SAF-T Background

The SAF-T standard, originally created by the OECD, is intended to give tax authorities easy access to the relevant data in an easily readable format. This leads to much more efficient and effective tax inspections.

The SAF-T standard, originally created by the OECD, is intended to give tax authorities easy access to the relevant data in an easily readable format. This leads to much more efficient and effective tax inspections.The OECD’s Committee on Fiscal Affairs (CFA) developed a set of guidance on business accounting system data requirements for tax audit purposes, and associated practical implementation issues for software developers.

The set of guidance was prepared by a task group consisting of representatives of national revenue authorities, the Business Applications Software Developers Association (BASDA), accounting bodies, and other interested parties.

The standard, originally created by the OECD, is intended to give tax auditors easy access to the relevant data in an easily readable format. This leads to much more efficient and effective tax inspections.

The aims of the guidance are to simplify tax compliance and tax audit requirements as they relate to information required for tax purposes from business and accounting systems.

This guidance should encourage voluntary compliance by businesses that will also add to profitability by encouraging better internal control procedures. The guidance should also help promote compliance with new legislation on accounting standards such as Sarbanes Oxley and IFRS (International Financial Reporting Standards).

The application of standards through software development also provides both public and private auditors with a reference point. The legal requirements of the file are in line with the obligation of using certified billing and logistic software that prevent changes on documents already issued.

Submit on mandatory basis billing data and logistic information on a monthly basis

The Standard Audit File for Tax Purposes (SAF-T) became obligatory for entities with head office or a permanent establishment liable to Corporate Income Tax in Portugal in 2008, with the objective of making tax inspection more efficient and reducing the effort. The latest development is the introduction of a new obligation in 2013: Taxpayers now have to submit billing data and logistic information on a monthly basis.

This is what causes problems for many companies: The amount of data is large, and the extraction too complicated for a monthly submission of SAF-T files.

SAF-T: a global trend

Besides Portugal similar obligations exist already in Austria, Canada France, (voluntary basis), Luxembourg and Singapore. In Belgium, Croatia, Finland, Germany, Lithuania, Malta, Spain, Slovak Republic, Slovenia, and UK discussions on SAF-T are already taking place. Countries like Sweden and Netherlands have their own e-audit file standard.

Somehow related to SAF-T is the new mandatory electronic Tax Balance sheet requirement in Germany. From January 1, 2014 it is mandatory to send Tax Balances electronically. See also our eBilanz-Cockpit for Germany: our integrated SAP solution.