The saga of SAF-T reporting in Romania is just beginning. After the large taxpayers who were in the first wave of adoption (January and July 2022 respectively) come the medium taxpayers, who have a deadline of 2023, and the small taxpayers from 2025. According to Romanian National Fiscal Authority (ANAF), there are about 18,000 medium taxpayers, but the figures are relative because the criteria for classifications have been changed in the last two years and most likely the new list is based on the 2021 fiscal reports. A significant number of companies will certainly make the transition to SAF-T reporting in the first part of next year. Important to know, without being a reason for the postponement, there is a grace period of 3 months for the first report, from the date when the filing obligation becomes effective for the respective taxpayers.

This year, we assisted all clients in the category of large taxpayers to adopt the SAF-T reporting system, in an automated way through SAP Business One. For some large taxpayers with a July 2022 filing deadline, projects are still ongoing. An important conclusion emerging from this experience is that preparation for SAF-T is essential and should not be limited only to adjusting the ERP system to export the data in the XML format required by the fiscal authority. Equally important is the preparation of data sets and the mapping of charts of accounts to have records according to the SAF-T format, as well as checking the accuracy and integrity of reporting to the authorities.

It is not an impossible process, but it is not simple either. That is why we recommend starting this process as early as possible (at least 6 months), to have the necessary peace of mind to overcome any challenges. Most of the clients who fluently passed the SAF-T reporting started their preparations about a year before the official deadline.

 

SAF-T highlights

  • The implementation of SAF-T (Standard Audit File for Taxation) is a European approach, which will be generalized in the coming years
  • Reporting in SAF-T format is a complex procedure that requires the extraction of specific data
  • More than 18,000 medium taxpayers will have to switch from 2023 to SAF-T reporting
  • There are over 260 mandatory fields that must be filled in and mapped by taxpayers for submitting the D406 ANAF statement
  • Legacy ERP systems cannot generate the XML files associated with SAF-T reporting
  • The manual preparation of the declaration in SAF-T format is difficult and with a high risk of error
  • The fines for not submitting the D406 Declaration or incomplete/incorrect submission are high

 

Challenges

 

The premise of the SAF-T implementation approach is that for a small-medium company with a high volume of transactions, it is impossible to submit the D406 declaration correctly without a modern ERP system. There are more than 260 fields that must be mapped in the system to obtain the declaration, which creates a high level of complexity, both at the accounting and technical levels. One important challenge is understanding the requirements and data sets that must be sent to the authorities.

At this stage, discussions with the teams of consultants are necessary to verify and reconcile the information in the databases, followed by possible changes to the method of collection and registration. A second challenge is the effective mapping and coding of the charts of accounts in the ERP system for the automatic and correct obtaining of the D406 declaration as well as the verification of the records. For any taxpayer, in the end, it matters to obtain the new declaration, equally correctly, quickly, and easily. In vain, he gets it quickly, if it is not in the correct format, but also if he reports correctly, but with too much work, he exceeds the official deadline.

From the perspective of System Innovation Romania, involvement in SAF-T projects had a similar approach for all clients: analysis of accounting plans and existing data sets, verification and assurance of correspondence with SAF-T requirements, correction of the master data registration method, running statements over multiple historical periods, validating the format and correcting the data where necessary. Also, a challenge is to be able to assemble a proper team and start the project on time.

 

SAF-T lessons learned

 

We asked some customers what advice they have for companies that are going to implement SAF-T. Here are some recommendations:

 

”My recommendation is to start the preparations as early as possible, because the adoption of SAF-T involves numerous discussions with the consulting team, as well as the careful analysis, followed by a possible adjustment, of the way of collecting and recording data in the ERP system.” Nina Nicolae, Chief Accountant, Vitall

“It is impossible to implement such a project without a consulting team trained in this regard. Understanding the data required to be transmitted and the mappings on taxes are quite complicated. ” Tatiana Savin, Financial Director, International company, SAP Business One customer.

“Start early and consider changing the way you operate and record data, to be able to correctly code the transactions reported in SAF-T and comply with the rules defined by the tax authorities.” Georgeta Balba, Financial Controller, AFI Europe Romania.

“I recommend approaching the subject and starting the implementation procedures at least 6 months before the actual submission deadline, to ensure that they will be able to cope with the new requirements. It is also advisable to analyze the ERP system and identify the best and most efficient solutions for collecting the information necessary to implement the D406 Information Statement.” Iustina Couti, Economic Director Ramira.

 

The bottom line?

 

Don’t postpone SAF-T implementation, but start as soon as possible. Prepare your ERP system for this moment, and if you don’t have a modern ERP system now is the time to make a change. Thanks to its international footprint, SAP Business One enables an easy transition to SAF-T and the ”RO-Facturare” system and reduces the effort associated with adapting to any change in tax legislation and regulations.

For any information about the SAF-T reporting system, please contact us at office@sysinconsult.ro

 

 

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