Design and implement

Design and implement

Wednesday, June 29, 2016

Monthly SAF-T VAT file in Poland (JPK-VAT)


According to new regulation Large Enterprises are obliged to submit mandatory VAT SAF-T file in legal XML format for the first time on 25 August 2016. It is a monthly obligation even if the VAT reporting period itself is quarterly.

SAP and VAT SAF-T

I refer for complete overview to 'SAF-T for Poland and SAP'.

Most companies download the standard SAP VAT return reports from SAP to Excel and have an Excel working paper for review and adjustments. The data in the SAP reports are retrieved from various SAP tables.

The SAF-T VAT file need to reconcile with the submitted VAT return (monthly or quarterly). If this file does not reconcile to the submitted VAT return the risk that the PL tax authorities will ask questions - explain the differences - is high.

Our SAF-T VAT solution for Poland
  • First deadline to submit SAF-T file is August 25, 2016 (feasible)
  • Our solution ensures the completeness of the required data
  • Meets legal XML format
  • A control report exists that the total VAT amounts and data in the SAF-T VAT file reconcile
Read more

Monday, June 27, 2016

HMRC guidance: publish your tax strategy - June 24, 2016


Who needs to publish
If you’re a company, partnership, group or sub-group, you’ll need to publish a tax strategy if in your previous tax year you have either a:
  • turnover above £200 million 
  • balance sheet over £2 billion
For groups and sub-groups, it’s the combined totals of all the relevant bodies that you must use. This is separate to the 2014 Organisation for Economic Co-operation and Development’s (OECD’s) ‘Country-by-Country Reporting’ model (CBCR). A business not headed by a UK company not meeting the threshold in its own right may still qualify if they satisfy the OECD’s CBCR framework threshold of a global turnover of more than €750 million.

Who doesn’t need to publish
You don’t need to publish a tax strategy if you’re an:
  • open-ended investment company
  • investment trust

Responsibility
Your business is responsible for determining whether it meets the threshold and for publishing the tax strategy, unless it’s part of a group or sub-group. In these cases it’s the responsibly of the head of the group or sub-group. You can publish a strategy on behalf of a group or sub-group if your company is registered in the UK.

What to include in your strategy
Your tax strategy will explain your business’s tax arrangements. You don’t need to include amounts of tax paid or commercially sensitive information. If your group has a separate UK tax strategy you should publish the relevant parts.

Partnerships
HMRC wants to know how your partnership as a whole manages its tax affairs.

Multinational
If your business is part of a multinational group, you should publish any strategy, or parts, relevant to UK tax.

How you manage tax risks
You should work out and include what tax risks are linked to your business’s size, complexity and any changes to your business. Other information on governance arrangements to include:
  • details on how you manage your business’s tax risk
  • a high level description of key roles and their responsibilities
  • information on the systems and controls in place to manage tax risk
  • details on the levels of oversight of your business’s board and its involvement

Your attitude to tax planning
If your business has a code of conduct you should include details of it. You should also include:
  • why you might seek external tax advice, if any
  • an outline of your tax planning motives
  • the importance of each to your tax strategy
Where your business forms part of either a group or sub-group, you should include the group’s overall approach to structuring tax planning.

Your tax risks
You should say if your business’s internal governance has rigid levels of acceptable tax risk. If so, you should explain how it is influenced by stakeholders.

Working with HMRC
While your business’s approach to working with HMRC will be understood by your Customer Relations Manager (CRM), you’ll still need to put it in your tax strategy. You should include:
  • how your business meets its requirement to work with us
  • how you work with us on:
    • current, future and past tax risks
    • tax events
    • interpreting the law
You can include further information to add value, understanding or context. CRMs won’t give you any clearances in relation to publishing details of your dealings with us.

How to publish
You must make your tax strategy available free of charge on the internet as either a:
  • separate document
  • self-contained part of a wider document
You must make it available to the public free of charge until the following year’s strategy has been published. It doesn’t need to be called a strategy.

