As Hungary prepares for the introduction of the Standard Audit File-Tax (SAF-T), the national tax authority has launched a public discussion to collect feedback from the business community, software developers and tax advisors regarding SAF-T's data structure and documentation.
Preliminary documentation on the SAF-T public consultation is available here and comments can be filed until 1 July 2020.
Based on OECD standards and recommendations and already implemented in several places in Europe, SAF-T is an international standard for the electronic exchange of reliable accounting data between taxpayers and the tax authority. Specifically, SAF-T is an electronic file containing reliable tax-related data for a specific time period that is exported from a company’s accounting system according to a predefined structure and format.
As for its characteristics, a SAF-T file should be easily readable since its main purpose is to be used by a tax authority for the purposes of an audit.
In Hungary, application of the SAF-T system will likely be mandatory for large taxpayers, but extension of it to the SME sector above a certain threshold is still under discussion. The Hungarian Tax Authority, nevertheless, expects more efficient tax audits after SAF-T's final introduction given its ability to provide a better focus on large tax risks. For cases with smaller tax risks, SAF-T should allow audits to be closed more quickly.
In developing SAF-T for Hungary, the Hungarian Tax Authority elaborated the xml-based data structure and its related documentation based on the OECD's recommendations and an investigation of experience with SAF-T in other European jurisdictions.
The documentation now available for review and public discussion is a preliminary version. A pilot project involving taxpayers and tax advisors was launched on 2 December 2019. When concluded, an evaluation of this project will be used to work out a final version of the SAF-T standard file.
The website offers complete documentation in the Hungarian language. The available English version may not be up to date, but comments can be made in English. According to the Tax Authority, input from different stakeholders will contribute to the smooth introduction and efficient use of this new tool.
For more details on this initiative, its documentation and information on how to lodge a comment, contact your regular CMS source or contact local CMS experts.
Also see CMS's latest publication on tax planning in a digitalised world here.