Romania’s tax authority, National Agency of Fiscal Administration (NAFA), is to introduce the Standard Audit File for Tax (SAF-T) VAT transactional reporting by the end of 2020.
The overall objective of the project is to strengthen NAFA’s ability to support modernization initiatives, by introducing electronic public services that optimize business-oriented decision-making processes, including by implementing an international standard audit file for all economic operators.
Romania is planning to make the transactional data exchange regime mandatory for all VAT registered businesses – resident and non-resident. It is likely though to start a pilot with large taxpayers first, possibly at the start of 2020. In the mid-term, NAFA wishes to reduce the number of VAT-related returns on the basis of improved information from SAF-T.
SAF-T was developed by the OECD in 2005 as a standard schema for the exchange of transaction data for VAT and other tax reporting purposes. The aim was to have a harmonized data exchange format internationally to help companies efficiently exchange information with the tax authorities. It has been adopted in seven European countries, including: Portugal; Austria; Luxembourg; France; Poland; Lithuania; and Norway. Hungary is looking to be the eighth country in two years’ time. Poland has already announced plans to drop the requirement for VAT returns, replacing it with SAF-T submissions.
Ionut is the Managing Partner and the founder of Tax Representation. He is a Fulbright scholar, holding a B.A. Finance, a JD and a MS in International Tax at Bentley University. Ionut has 20 years of experience in Romanian and international tax with a focus on foreign investments into Romania, tax controversy and litigation, M&A and international tax structuring.