SAF-T For Tax Compliance With Mobilexpense

What is SAF-T?

The OECD’s Committee on Fiscal Affairs first published the Standard Audit File for Tax guidance in May 2005, better known as SAF-T.

The SAF-T is an "international standard for electronic exchange of reliable accounting data from organisations to a national tax authority or external auditors".

The idea behind the standard is for:

• Companies and organisations to extract information from their accounting systems (invoices, payments, G/L journals and master files) and arrange it in a standardised format to be electronically transferred to the tax authorities.
• The tax authorities and auditors to easily be able to process the information and identify anomalies.

The syntax of the standard is based on XML, however no file format is imposed. Government authorities are recommended to use formats allowing automation “while minimising potential costs to all stakeholders when moving to new global open standards”. SAF-T files are created according to a set of accounting records in a common format that is easy to export, regardless of the software used to generate them.

While the OECD has published formal guidance on SAF-T, the implementation and enforcement of the standard is national. Each country can create its own SAF-T reporting methods, suited to its tax requirements.

Portugal first adopted SAF-T reporting in 2008, making it mandatory only in 2013. Countries such as France, Norway or even Lithuania only use a selection of the data identified in the standard. Poland uses customised SAF-T reporting. Romania was the latest country to adopt SAF-T in 2022.

SAF-T is increasingly adopted by European countries as a way to electronically file tax returns. As of July 2023, eight countries had introduced legislation enforcing SAF-T requirements (the six above plus Austria and Luxembourg).

What are the benefits of SAF-T?

To be compliant, companies operating in countries with SAF-T regulations must capture additional vendor information for each transaction and include that information in their reports and accounting files.

Benefits of SAF-T for companies and tax authorities include:

• Advanced file security
• Simplified procedures for collecting electronic tax data
• Standardised data is easily read, regardless of the issuing system
• Improved quality and availability of data for businesses
• Faster and more efficient auditing by tax authorities
• Better tax compliance, streamlined for companies operating in countries with different tax requirements
• Increased VAT recovery thanks to compliant expense recording
• Reduced admin costs for both authorities and businesses with easy to access, standardised data.

Mobilexpense and SAF-T compliance

By activating Mobilexpense's SAF-T feature, our customers can make vendor information mandatory on expenses. This allows you to capture and record the information you must share with the tax authorities in an automated and carefree manner.

There are three ways you can choose to use (or combine) to obtain vendor information:

• Manual input: the user enters the required information;
• Approved vendor list: the user selects a vendor from a list the company provides and updates;
• Online database: the user selects a vendor from an online, in-country database (e.g. Poland)
  • Few countries offer this service and it is not yet supported by our solution. We aim to include this service and expand it as more countries roll out vendor databases.

Mobilexpense integrates with your ERP, automatically feeding it all the expense data. The solution generates XML-formatted files that include the SAF-T information and are compliant with the structure required by the country or countries you operate in.

And our solution is globally compliant with the tax requirements of over 70 countries (mileage, VAT, allowances, exchange rates and more), making it easy for you to centralise operations from across multiple countries.

Towards standardisation in Europe

Europe is moving towards more standardised tax processes and making them paperless. SAF-T is just one of the shapes of this standardised digitalisation. In an increasingly digital world, certainly with the events of the past year, automating and digitalising your operations is a smart move towards future-proofing your business.