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Standard Audit File for Tax (SAF-T)

Izabela Karolak I 02/06/2016

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Agenda

03 Taxpayers' obligations

02 Entities obliged to report

01 The essence and purpose of the Standard Audit File for Tax

04 Hints and tips

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The essence and purpose of the Standard Audit File for Tax

The Act of 10 September amending the Polish Tax Act (Journal of Laws of 2015, item 1649) is

going to introduce the Standard Audit File for Tax (SAF-T) with effect from 01 July 2016.

This is a new standard for data exchange for books of account and accounting evidence in a

specified logical structure by electronic means or on electronic data storage devices.

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The essence and purpose of the Standard Audit File for Tax

The file consists of reporting structures in the XML format (OECD standard SAFT 2.0)

SAF-T

Books of accountRevenue records

WarehouseVAT invoices

VAT purchases and sales records

Bank statement

Revenue and expense ledger

0107

0206

05 03

04

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The essence and purpose of the Standard Audit File for Tax

Starting on 1 July 2016 documents can be delivered:

� in a traditional way

� in electronic form

� on electronic data storage devices

Standard Audit Files for Tax will be delivered through a software interface available on the

website indicated by the Ministry of Finance.

The data will be exchanged with a secure electronic signature verifiable by means of a valid

digital certificate.

The delivery of data will be evidenced by means of an official confirmation of receipt

(UPO form) which:

� is issued by the electronic submission box in the tax authorities' IT system

� after checking the logical structure, the correctness of data, the authenticity of the books and

the authorisation to sign the books

to ensure integrity of the submitted books and confirm the date of submission.

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The essence and purpose of the Standard Audit File for Tax

The electronic data storage devices on which the books may be saved and delivered should be:

� marked in a way ensuring accurate identification

� usable in all commonly available reading devices

� usable in the storage temperature of 18–22°C in relative humidity of 40–50%

The electronic data storage devices should allow accurate reading of data in device-specific

equipment manufactured by various suppliers.

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The essence and purpose of the Standard Audit File for Tax

The purpose of the Standard Audit File for Tax (SAF-T) is to:

1) reduce the tax compliance costs for taxpayers and taxpayers' business partners

2) reduce the tax administration costs

3) improve the audit effectiveness

4) facilitate data analysis by utilising electronic means and thus ensure smoother and more

accurate tax audits

5) avoid audits where there are no doubts

6) facilitate communication among taxpayers, tax remitters, tax collectors and the tax

administration.

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Entities obliged to report

Large enterprises Small enterprisesMedium-sized enterprises Micro enterprises

Note! Enterprises that belong to a specific category have to fulfil the obligations related to SAF-T from the date provided for the category. From 01 July 2018, SAF-T will apply to every enterprise keeping computerised tax ledgers

� which employed 250 or more staff members (on an annual average) in at least one of the last two financial years, or

� which achieved more than the PLN equivalent of EUR 50 million in the net annual revenue from sales of goods and services as well as financial transactions, and

� the total assets in the balance sheet as of the end of one of those financial years exceeded the PLN equivalent of EUR 43 million

� which employed less than 250 staff members (on an annual average) in at least one of the last two financial years, and

� which achieved less than the PLN equivalent of EUR 50 million in the net annual revenue from sales of goods and services as well as financial transactions, or

� the total assets in the balance sheet as of the end of one of those financial years did not exceed the PLN equivalent of EUR 43 million

million

� which employed less than 50 staff members (on an annual average) in at least one of the last two financial years, and

� which achieved less than the PLN equivalent of EUR 10 million in the net annual revenue from sales of goods and services as well as financial transactions, or

� the total assets in the balance sheet as of the end of one of those financial years did not exceed the PLN equivalent of EUR 10 million million

� which employed less than 10 staff members (on an annual average) in at least one of the last two financial years, and

� which achieved the PLN equivalent of EUR 2 million in the net annual revenue from sales of goods and services as well as financial transactions, or

� the total assets in the balance sheet as of the end of one of those financial years did not exceed the PLN equivalent of EUR 2 million

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Entities obliged to report

In identifying the enterprise size figures denominated in EUR should be converted into PLN

according to the average exchange rate of the National Bank of Poland as of the last day of the

financial year taken for the size determination.

The annual average workforce should be calculated in full-time equivalents.

Employees on maternity leave, paternity leave, parental leave and childcare leave, as well as

those hired for vocational training, should not be counted in the calculation of the annual

average workforce.

As regards the enterprises operating for less than a year, their expected net average revenue

from sales of goods and services, financial transactions, and the annual average workforce

should be estimated on the basis of figures available for the last documented period.

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Entities obliged to report

According to Article 29 of the amending act, small and medium-sized enterprises in the meaning

of the Freedom of Economic Activity Act may deliver the data in the Standard Audit File for Tax

in the period from 1 July 2016 to 30 June 2018 voluntarily.

It will become their obligation from 1 July 2018.

This means that the obligation to deliver data in the SAF-T format has been extended over time

as follows:

01 July 2016 – large enterprises (obligatorily)

01 July 2016 – 30 June 2018 – medium-sized, small and micro enterprises (voluntarily)

01 July 2018 – medium-sized, small and micro enterprises (obligatorily)

Taxpayers are waiting for clarifications from the Ministry of Finance as regards the transition

regulations applicable to taxpayers other than businesses, such as municipalities and/or

universities.

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Taxpayers' obligations

Taxpayers will be obliged to deliver data in the SAF-T format:

� on request – in the case of a preliminary tax inquiry, a tax audit and tax proceedings;

� without request – with respect to the VAT sales and purchases records only.

Pursuant to the act of 13 May 2016, which is awaiting the President's signature, legal persons,

organisational entities that do not have legal personality and natural persons that keep

computerised tax records are obliged to report without the tax authority's request the records

referred to in Article 109(3) of the Value Added Tax Act of 11 March 2004 (VAT records) by

electronic means in the SAF-T structure of "VAT sales and purchase records" for monthly

periods by the 25th day of the next month, indicating the month which the records refer

to.

The monthly reporting obligations apply as well to taxpayers who have chosen quarterly VAT

accounting.

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Taxpayers' obligations

Transitional regulations

The "VAT sales and purchase records" structure in the SAF-T format should be delivered for

the months following 01 July 2016 but this obligation does not apply to

� small and medium-sized enterprises in the meaning of the Freedom of Economic Activity Act

of 2 July 2004 (Journal of Laws of 2015, item 584, as amended) – in the months from 01

July 2016 to 31 December 2016

� micro enterprises in the meaning of the act referred to above – in the months from 1 July

2016 to 31 December 2017.

Large enterprises in the meaning of the Freedom of Economic Activity Act are obliged to

deliver from 01 July 2016:

� the "VAT sales and purchase records" structure every month without request

� every SAF-T structure on request of the tax authorities and tax inspection authorities

Failure to report the data will expose you to penal and fiscal liability.

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Hints and tips

To implement the SAF-T your company needs to take at least 3 steps:

SAF-T

2

13

Check your IT systems and identify the source of the data reportable in the SAF-T format

Modify the IT systems and generate the SAF-T

Check the SAF-T file for substance

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Hints and tips

As the SAF-T structures are very detailed, you should compare their content with the data in

your IT systems to identify the areas that require modifications.

In the course of implementation you should resolve the issue of data verification in the SAF-T

format because the file itself does not allow such verification after opening.

The SAF-T files, like all other accounting evidence, need to be archived.

The Ministry of Finance has announced that they are going to devise further structures (e.g. for

excise duty and cash register receipts) and modify the already published ones (e.g. warehouse).