What Global Organizations Running SAP Systems Need to Know About SAF-T Reporting

This blog is a summary of information provided by the TJC Group In an increasingly global business environment, most multi-national enterprises have one or more subsidiaries operating in the European Union or one of the 35 countries that belong to the Organisation for Economic Co-operation and Development (OECD). Standard Audit File -Tax (SAF-T) is a standardized tax reporting format that is recommended by the OECD and is rapidly being adopted by its member countries. This blog explains a bit about SAF-T reporting and talks about the need for multi-national enterprises to have an efficient process for producing these compulsory government tax reports using a standardized software solution for SAP systems. .

What is SAF-T?

The Standard Audit File -Tax (SAF-T) report is an OECD-recommended electronic accounting file to use for tax audit. Download our country-specific solution sheets to learn more about how to comply with SAF-T Tax Requirements in these EU countries. This standard is now mandatory in the following countries:
  • France
As country tax administrations continue to apply pressure on corporations for better accounts transparency and internal control procedures, they are quickly following and/or adopting the SAF-T standards. The OECD, which is an intergovernmental economic organization comprised of 35 countries, developed the standard for tax compliance reporting and released the latest guidance notes in 2010. This is standard is part of a larger OECD initiative to eliminate Base Erosion and Profit Shifting (BEPS) or transfer pricing. In plain language this unified standard provides a way for auditors to “compare apples to apples”, and look at the same tax data for any country that uses the standard. However, it is important to note that each country that decides to impose the SAF-T reporting requirement has the ability to create a country-specific version of SAF-T reporting for their  particular tax needs. Some countries, such as Portugal, use the complete SAF-T report. Others such as France use only a sub-set of the data required by SAF-T. Still other countries such as Poland require a customized version of SAF-T reporting with additional information. So even though SAF-T is a reporting standard from the OECD there is still a LOT of variation in how those reports are generated in each country.

How Does SAF-T Reporting Work in SAP Systems?

SAP provides built-in capabilities to support SAF-T reporting. Take Poland for example. Users have the “means to extract relevant transactional data into Extraction tables” but they do not have the ability to deliver the five JPK (SAF-T Poland or JPK: Jednolity Plik Kontrolny) structures themselves nor produce the XML report directly from within SAP systems. Details on this format can be found on the SAP JPK FAQ document available from the SAP website. A similar limited functionality had been built-in by SAP for companies to address their SAF-T Portugal reporting requirement. Most of these companies have experienced extensive time and resource cost to both their IT and Audit teams before successfully obtaining a workable data set to generate their mandatory report. This means that to complete the reporting the company will still need to do a lot of work:
  1. Ask an external auditor to validate the data,
  2. Make some changes to ensure it ties back to the results of their filed tax reports,
  3. Store the data into the extract tables,
  4. Generate the XML report for submission.
In light of the short timeframe required to produce the JPK report in Poland, companies need a more robust, automated reporting solution.

Why SAF-T Workspace?

TJC started developing the SAF-T workspace solution back in 2010 when the OECD introduced the latest version of the SAF-T reporting standard (SAF-T Schema v2.0). In working with many multi-national enterprises on our other archiving and audit solutions, we have always worked upon the principle of creating a complete solution that would make life easier for these companies to meet these requirements. Our development partnership with one of the Big4 audit firms, gives us access to timely information on any upcoming country requirements for SAF-T report and provides the tax and audit competence needed to validate the SAF-T schema mapping to the SAP tables for our solution. Our customers choose the SAF-T workspace solution because it:
  1. Lessens the number of steps needed to generate an audit-ready XML report with a pre-validated mapping of the SAP tables to the SAF-T schema for a specific country
  2. Extract large data volume from any source type and into any output format (note: XML is the official OECD format but it works poorly as a working format for preparation and auditing step, so we offer several additional formats.)
  3. Provides autonomy for your auditors to extract the data and prepare for the report submission within your security parameters
  4. Is SAP certified ABAP Add-On that gives you the stability of a plug-in and the benefits of an ongoing maintenance of the software
  5. Saves time and resources for your IT team by setting up a single solution for all country SAF-T reports.
Using a commercial off the shelf software solution such as SAF-T workspace is more advantageous than building a custom solution as it can: work for all SAF-T country requirements, stay current with changing legislation, reduce the training and support requirements.

How Do I Get Started with SAF-T Reporting?

Having had numerous conversations with different customers on SAF-T solutions and their issues. Here are four tips for getting started with SAF-T reporting:
  1. For better resource planning and budgeting include SAF-T report submission requirements into your business and IT strategy.
  2. To work closely with your auditors to ensure the SAF-T reports submitted can be reconciled to the results of the tax reports filed within the required timeframe.
  3. Use a solution such as SAF-T workspace to help reduce the time, effort and expense of SAF-T reporting. Using a commercial off the shelf software solution is more advantageous than a custom-built solution as it can: work for all SAF-T country requirements, stay current with changing legislation, reduce the training and support requirements.
  4. For easier tax audit reconciliation and longer term data access: implement fiscal archiving using a consistent formula.

Want to learn more?

