Standard Audit File for Tax Reporting in Romania

by Florin Gherghel, Tax Manager Ensight Finance

 

We mention SAF-T reporting obligations to be applicable as of January 1st, 2023 for middle-sized tax payers, classified as such as of 31 December 2021 (large taxpayers as of 31 December 2021 already submit SAF-T, whereas small taxpayers as of 31 December 2021 will submit SAF-T from 1 January 2025).

 

The Standard Audit File for Tax (SAF-T) is a new reporting obligation of the taxpayers, containing information on taxpayers’ accounting and tax data. The main role of the SAF-T is to standardize the recurrent transfer of information between tax authorities and taxpayers in order to reduce the time spent on tax inspections at companies’ premises. SAF-T involves the regular reporting of a set of information, in a predefined format, which facilitates the review by tax authorities of taxpayers’ operations.

 

The structure of SAF-T in Romania is very complex, containing over 390 mandatory tax and accounting items to be reported by taxpayers, including information on all customers, suppliers of the company, assets and stocks of the company, all purchase and sales invoices, all payments and receipts made by the company, all accounting entries made in connection with transactions carried out by the company, etc. Practically all financial and accounting information of the company will be submitted to the tax authorities.

 

Due to the complexity of the D406 return, the Romanian tax authorities offer taxpayers a grace period. This means that non-compliance with the obligations derived from the SAF-T i.e. non-filing or incomplete filing will not be penalized for the time being with fines. However, all SAF-T returns for the months January-June 2023 will have to be reported by the end of July 2023 at the latest. If the grace period passes and taxpayers required to file SAF-T have not filed SAF-T return at all or have submitted incomplete data, they will be fined as follows:

• fine from 1,000 lei to 5,000 lei in case of failure to submit this declaration within the legal deadlines, respectively
• a fine of 500 lei to 1,500 lei for submitting incorrect or incomplete declarations.

 

Thus, preparation for SAF-T is very important, as all accounting and tax information will have to be reported monthly/quarterly, annually or upon request.

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