As the year 2020 begins, Norway faces legislative novelties regarding accounting and tax reporting. The Norwegian Ministry of Finance, following the recommendation of the OECD and in cooperation with the business community and tax administration, has decided that all accounting data in the standard SAF-T (Standard Audit File-Tax) format must be available to the tax authorities for possible control and upon request.
This new regulation has come into force on 1 January 2020.
To whom does the SAF-T reporting obligation apply?
In general, all businesses obliged to keep accounts in Norway must report to the tax authorities in the new SAF-T format.
Companies in Norway that are obliged to keep accounts are defined as follows:
- All legal entities that are engaged in business activities and are obliged to file tax returns for wealth tax, income tax, etc.
- All legal persons who are obliged to submit tax returns for VAT
- All legal persons whose accounts are kept electronically, even if they are small enterprises
Foreign investors should note that any subsidiaries of foreign companies are required to report in SAF-T format, por example, as soon as the company is registered for VAT in Norway.
Which accounting information and disclosures must be included in the SAF-T file?
Companies do not have to provide all accounting documents. The scope of the information to be provided in the SAF-T file has not yet been clearly defined yet. For information on general ledger, creditors and debtors, specific and detailed data are required by the tax authorities. In this regard, companies should consult a professional service provider. This is particularly relevant for companies that keep their accounting records in several accounting systems or in other software systems. The Norwegian tax authority refers directly to the Accounting Regulation, which specifies exactly which data from the general ledger, customer and supplier information should be included in the SAF-T report.
The following information is currently to be included in SAF-T Reporting:
- Information about the company (master data)
- Account details general ledger (detailed data required)
- Customer specification of accounts receivable (detailed data required)
- Supplier specification of accounts payable (detailed data required)
- The chart of accounts of the company with the representation of a standardized chart of accounts
- The VAT codes of the company with allocation to standardized VAT codes
Main challenges of the SAF-T implementation
Companies should carefully plan and consider the following challenges during the changeover. In first place, in order to analyze SAF-T data, the SAF-T file must be based on a standard chart of accounts and VAT codes in the general ledger. For practical purposes, this means that the company’s chart of accounts must be “mapped” to the standard chart of accounts.
The level of detail required for the general ledger, as well as customer and supplier specifications, can cause difficulties for companies, especially those that document their accounting in multiple accounting and software systems.
The accounting system used for customer or vendor specifications supports the extraction of the SAF-T Report. It is important to map and ensure the data to be reported so that SAF-T Reports can be extracted in XML-format.
There are legal industry exceptions, for example, for financial, insurance, telecommunications or tourism companies, to be individually considered on a case-by-case-basis.
The scope of the information to be reported will certainly be expanded, so that, for example, lists of fixed assets and invoice information will be included in the reporting. System suppliers will have to adapt their accounting systems to support the new standard for customers who have to prepare and submit their accounting information in SAF-T format.
As can be seen, the introduction of the SAF-T standard format may cause unforeseen problems and additional workload for many companies from 2020 onwards. Companies should therefore consult accounting service providers and tax advisors in good time to avoid unpleasant surprises in the event of audits or inquiries from the Norwegian tax authorities.
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