Standard Audit File for Tax

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March, 2016

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Agenda

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1. Standard Audit File for Tax – basic issues

2. What hides inside the SAF-T structures?

3. How to adjust to the new requirements?

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Standard Audit File for Tax– basic issues

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Standard Audit File for Tax– basic issues

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The goal of implementing SAF-T is to improve and extend the tax and treasuryaudit proces and to increase the effectiveness and better identification of key non-compliance areas in tax reporting.

SAF-T brought significant benefits to tax authorities in countries where it wasimplemented. The most important benefits are as follows:

• reduction of costs and duration of audit (ability to conduct audit remotely);• abnormalities specified on the whole sample – increased effectiveness;• ability to conduct audit of few taxes at once (eg. CIT-VAT comparision)

SAF-T works worldwide in two models:

• on demand• compulsory periodic data handling to the tax authorities

SAF-T is based on a file in .xml form (according to OECD SAF-T 2.0 standard).

Taxpayers will send file to Ministry of Finance Gateaway or on an external datastorage such as DVD or memory stick.

Why?

How?

i

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Standard Audit File for Tax– basic issues

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Duty of generating SAF-T will apply to:

From 1.07.2016 ≥ 250 or > 50 mln EUR and > 43 mln EUR

From 1.07.2018 ≥ 9 or > 2 mln EUR and > 2 mln EUR

Reporting will concern taxpayer’s tax books.

Term „tax books” shall mean: accounting books, revenue and expense ledger,records and registers which must be kept by taxpayers on the legal basis for the taxpurposes

SAF-T was introduced with amendment to tax ordinance – new art. 193a

Who?

Legal basis

What?

??

??

?

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Standard Audit File for Tax- What hides inside the SAF-Tstructures?

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Standard Audit File for Tax– structures

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On March 9, 2016 final version of SAF-T appeared on the Ministry of Finance website. The finalversion of SAF-T consists of 7 structures:

Structure 1 – Accounting books

Structure 2 – Bank statements

Structure 3 – Warehouses

Structure 4 – VAT evidence

Structure 5 – VAT invoices

Structure 6 – Tax revenue and expenseledger

Structure 7 – Record of revenue

Typesof SAF-Tsections

Headline,Subject1

Repeatable section containing dataconcerning system provider, period

for which the file is prepared, etc.

Substantivepositions

Positions concerning valuesfrom tax books and

accounting evidences.

Control sums

All files contain controlvalues which are calculated

as a number of records andone or two values of

sum characteristic foreach document

type.

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Standard Audit File for Tax– final vs. testing structures

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Ministry of Finance implemented some changes in final version of SAF-T structures incomparison to testing structures:

• remodelling of the entire ‘VAT registers (sales and purchases)‘ structure, presently thisstructure is a tabular representation of current VAT Return

• removal of selected items, e.g. SAF-T data source system information previously (fromHeader section) is no longer required

• introduction of new items, e.g. entirely new section related to inventory movement inWarehouse structure

• more detailed field definitions, e.g. introduction of fields ‘DataOd’ (DateFrom) and‘DataDo’ (DateTo) requiring exact start and end date of financial period for which datais being provided.

The final SAF-T structures were modified in order to enable more accuratedata reporting.

In comparison to testing version of SAF-T structures, there are much lesspositions that are obligatory.

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Standard Audit File for Tax– What do the structures contain?

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Number of:Accountingbooks

Bankstatements

Warehouses VAT registerVATinvoices

Fin

al

stru

ctu

res

SAF-T fields 76 34 85 74 92

Notrequired/optional fields

11 3 74 53 49

Tes

tst

ruct

ure

s SAF-T fields 60 32 68 52 82

Notrequired/optional fields

5 2 49 2 39

SAF-T structures in numbers:

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Accounting books structure includes information concerning:

• Trial balance

• Journal of general ledger

• General ledger and trial balance entries

Transactional data on single transaction level should beplaced in this file. Transactional data should agree withaccounts of the trial balance included in the file.

Doubts and questions concern such fields as:

• Agreegated data in General Ledger

• Having more than one general ledger

Standard Audit File for Tax– Accounting books structure

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Standard Audit File for Tax– Bank statements structutre

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This structure includes bank statements balancesalong with detailed records from taxpayer’s accounts.

Doubts and questions concern such fields as:

• One file per one bank account (IBAN)

• One file per accounts’ currency

• Technical/virtual accounts

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Standard Audit File for Tax– Warehouses structure

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Warehouses structure contains information concerning receipt,release, internal expenditure and internal movementtransactions.

The structure requires very detailed data in records.

Doubts:

• Data volume

• Accounting of transactions warehouse movements (frequency:daily / monthly)

• Reporting: materials warehouse, semi-finished productswarehouse or finished goods warehouse

• One file at a warehouse or all warehouses into one file?

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Standard Audit File for Tax– VAT evidence

VAT register structure reflect the samefields which are VAT-7 Return, it means thatthe structure contains informationregarding transactions included in VATregister.

Status mandatory of fields was changed - in thefinal version of the structures of most of the fieldsare not mandatory.

IMPORTANT: VAT Structure for a given periodshould be consistent with VAT-7 Return for thesame period

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Standard Audit File for Tax– VAT invoices structure

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This structure will be used to reporting informationconcerning invoices for a given period (invoices, correctinginvoices, advance payment invoices and other suchdocuments)

That structure contains of many fields and sections that arenot mandatory. Some of the VAT structure fields havevariable requirements which depend on other fields (eg. fieldsindicating the basis for tax exemption (P_19a, P_19b, P_19c)are mandatory just for the transactions released frompaying VAT)

IMPORTANT: VAT Structure for a given period should beconsistent with VAT-7 Return for the same period

Doubts:

• Invoices regarding sales and purchases

• Detailed entries per line

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Standard Audit File for Tax- How to adjust to the newrequirements?

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Standard Audit File for Tax- How to adjust to the new requirements?

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IT systemsidentification

Making list ofsystems and

data

Mapping Saf-T testing

• Make a list of systemsand assign SAF-T datato them.

• Test data in regard totheir completeness andsubstantive correctnesson ready SAF-T.

• Identify systems inregard to data contentfrom the perspective ofindividual structures.

• Build SAF-T reportingconcept.

• Decide if you willmodify system/systemsor use external solution.

• Prepare SAF-T fields tosystem data mapping.

• Idenitify reports /extracts which can beused to acquirerequired data.

GeneratingSAF-T

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Thank You

© 2016 PwC Polska Sp. z o.o.