Dolphin is the exclusive reseller of the TJC Group in North America. Contact us for more information or see the following resources:

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What Global Organizations Running SAP Systems Need to Know About SAF-T Reporting

This blog is a summary of information provided by the TJC Group

In an increasingly global business environment, most multi-national enterprises have one or more subsidiaries operating in the European Union or one of the 35 countries that belong to the Organisation for Economic Co-operation and Development (OECD).

Standard Audit File -Tax (SAF-T) is a standardized tax reporting format that is recommended by the OECD and is rapidly being adopted by its member countries.

This blog explains a bit about SAF-T reporting and talks about the need for multi-national enterprises to have an efficient process for producing these compulsory government tax reports using a standardized software solution for SAP systems. .

What is SAF-T?

The Standard Audit File -Tax (SAF-T) report is an OECD-recommended electronic accounting file to use for tax audit. Download our country-specific solution sheets to learn more about how to comply with SAF-T Tax Requirements in these EU countries. This standard is now mandatory in the following countries:

  • France

As country tax administrations continue to apply pressure on corporations for better accounts transparency and internal control procedures, they are quickly following and/or adopting the SAF-T standards. The OECD, which is an intergovernmental economic organization comprised of 35 countries, developed the standard for tax compliance reporting and released the latest guidance notes in 2010. This is standard is part of a larger OECD initiative to eliminate Base Erosion and Profit Shifting (BEPS) or transfer pricing.

In plain language this unified standard provides a way for auditors to “compare apples to apples”, and look at the same tax data for any country that uses the standard.

However, it is important to note that each country that decides to impose the SAF-T reporting requirement has the ability to create a country-specific version of SAF-T reporting for their  particular tax needs. Some countries, such as Portugal, use the complete SAF-T report. Others such as France use only a sub-set of the data required by SAF-T. Still other countries such as Poland require a customized version of SAF-T reporting with additional information.

So even though SAF-T is a reporting standard from the OECD there is still a LOT of variation in how those reports are generated in each country.

How Does SAF-T Reporting Work in SAP Systems?

SAP provides built-in capabilities to support SAF-T reporting. Take Poland for example. Users have the “means to extract relevant transactional data into Extraction tables” but they do not have the ability to deliver the five JPK (SAF-T Poland or JPK: Jednolity Plik Kontrolny) structures themselves nor produce the XML report directly from within SAP systems. Details on this format can be found on the SAP JPK FAQ document available from the SAP website.

A similar limited functionality had been built-in by SAP for companies to address their SAF-T Portugal reporting requirement. Most of these companies have experienced extensive time and resource cost to both their IT and Audit teams before successfully obtaining a workable data set to generate their mandatory report.

This means that to complete the reporting the company will still need to do a lot of work:

  1. Ask an external auditor to validate the data,
  2. Make some changes to ensure it ties back to the results of their filed tax reports,
  3. Store the data into the extract tables,
  4. Generate the XML report for submission.

In light of the short timeframe required to produce the JPK report in Poland, companies need a more robust, automated reporting solution.

Why SAF-T Workspace?

TJC started developing the SAF-T workspace solution back in 2010 when the OECD introduced the latest version of the SAF-T reporting standard (SAF-T Schema v2.0). In working with many multi-national enterprises on our other archiving and audit solutions, we have always worked upon the principle of creating a complete solution that would make life easier for these companies to meet these requirements. Our development partnership with one of the Big4 audit firms, gives us access to timely information on any upcoming country requirements for SAF-T report and provides the tax and audit competence needed to validate the SAF-T schema mapping to the SAP tables for our solution.

Our customers choose the SAF-T workspace solution because it:

  1. Lessens the number of steps needed to generate an audit-ready XML report with a pre-validated mapping of the SAP tables to the SAF-T schema for a specific country
  2. Extract large data volume from any source type and into any output format (note: XML is the official OECD format but it works poorly as a working format for preparation and auditing step, so we offer several additional formats.)
  3. Provides autonomy for your auditors to extract the data and prepare for the report submission within your security parameters
  4. Is SAP certified ABAP Add-On that gives you the stability of a plug-in and the benefits of an ongoing maintenance of the software
  5. Saves time and resources for your IT team by setting up a single solution for all country SAF-T reports.

Using a commercial off the shelf software solution such as SAF-T workspace is more advantageous than building a custom solution as it can: work for all SAF-T country requirements, stay current with changing legislation, reduce the training and support requirements.

How Do I Get Started with SAF-T Reporting?

Having had numerous conversations with different customers on SAF-T solutions and their issues. Here are four tips for getting started with SAF-T reporting:

  1. For better resource planning and budgeting include SAF-T report submission requirements into your business and IT strategy.
  2. To work closely with your auditors to ensure the SAF-T reports submitted can be reconciled to the results of the tax reports filed within the required timeframe.
  3. Use a solution such as SAF-T workspace to help reduce the time, effort and expense of SAF-T reporting. Using a commercial off the shelf software solution is more advantageous than a custom-built solution as it can: work for all SAF-T country requirements, stay current with changing legislation, reduce the training and support requirements.
  4. For easier tax audit reconciliation and longer term data access: implement fiscal archiving using a consistent formula.

Want to learn more?

Dolphin is the exclusive reseller of the TJC Group in North America. Contact us for more information or see the following resources: