SAF-T comes into force in Norway starting from the 1 of January 2020. Norway's tax blog will keep you updated on SAF-T through a series of blog posts. In this blog post, we will elaborate further on which accounting data that shall be included in the SAF-T report.
As of 1st of January 2020, all businesses that are obliged to keep books in Norway are required to report in the SAF-T format to the tax authorities. We have in a previous blog written about which entities that is covered by the SAF-T reporting requirements, you can read the blog here.
Which accounting documentation shall be included in the SAF-T file?
The obligation to file the SAF-T file applies for all businesses required to keep books in Norway. This does not require the companies to provide all accounting material. On a general basis, the following information shall be included in the SAF-T reporting:
- Information about the company (master data)
- Account specification (general ledger)
- customer specification (accounts receivable)
- supplier specification (accounts payable)
- The company's chart of accounts with mapping to a standardised chart of accounts
- The company's VAT codes with mapping to standardised VAT codes
In the next couple of years, we expect that the scope of the information that shall be reported will be extended, so that for example fixed asset registers and invoice information will be included in the reporting.
In order to analyse the SAF-T data, it is required that the SAF-T file is based on a standard chart of accounts and VAT codes in the general ledger. For practical purposes, this implies that the company's chart of accounts needs to be “mapped” to the standard chart of accounts.
The level of details required for the general ledger, and the customer and supplier specifications
The level of details that shall be reported in the SAF-T file is not clearly specified by the Directorate of Tax. We experience that the question is especially relevant for companies that have their accounting documentation in several accounting systems or other software systems, for example where the number of sales is transferred in lump sums from the account specification in one system to the general ledger in another system.
In relation to this, the Directorate of Tax refers directly to the Bookkeeping Regulation that regulates the level of detail for the three specifications that shall be included in the SAF-T report (GL, customer and supplier specification). The SAF-T report shall as such be detailed in accordance with the criteria set out in the Regulation:
- Account specification. All accounts per period, with the account code and account name being specified in respect of each account, and with all entries being presented in the appropriate order with documentation date and documentation reference, other relevant processing codes, as well as opening and closing balances. Input and output Value Added Tax shall also be capable of being specified per transaction.
- Customer specification. All transactions with customers per period, with specification of the customer’s code and name, and with all entries being presented in the appropriate order with documentation date and documentation reference, as well as opening and closing balance.
- Supplier specification. All transactions with suppliers per period, with specification of the supplier’s code, name and enterprise registration number, and with all entries being presented in the appropriate order with documentation date and documentation reference, as well as opening and closing balance.
The requirements set out in the Regulation implies that it will not be sufficient to report the customer / supplier specification(s) in aggregated “lump sums”, e.g. from an accounting system to the general ledger.
Our experience with assisting with SAF-T compliance and conversion is that it is exactly these requirements for level of detail that is creating challenges for companies. For companies with bookkeeping documentation in several systems, this may create difficulties with regards to:
- Mapping of data that shall be included in the report that is stored in several accounting or software systems
- To identify a link between data available in the ledger and the level of detail located in the customer / supplier system
- Large amounts of data distributed over several systems
- The accounting system used for customer or supplier specifications does not support extraction of SAF-T reports
When facing such challenges, it is important to map the data that shall be reported and ensure that the SAF-T report (s) can be extracted in the xml format.
Statutory industry exemptions for finance and insurance companies
For insurance- and finance companies, there are certain exemptions in the Bookkeeping Regulation concerning the level of detail requirements for the customer- and supplier specifications. The exemptions also apply when such companies shall create and submit a SAF-T report. Upon request, the tax authorities have stated that for such businesses, it will be sufficient with lump sums when transferring the transaction data from financial software systems concerning the customer and supplier specifications.
The tax authorities have stated that it is sufficient that these systems can produce documentation about the customer and supplier specifications upon request, i.e. not necessarily in the SAF-T format. The simplification in the Bookkeeping Regulation for finance and insurance companies is mainly based on the fact that these are industries with a large number of individual transactions to consumers and that they use several, various systems.
Our experience is that several industries, e.g. telecom and travel/tourism industry, that also have considerable amounts of single consumer transactions, all the while these industries does not have similar exemptions. We also see that several industries also use software systems that are built for other purposes than standardised accounting reporting. This may entail an unforeseen workload for many companies with the introduction of SAF-T from 2020.
Mitt navn er Silje Guttormsen og siden 2016 har jeg jobbet med merverdiavgift i Advokatfirmaet PwC. Til daglig arbeider jeg med merverdiavgiftsrettslige forhold generelt, og bistår både nasjonale og internasjonale selskaper med salg av varer og tjenester i Norge og utlandet. Gjennom bloggen håper jeg å kunne bidra med gode og nyttige tips og råd, og å spre kunnskap om merverdiavgift. Ta gjerne kontakt om det er temaer du ønsker vi skal blogge om eller om du har spørsmål eller ønsker å slå av en prat.
My name is Silje Guttormsen and I work as an associate lawyer at PwC Tax and Legal Services. Through my work at PwC, I assist both Norwegian and international companies with VAT advice on Norwegian and international queries, supply of goods and services in Norway and abroad, merger and acquisition and efficiency improvement from a VAT compliance perspective. I hope to contribute with helpful tips and advice concerning VAT. Reach out if there are any topics you would like us to write about, or if you have any questions or just want to have a chat.