Richard Cornelisse

Mandatory electronic audit file for tax purposes a worldwide trend

In Indirect Tax Strategic Plan on 13/12/2014 at 1:35 pm

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 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.

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.

The more efficient use of technology lowers costs of collection and compliance. More and more tax administrations around the world are implementing electronic auditing of a business’s financial records and systems.

Countries are adopting tools that can interrogate such records on the basis that they must support the standard audit file for tax (SAF-T) methodology. Singapore is encouraging businesses to adopt the SAF-T standards.

Portugal requires large companies to use SAF-T, and Brazil, notably, can require a business to hand over all its electronic financial records for scrutiny. From: 6 May 2014 EY: Five indirect tax trends: increasing cooperation

Read more: Mandatory electronic audit files a worldwide trend.

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