Norway will soon require SAF-T (Standard Audit File for Tax), electronic submissions of transaction-level accounting records, joining a growing number of European countries that are adopting eAccounting.
Across the world, the wave of change continues to sweep over more countries, as governments move to require real-time or near-real-time transactional reporting. Tax administrators in 69 countries now rely on data extracted electronically from taxpayers’ systems to carry out VAT and GST audits.
These governments are leveraging software that enable them to conduct audits remotely in a more effective, less expensive manner and fight fraud by detecting indirect tax errors and weaknesses in taxpayers’ accounting systems and controls.
SAF-T, an initiative by the Organisation for Economic Co-operation and Development (OECD), aims to standardize the elements, structure and format of accounting data and enhance cooperation between governments. Austria, France, Lithuania, Luxembourg, Portugal and Poland already require SAF-T filing, and soon, SAF-T will become mandatory in Norway.
There are some differences in the way SAF-T is being implemented in these countries. For example, in Norway, SAF-T is required only in the case of a tax audit, while in other jurisdictions, like Portugal and Poland, all VAT registered businesses must submit a SAF-T file on a monthly or quarterly basis. However, the transactional and accounting documents required under SAF-T are consistent, including:
- General ledger
- Accounts payable
- Accounts receivable
- Fixed assets
- Inventory movements
In Norway, much like the other countries, the move to SAF-T will require businesses to make significant changes to their IT systems and internal processes. When the new requirements go into effect, businesses must:
- Eliminate manual accounting and compliance practices
- Link internal bookkeeping systems electronically with government tax collection and auditing systems
- Ensure they can produce reports with standards-compliant data
All companies that maintain accounting records electronically and that are subject to Norwegian bookkeeping rules will be required to submit SAF-T files once the law goes into effect, except those with less NOK 5 million in turnover or fewer than 600 documents a year.
Post by Jeroen Wensveen
Sovos is the only tax compliance company that has global experience addressing B2G transactional reporting mandates, enabling seamless integration with companies’ native ERP environments.
For more details on SAF-T in Norway, watch our webinar, and if your company is operating in Norway or other countries consider eAccounting, such as Bulgaria, Netherlands, Romania, Russia and Vietnam, contact Sovos to learn more about how to prepare for these major changes to your business processes.