SAF-T is a topic that is already arousing everyone’s interest, even if the first deadline, January 1, 2022, is impacting large taxpayers only. On August 16, the voluntary testing for the submission of the Informative Statement D406T began, including the XML file in SAF-T format and most likely there will be a period for adjustments of the rules and preparation of the financial and accounting management information systems.
What is SAF-T and why do we need it?
Basically, SAF-T is an XML file that contains accounting records and classifications that are automatically extracted from the management systems of companies and collected by the tax authorities after the submission of the said statement. With SAF-T, ANAF will be able to perform some electronic verifications without having to perform fiscal controls or inspections at the taxpayer’s premises.
Developed by the Organization for Economic Co-operation and Development in the early 2000s, the Standard Audit File for Tax (SAF-T) is an international standard for the digital exchange of tax data between taxpayers and tax authorities. In Romania, SAF-T serves the submission of the Informative Statement D406 (called D406T during the testing period) used for sending VAT reports. Basically, SAF-T is an XML file that contains accounting records and classifications that are automatically extracted from the management systems of companies and collected by the tax authorities after the submission of the aforementioned statement. Through SAF-T, ANAF will be able to perform some electronic verifications without having to perform fiscal controls or inspections at the taxpayer’s headquarters.
What’s in it for companies if switching to SAF-T
According to PWC Romania, the implementation of SAF-T has at least three major implications for taxpayers:
- Shorter fiscal inspections and implicitly shorter interruptions of the business activities
- Shorter VAT refund time based on earlier identification of non-conformities in declarations
- Reduced risk for penalties by conducting preventive analyses and easier identification of inconsistencies and their communication to taxpayers
From the authorities’ point of view, a major impact of the implementation of SAF-T will be an increased VAT collection rate. The most often cited study case is that of Poland who managed to reduce the difference between the VAT due and the VAT collected from 24% to 14% in no more than two years. In Poland, however, the implementation of SAF-T was correlated with fiscal reforms and healthy cooperation with the business environment.
Obligation and contraventions
In August, authorities provided a number of additional clarifications on SAF-T. Thus, companies will submit the Informative Statement D406 monthly or quarterly, depending on the tax period for which they report the VAT. Taxpayers who are not registered for VAT purposes will submit the SAF-T file quarterly. It is important to mention that the obligation to submit this statement is gradual, which gives companies the necessary time to prepare.
Thus, large taxpayers will have to submit the new statement as of January 1, 2022, for medium taxpayers the reporting obligation will occur during 2022, and for small taxpayers as of 2023.
Another complex topic is the taxpayer classification criteria, which the authorities said will be rethought in 2021. For more details on this regard, we recommend this article on how taxpayers will be reclassified by ANAF in 2021 versus how is now determined what kind of taxpayer you are.
In fact, the testing phase that started on August 16 has the role of preparing the information systems for the transition to SAF-T. D406T forms, SAF-T files and the information transmitted through them are not processed, stored, archived, or used as tax information and are not used for subsequent risk analyses by ANAF. Also, there is a three-month grace period for the first report, during which the failure to submit or the incorrect/incomplete submission will not be sanctioned.
Solutions for SAF-T
Theoretically, companies have several options for managing this statement: developing/implementing dedicated functionalities in the ERP system, using a dedicated SAF-T reporting tool or even outsourcing the submission of this statement to a service provider.
SAP Business One clients in other countries (Portugal, Poland, etc.) have already gone through the SAF-T experience. System Innovation Romania currently evaluates projects carried out on these markets in order to provide local clients with a set of good practices depending on the various categories of beneficiaries. The transition to SAF-T involves both technical and fiscal audit aspects, so that in the end companies can obtain a coherent, correct, and efficient reporting system.
At this stage, we recommend that customers take the time and attention necessary to switch to SAF-T, which will become mandatory sooner or later, regardless of the economic footprint they have. It is important to identify and implement the right solution both for compliance with the terms and especially for the coherence and validity of the data. We will come back to you with more details on this topic.