The Italian, Polish, Lithuanian and Spanish authorities passed a series of measures aimed at detecting and combating tax fraud. The aim is to get close to real-time information of company transactions, which will allow the tax authorities to perform a more efficient tax audit and reduce processing time. Companies face business challenges to implement these new requirements.
For companies that run SAP we have developed a SAP add-on solution by which the requirements can be met in time and in an automated fashion.
In Spain a new VAT reporting system “Suministro Inmediato de Información” (SII) will enter into force on the 1st of July 2017 that will impact approximately 62,000 companies.
Submit almost real time These companies have to submit electronically to the Spanish tax authorities data from all AP and AR invoices within 4 days after an invoice is either issued or booked. In the first 6 months - as a transitional period - the companies will have 4 extra days (8 days in total) to submit these invoices.
Automated extraction of the invoice data will be essential to meet the new rules in an automated fashion. The required invoice data has to be transformed in the required SII format (XML) and due to the short deadlines for submitting the report it is preferred to do it in the source system where the invoices are captured. For most companies the required data are already available in the SAP system.
When e-submission of invoice data is implemented the administrative burden will also be lowered as only certain tax self-assessments has to be filed and certain cumbersome declarations no longer need to be submitted.
Businesses classified as large companies will have just over 6 months to adopt this new requirement in its processes, controls and systems. It will be a real challenge. Failure to comply in time could result in penalties and increased risk of a tax audit.
We developed a SAP add-on solution by which the e-submission of the required data from AR and AP invoices is fully integrated in SAP without an external interface or use of external software. With this add-on the submission of the requested invoices can be done automatically and in time.
- How to get ready in time for SII Spain
- SII VAT filing submission: we successfully met first submission deadline
- SAP end-to End solution for periodic SII files in Spain
- España 1 de julio de 2017: Suministro Inmediato de Información a las autoridades (SII)
- SAP Solution para el Suministro Inmediato de Información (SII) en España
- A SAP add-on to be able to cope with SAF-T and e-tax audits
- A cost efficient way to submit SAF-T files and perform risk management
Filing SAF-T will be mandatory for large taxpayers: employ more than 250 people or 50 million EUR sales revenue irrespective of whether they are established in Poland or not. Per 1st July 2018 this extended to taxpayers with more than 9 employees or 2 million EUR sales revenue.
Foreign businesses not having a branch and/or fixed establishment but that are registered for VAT in Poland fall within the scope of the above reporting requirement when above conditions are met.
On 19 May 2016 the Upper Chamber of the Polish Parliament passed a bill on the amendment of provisions of the Tax Ordinance and of some other acts. According to the bill adopted by the Parliament, the obligation to generate VAT reports in a SAF-T data format and their monthly reporting to the tax authorities will apply initially only to the largest enterprises for each month begun on or after 1 July 2016.
It means that Large Enterprises will be obliged to file VAT reports in the SAF-T data format already on 25 August 2016. Thus, Large Enterprises will be obliged to submit in monthly period VAT register in SAF-T format (according to JPK_VAT structure 4 – VAT register) even if the VAT reporting period is quarterly.
Taxpayers will be obliged to submit the SAF-T format:
- On request in the case of a preliminary tax inquiry, a tax audit and tax proceedings;
- Monthly mandatory – with respect to the VAT sales and purchases records only (Article 109(3) of the Value Added Tax Act of 11 March 2004 (VAT records) by submit monthly a SAF-T file that contains VAT sales and purchase records.
The first requests to submit audit files at their discretion will likely take place around September 2016. The monthly VAT reports on 25 August 2016. Not complying with this obligation will not only negatively affect the position of taxpayers during a tax audit but also result in unforeseen tax costs as penalties will be levied.
Final version of SAF-T structures
- Structure – accounting records
- Structure – bank statement
- Structure – warehouse
- Structure – VAT register
- Structure – invoices
- Structure – tax register of revenues and expenses
- Structure – evidence of revenue
SAP and SAF-T Poland
SAP developed currently only an extraction tool for SAP ECC 6 and higher version. The generation of the SAFT-PL XML files is not included. Certain companies use “older versions” of SAP (SAP R/3) and will not be supported by SAP.
Based on SAP's OSS notes, SAP provides only at the moment a functionality for gathering and downloading some transactional data. However, it is not the complete set of data required and the creation of the SAF-T file for the tax authorities is also not included. The functionality will also only be available for companies established in Poland and not for companies with a foreign Polish VAT registration.
That means lots of SAP companies will face compliance problems and this is just a start point as SAF-T will as you know expand globally.
In order to be able to comply with the requirements and provide the XML file on request in time, tooling needs either to be developed or purchased.
We offer a Full SAP integrated solution with cockpit to create monthly VAT XML file (JPK-VAT) an on request audit files (JPK-FA, JPK-KR, JPK-MAG and JKP-WB). E-submission with signature and encryption of monthly VAT XML files.
Quarterly informative report VAT invoices data
Starting from 1 January 2017 a new informative report of VAT data related to AP and AR invoices, including related credit and debit notes and customs bills, has to be filed by taxpayers on a quarterly basis (former Spesometro).
This new report should include the following data:
- The parties involved in the transaction: VAT number, name, address, fiscal representative
- Date and reference number of the invoices
- Taxable basis, VAT rate and VAT amount
- Type of transaction, reason of VAT exemption
- For correction invoice the reference to the reported original invoice
The deadline for filing will be the last day of the second month following each calendar quarter (e.g., 31 May 2017 for the first quarter of 2017). Penalties apply in range from a minimum of € 2 to a maximum of € 1,000 per quarter will be imposed for any omission or incorrect filing of each invoice.
We offer a new SAP add-on solution by which the quarterly informative report can be submitted timely via our integrated SAP solution in an automated fashion. We can provide support as well with implementing the right processes and controls of the quarterly VAT calculations.
The SAP add-on solution is scalable and all countries can be managed under one cockpit:
- SAF-T France
- SAF-T Lithuania (monthly VAT / on request)
- SAF-T Poland (monthly VAT / on request)
- SAF-T Norway (on request)
- VAT Smartform PDF in Poland
- SII - Immediate Supply of Information (SII) in Spain
- Quarterly informative reports for Italy
- Real time data access for Hungary (in development)
More detail also including an overview of the requirements for Lithuania, Norway and Poland and the challenges companies need to overcome when SAP is run can be found in attached slide deck.
Relevant background info for SAF-T
- Mandatory e-audit files
- A cost efficient way to submit SAF-T files and perform risk management
- SAP add-on for SAF-T Poland
- SAP and SAF-T PL
- SAF-T what is next ... Lithuania!
- A scalable SAP solution for countries implementing SAF-T
- Norway introduces SAF-T to improve tax inspections
- Strategic partner alliance
- Integrated SAP solution for SAF-T
Published by Richard Cornelisse
Richard advises multinational businesses in improving the efficiency and effectiveness of their Indirect Tax Function and Tax Control Framework.
He started his career as a manager at Arthur Andersen and then became a partner in EY where I led the indirect tax performance team for Netherlands and Belgium. Currently he is a senior managing director of Phenix Consulting.
Richard has over 20 years’ experience advising clients on international VAT issues. He is specialized in the tax aspects of financial transformations, shared service centre migration, and post merger integration work. Richard is also somewhat of a mentor, giving back to the profession. If you are interested in conversation and discussion, please feel free to contact him.