Standard Audit File for Tax (SAF-T) in the EU and Beyond

The Polish and Norwegian tax authorities are on course to fully implement SAF-T reporting obligations from 1 January 2018.

SAF-T was first introduced in Poland in July 2016 for large tax payers and is now being extended to all Value Added Tax (VAT) registered companies. It is being introduced for the first time in Norway.

What is SAF-T?

SAF-T is an electronic file designed to enable the efficient and consistent exchange of tax information between companies and international tax authorities and is already a filing requirement in many European countries.

The information submitted in the SAF-T is extracted from the company’s accounting software and is electronically filed with the relevant tax authority. The data required will vary depending on the specific requirements in that country, but will include details of transactions from the general ledger, purchase ledger, sales ledger, fixed assets register, stock register and bank accounts.

In Norway, companies will initially only be required to submit a SAF-T when requested; however, a SAF-T reporting sales threshold of NOK 5m (approximately €550k) per annum has been introduced. This would make SAF-T filings mandatory for businesses (including non-resident VAT registered businesses) that have generated these sales revenues.

Why has SAF-T been introduced?

The development of SAF-T is part of the wider ongoing program by the Organisation for Economic Co-operation and Development (OECD) to deal with the increase in eCommerce in recent years.

Whilst the OECD have set the standards to be adopted within the SAF-T, freedom has been given to each tax authority as to the exact format, level of detail and deadline. This will allow each local tax authority to have real time information aligned with their current reporting requirements and timeframes and to facilitate closer control of the collection of indirect and direct taxes.

Countries who have adopted SAF-T

Since Portugal first introduced SAF-T in 2008, Luxembourg, France, Austria, Lithuania and Poland have also adopted it, although in some cases not to all businesses. Countries next expected to adopt SAF-T in some capacity are Germany, UK, Ireland and the Czech Republic.

Benefits of SAF-T for businesses

Whilst this does mean additional reporting requirements for businesses, there are some benefits:

  • the information collected by local authorities through SAF-T should mean less tax enquiries, as the information often requested as part of these visits will already be accessible;
  • SAF-T will encourage better archival procedures for businesses; and
  • once fully implemented in Europe, SAF-T may reduce the cost to business of meeting compliance requirements for multiple jurisdictions (with one standard reporting file submitted rather than multiple local filings, each in their own format).

For more information on this latest development, please contact David Jenkins.

David Jenkins
Head of GEA Network
+44 (0)20 7430 5881

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