Everything you need to know about SAF-T for your company's tax compliance
Standard Audit File for Tax, better known as SAF-T, is a file type based on the XML standard used internationally for electronic exchange of tax information.
In a globalized environment with widely varying accounting systems, standardization is critical for identifying tax fraud quickly and effectively. Many European tax authorities have adopted this system to gain greater control over tax data.
SAF-T was introduced by the Organization for Economic Cooperation and Development (OECD). SAF-T files are generated in a common, readable and easily-exportable format regardless of the software used according to a defined set of accounting records.
The files contain reliable information so tax authorities or external auditors can quickly identify anomalies in businesses’ accounting.
What are the benefits of SAF-T?
Using SAF-T provides benefits for tax authorities and taxpayers.
- The files are secure.
- Simplifies procedures for collecting tax data in electronic format since the there are fewer documents issued.
- Standardized format ensures readable data regardless of what system it comes from.
- Using a SAF-T as a file source improves the quality and availability of data for businesses.
- It makes tax administrations’ audits faster and more efficient.
- It promotes tax compliance by simplifying reporting requirements and facilitating the audit process by tax authorities.
- The shared format also streamlines compliance tasks for taxpayers, even when operating in different countries with different tax requirements.
- Easy access to mandatory information reduces administrative costs for tax administrations.
- It also reduces costs for businesses; since without SAF-T they would have to devote more resources to adapting data to a readable format or employ specialized personnel.
SAF-T experiences in Europe
In Europe, SAF-T is widely used for VAT compliance and for the reporting of other electronic accounting data. SAF-T is currently used in: Portugal, Hungary, Poland, Norway, Lithuania, Luxembourg and Austria.
Here are some of the projects EDICOM has participated in:
Portugal implemented the system in 2008. Actual expansion began in 2013 when a law was adopted which required companies to migrate to the SAFT-PT electronic system. Since then all Portuguese companies had to adapt their ERPs in stages and establish automatic communication channels with the Directorate General of Taxes (Direcção Geral de Contribuições e Impostos, or DGCI). In 2018, companies were also required to include these control fields in the new SAF-T accounting file: itemized list, clients and suppliers; VAT classification, accounting movements and chart of accounts.
EDICOM is an authorized partner in Portugal and offers a solution certified by the DGCI. EDICOM’s platform generates, sends and stores electronic documents in compliance with the requirements of the Portuguese tax authority.
Poland uses the SAF-T JPK_VAT system for electronic VAT returns, which is mandatory for both Polish companies and businesses operating in the country. As of April 2020, a new format which changes the data structure of the file will be mandatory for large companies (and for all taxpayers on 1st July 2020).
The new electronic file will consist of two parts, One for for VAT records (purchases and sales information) and another for the VAT return data.
In Poland, EDICOM offers a SAFT-T solution that generates, sends and stores electronic documents in compliance with the requirements of the Polish tax authority. It also meets all requirements for signing SAF-T JPK_VAT files. Before the files are sent to the tax authority advanced electronic signature mechanisms with a recognized electronic certificate are applied as required by law.
As of January, Norwegian companies with a turnover of more than EUR 500,000 must send accounting data in SAF-T format to.
EDICOM’s solution collects all the required accounting data from a company's management system. The system is fully automated and adapts all of the data to the SAF-T standard, finally it sends it to the Norwegian tax authority via Altinn (internet portal for digital dialogue between businesses, private individuals and public agencies).
A pilot project has been launched to implement this system in Hungary. It is scheduled to go into effect on January 1, 2021.
EDICOM’s solution for tax compliance
EDICOM has created the Global VAT Platform. The platform offers a complete solution for businesses, especially multinational companies. It is a B2B2G electronic communications platform with global capabilities that can support both VAT and e-invoice compliance.
How does it work?
- The system integrates with your company's ERP and automatically collects tax and invoice data.
- It generates XML SAF-T files in compliance withthe required data structure for the country your company operates in.
- It connects with the tax authority through EDICOM's public administration hub via web services.
- The system can integrate status notifications from the tax authority.
- It guarantees secure long-term storage of XML invoice files and their statuses, according to the European eIDAS (Electronic Identification, Authentication and trust Services) standard.
- It also can apply other security measure that may be required, such as electronic signatures.
Additional advantages of EDICOM’s Global VAT Platform
- The platform is designed to handle electronic VAT declarations and e-invoicing, as well as all other commercial and tax-related communications. Edicom’s platform is a completely scalable solution that will fully satisfy the reporting and communication needs of your company.
- It provides tax and invoice compliance platform adapted for use in more than 60 countries, allowing you to centralize all your procedures in a single solution.