operation and Development (OECD) with the aim of producing a standardised format for electronic exchange of accounting data from organisations to their national tax authority and external auditors.

The two key principles behind SAF-T are that;

  1. Organisations should be able to export information from their accounting systems (invoices, payments, general ledger journals and master files) into a standardised format and
  2. Tax authorities and external auditors should be able to make their tax inspections and audits more efficient and effective as a result of data being made available to them in that standardised format.

In 2005 the OECD released the first version of the SAF-T schema which provides details of what should be included in a SAF-T xml reporting file and how that data should be formatted and structured.  The original schema was based on the general ledger and details of invoices and payments, together with customer and supplier master files.  A second version of the SAF-T schema was released in 2010 to incorporate information about Inventory and Fixed Assets.

What the OECD have not defined, and what remains the responsibility for the tax administration in each country to decide, is the exact format in which the data is to be captured and when and how it is required to be sent to the tax administration.

Different approaches

What has emerged from those countries which have adopted SAF-T are three broad approaches;

  • Data to be provided at the request of the tax authority (usually prior to a tax inspection or audit)
  • Submission of data periodically in addition to the periodic VAT return
  • Submission of transactional data as a replacement to the periodic VAT return

In some cases, the mandate starts with a requirement to produce data on request and evolves through to periodic submissions.

Where are we now?

There are currently seven countries which have introduced legislation enforcing SAF-T requirements.

Portugal

Portugal was one of the first adopters and Portuguese entities have been required to extract data into the SAF-T file format (based on version 1 of the OECD SAF-T schema) since 2008 on an annual basis.  Further extensions to collect sales invoice data and other documents on a monthly basis followed in 2013.

Luxembourg

Luxembourg introduced the requirement to extract data in the relevant format in 2011.  It only applies to Luxembourg resident companies subject to the local chart of accounts and is only required to be submitted when requested by the tax authority.

France

France introduced a SAF-T requirement in 2014, using a proprietary format rather than the OECD standard SAF-T schema, requiring files to be submitted in txt format.  It is currently only required to be filed on demand when requested by the French tax authority.

Austria

Austria introduced SAF-T in 2009 and is currently only required on demand when requested by the tax authority.

Poland

Possibly the most significant implementor of SAF-T to date, with large companies having had to file monthly JPK (Jednolity Plik Kontrolny) returns since 2016.

Lithuania

Lithuania introduced the requirement to file the SAF-T based i.MAS on a phased basis, starting with the largest organisations in 2016 and working towards mandating SAF-T for all businesses by 2020.  The i.MAS comprises three parts, i.SAF reporting of sales and purchase invoices on a monthly basis, 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.

Norway

SAF-T has been in place on a voluntary basis since 2017 and there are proposals to mandate it, on an ‘on-demand’ basis from January 2020.

What lies ahead for the future of SAF-T?

Countries which are receiving regular, transactional level details under SAF-T may look to reduce the periodic VAT return requirements.  This is because the need to prepare a VAT return summarising the details which the tax authority already receives on a transactional basis can be seen as unnecessary duplication. 

Poland is proposing that SAF-T data submissions will displace the need for filing a VAT return from January 2020.

Romania is proposing a phased transition to filing of transactional data from 2020, starting with large organisations, with a reduction in the VAT returns which are required to be filed.

 

Take Action

To find out more about what we believe the future holds, follow us on LinkedIn and Twitter to keep up-to-date with regulatory news and other updates.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Paul Trowbridge

Paul Trowbridge is a Senior Regulatory Specialist at Sovos, with responsibility for ensuring that the SVR product is kept updated and compliant with the latest VAT legislative changes. Paul is a Chartered Accountant and Chartered Tax Adviser and prior to joining Sovos worked in a number of tax technology roles within PwC, EY and UK based software companies.
Share This Post
Share on facebook
Share on twitter
Share on linkedin
Share on email

North America ShipCompliant
June 18, 2021
How to Streamline Your Wine Shipping With UPS and FedEx

Wineries that use FedEx or UPS to print shipping labels for beverage alcohol packages can integrate with ShipCompliant to streamline the fulfillment process. This means: No more typing addresses to print labels One click can pull all shipment information from ShipCompliant into FedEx or UPS –  your labels are ready to print Tracking numbers sync […]

EMEA Tax Compliance VAT & Fiscal Reporting
June 17, 2021
Poland VAT Reporting: Draft Amendments to JPK_V7M/V7K Published

In Poland, the Ministry of Finance proposed several changes to the country’s mandatory JPK_V7M/V7K reports. These will take effect on 1 July 2021. The amendments offer administrative relief to taxpayers in some areas but create potential new hurdles elsewhere. Poland JPK_V7M and V7K Reports The JPK_V7M/V7K reports – Poland’s attempt to merge the summary reporting […]

North America ShipCompliant
June 17, 2021
Can Retailers Do Direct-to-Consumer (DtC) Wine Shipping?

The demand among retailers and consumers for interstate direct-to-consumer (DtC) wine shipping is growing, further bolstered in the wake of the COVID-19 pandemic. Retailer DtC shipping is allowed in just 15 states and the District of Columbia, but retailers still saw significant increases in online orders and DtC shipping in the past year. But what […]

EMEA VAT & Fiscal Reporting
June 16, 2021
VAT Trends: A Shift Toward Destination Taxability for Certain Cross-Border Transactions

As detailed within our annual report VAT Trends: Toward Continuous Transaction Controls, there’s an increasing shift toward destination taxability which applies to certain cross-border trades. In the old world of paper-based trade and commerce, the enforcement of tax borders, between or within countries, was mostly a matter of physical customs controls. To ease trade and […]

EMEA Latin America Mexico VAT & Fiscal Reporting
June 15, 2021
Understanding Mexico’s Carta Porte Supplement

On 1 May 2021, the Mexican tax administration (SAT) released one of the most important updates to the electronic invoicing system of the country since 2017. The update was about the new Bill of Lading Supplement (locally known as Suplemento de Carta Porte) that should be added as an annex to the electronic invoice (CFDI) […]