SAF-T declaration: understanding what it is and what are its main challenges

Since January 2022, businesses in Romania have been required to submit a new type of report to ANAF, the SAF-T Declaration (406). This report goes beyond just tax data, also covering accounting details and management information, giving authorities a clearer picture of a company's financial activity.

SAF-T stands for Standard Audit File for Tax, an international standard designed to streamline the electronic exchange of financial data between businesses and tax authorities. Its main goal is to give ANAF better visibility into business operations while making tax audits more efficient, accurate, and data driven.

What does the SAF-T declaration include?

There are three types of SAF-T declarations:

• Monthly or quarterly SAF-T declaration (depending on the taxpayer's reporting period)
• Annual SAF-T declaration
• On-demand SAF-T declaration

Monthly SAF-T Declaration

The monthly/quarterly SAF-T declaration includes the following financial and tax-related data:

• Analytical trial balance
• Balance detailing client and supplier accounts
• General ledger records
• Sales invoices list, with line-item details
• Purchase invoices list, with line-item details
• Payments, collections, and compensations report
• List of applicable tax codes
• List of stored products
• List of measurement units used
• List of cost/profit centers used

Annual SAF-T declaration

The annual SAF-T declaration includes key financial data related to a company's assets, providing authorities with a clear overview of long-term investments and structural changes. The report contains:

• Company asset records – a detailed overview of the company's fixed assets
• Asset movement details – transaction-level information on asset acquisitions, transfers, and disposals

On-demand SAF-T declaration

The on-demand SAF-T declaration provides detailed stock and inventory data requested by tax authorities. This report includes:

• Company stock records – overview of available stock or inventory held on behalf of third parties
• Stock movement details – transaction-level information on stock inflows and outflows
• List of stock movement types – categorization of different stock transactions
• List of stock owners – for inventory held on behalf of third parties

What are the main challenges of the SAF-T declaration?

SAF-T reporting is currently the most complex tax reporting requirement for businesses. Unlike other tax declarations, SAF-T cannot be manually prepared by taxpayers, it must be generated using specialized technical solutions tailored to the company's structure and reporting needs.

Based on Latitude App's experience in implementing SAF-T projects, we have identified three major challenges that businesses face due to the high complexity of this reporting process:

1. Understanding what needs to be reported – many businesses struggle with interpreting SAF-T requirements. We recommend that companies carefully review ANAF's SAF-T documentation, which is quite detailed and complex, to ensure proper compliance.
2. Mapping company data to the SAF-T standard format – implementing SAF-T is often a challenge for finance departments, as they must allocate significant resources to structure their financial data according to SAF-T's standardized format.
3. Verifying the final declaration before submission – many SAF-T generation tools do not provide a way to view the declaration in Excel or CSV format, making it difficult to verify the XML file before submission. This lack of accessibility adds an extra layer of complexity to the process.

Proper preparation and the use of reliable technical solutions can help businesses overcome these challenges and ensure accurate, compliant, and efficient SAF-T reporting.

Simplifying SAF-T verification with Latitude App

Through our work with companies implementing SAF-T, we have seen first hand how challenging it is for finance departments to manage this process. While they may successfully generate the SAF-T declaration using the required technical solutions, many lack the proper tools to review, validate, and confidently sign off on the report before submitting it to ANAF.

That's why we developed Latitude App – a solution that allows businesses to convert and read the SAF-T declaration in an Excel format, making it easy to review and verify data before submission. With this familiar and user-friendly format, taxpayers can perform all necessary checks and ensure compliance, reducing errors and simplifying the entire SAF-T reporting process.