SAF-T: A New Era for Accounting, Tax and VAT

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SAF-T: A New Era for Accounting, Tax and VAT

Standard Audit File for Tax (SAF-T) is a new electronic XML based reporting standard for tax, VAT and accounting in Norway. The Norwegian Tax Authorities have proposed that, as of 1 January 2017, entities subject to the Bookkeeping legislation in Norway will be obliged to submit the SAF-T in case of audits and controls by the Tax Authorities.

Scope

The proposed Norwegian SAF-T reporting standard (March 2016) is based on OECD’s XML based standard - SAF-T - and includes these elements:

  • All postings (General ledger, Customers, Suppliers and VAT)
  • Accounts Receivable (Balances, master data, etc.)
  • Accounts Payable (Balances, master data, etc.)

Additionally it is required to use standardized VAT codes and a standardized chart of accounts. Detailed invoice information, source documents, assets and inventories are planned to be included subsequent versions of SAF-T.

The Norwegian Tax Authorities will use the SAF-T file to perform controls and tax audits. Their long-term strategy for SAF-T is to replace other reporting activities, such as, VAT forms, tax filings etc.

SAF-T will only be requested for accounting periods starting after the implementation date (i.e. 1 January 2017).

Implementation status

A public consultation on the proposed new regulations was closed on 1 October 2016, and a conclusion is expected in November/ December. Considering the hearing responses and Deloitte’s dialogue with the tax authorities, we expect that the proposed implementation date will be delayed. A likely scenario is mandatory SAF-T filing from 1.1. 2018 and voluntary SAF-T filing from 1.1.2017.

We are not expecting any significant changes to the SAF-T structure or content.

Exemptions

Companies not required to perform bookkeeping in Norway:

Companies with 600 or less vouchers per year or less then NOK 5 millions in annual turnover and keep manual/ paper based accounts.

VOES (VAT on e-Services) companies.

Impact on your business

The introduction of SAF-T will affect how your business communicates with the Tax Authorities.

When performing tax audits, the Tax Authorities will be able to perform data analyses on an unprecedented level. An XML-based transmission of data allows the appliance of sophisticated and pre-defined controls for testing, thus increasing the probability of detecting misstatements. For instance, through these analyses the Tax Authorities could identify misstated VAT entries within a few minutes. 

Response:

We recommend that businesses immediately begin the process of:

  • Understanding to what extent your business is ready to file of accounting data to the Tax Authorities in the SAF-T format. Our experience is that companies with accounting data spread across several source systems (e.g. separate invoicing systems), customized CoAs, complex VAT treatment, and uncertainty about the quality of transactional and master data, will face the greatest challenges.
  • Determine necessary actions to ensure SAF-T compliance. Consider alternatives and design a project plan. The implementation project should consider the impact on your company’s processes, organization and systems.
  • Considering whether the current internal control are capable of identifying errors before submitting the SAF-T data to the Tax Authorities. SAF-T provides the Tax Authorities with access to significantly more the organization’s accounting information. Depending on the nature of your business, it could be relevant to introduce data analytics software.

Deloitte has experts specialized in SAF-T available to assist your organization with ensuring compliance. We also have developed a range of offerings designed to meet various clients’ complexity and needs.

What we can offer

SAF-T Readiness Quick Scan

What you get

A high-level understanding of the challenges to become SAF-T compliant in less complex or smaller organizations

The Deloitte Approach

A web based SAF-T assessment tool to quickly gain an understanding of your organization’s challenges. Our SAF-T experts will analyze the results and follow up in an online meeting to discuss the findings. You will also receive a high-level findings document.

Investment
  • Time spent on completing the questionnaire and participate in online meeting with Deloitte

SAF-T Readiness Review

What you get

An understanding of the challenges to become SAF-T compliant including potential actions and solutions.

The findings will be summarized in a report. The SAF-T Readiness Review focuses on potential systems, process, and organizational challenges.

The Deloitte Approach

Our approach consist of the following steps:

  • Review of documentation (e.g. systems architecture descriptions, VAT coding, etc.);
  • 1-4 workshops with key persons to identify and discuss potential challenges and solutions; and
  • The preparation of a report outlining the challenges and solutions.
Investment
  • Participation in 1-4 workshops.
  • ~ 30 – 200 hours depending on complexity and scope

SAF-T Reporting Services & taxCubeTM SAF-T

What you get

SAF-T compliance with Deloitte as a service provider

The Deloitte Approach

Deloitte, as an outsourced service provider, will prepare and report the SAF-T XML on behalf of your company.

Our dedicated team will use Deloitte’s proprietary taxCubeTM SAF-T to collect, combine, prepare and file the SAF-T XML. Deloitte also provides support to any SAF-T based audits and helps analyzing the SAF-T report.

Our customers may also license the taxCubeTM SAF-T for use by their internal operations teams. For a license fee, Deloitte will ensure that the solution maintained and compliant with the current SAF-T requirements.

Investment
  • Setup and integration
  • Service and user fees
Tax Cube
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