When to publish
Your first strategy should be published before the end of your first financial year commencing after Royal Assent of Finance (No. 2) Bill 2016. Your strategy counts as ‘published’ when it is first put on the internet. After the first strategy, you must publish one each year, within 15 months of the last one being published. Although you don’t have to notify HMRC when you’ve published, it would be helpful for HMRC to assess compliance if you let your CRM know when you have done so.

Penalties You can get a penalty if you haven’t published your tax strategy correctly and in time. You may also receive a penalty if your strategy doesn’t remain accessible free of charge until publication of the next strategy. HMRC will send you a warning notice giving you 30 days to either publish your strategy or make it available again (free of charge).
Any penalty will run from the first day you didn’t publish your strategy properly. The penalties are for:
  • the first 6 months - up to £7,500
  • 6 to 12 months - a further penalty of up to £7,500
  • more than 12 months - £7,500 every additional month
If your business is part of a group or sub-group the head will get the penalty.

Appeals
If you believe you shouldn’t have a penalty, you should speak with your CRM first. You can appeal any penalty.

HMRC - Large businesses: publish your tax strategy 
HMRC Guidance - historical background

Thursday, June 9, 2016

SAFT-T Demo - OECD


Detailed information about SAF-T compliance and planning


Detailed information about SAF-T compliance and planning


SAF-T Poland

From 1st July 2016 onwards it is required to provide SAFT-PL files in XML format on request of the PL Tax authorities.
Per 1st July 2018 this extended to taxpayers with more than 9 employees or 2 million EUR sales revenue. Foreign businesses not having a branch and/or fixed establishment but that are registered for VAT in Poland fall within the scope of the above reporting requirement when above conditions are met.

On 19 May 2016 the Upper Chamber of the Polish Parliament passed a bill on the amendment of provisions of the Tax Ordinance and of some other acts. According to the bill adopted by the Parliament, the obligation to generate VAT reports in a SAF-T data format and their monthly reporting to the tax authorities will apply initially only to the largest enterprises for each month begun on or after 1 July 2016.

According to new regulation It means that Large Enterprises will be obliged to file VAT reports in the SAF-T data format already on 25 August 2016. Thus, Large Enterprises will be obliged to submit in monthly period VAT register in SAF-T format (according to JPK_VAT structure 4 – VAT register) even if the VAT reporting period is quarterly.

Taxpayers will be obliged to submit the SAF-T format:
  • on request in the case of a preliminary tax inquiry, a tax audit and tax proceedings;
  • monthly mandatory – with respect to the VAT sales and purchases records only (Article 109(3) of the Value Added Tax Act of 11 March 2004 (VAT records) by submit monthly a SAF-T file that contains VAT sales and purchase records

The first requests to submit audit files at their discretion will likely take place September 2016.  The monthly VAT reports on 25 August 2016.

Not complying with this obligation will not only negatively affect the position of taxpayers during a tax audit but also result in unforeseen tax costs as penalties will be levied.


SAFT Poland and SAP


The generation of the SAFT-PL XML files is not included in the SAP Strategy at the moment. SAP is currently only developing an extraction tool for SAP ECC 6 and higher version. Certain companies use “older versions” of SAP and will not be supported by SAP.

Based on SAP's OSS notes, SAP provides only at the moment a functionality for gathering and downloading some transactional data. However, it is not the complete set of data required and the creation of the SAF-T file for the tax authorities is also not included.

The functionality will also only be available for companies established in Poland and not for companies with a foreign Polish VAT registration. In order to be able to comply with the requirements and provide the XML file on request in time, tooling needs either to be developed or purchased.


Our solution


A SAFT-PL tool that already works for Portugal that includes also strategy for downloading the relevant data from SAP  for older SAP versions.

The basic design for a workaround solution is to extract the raw source data from the relevant SAP tables and use software tools to load the relevant data from the source SAP tables, perform additional mappings and data preparations and create the required XML files.

We offer 2 solutions:

  • A software application called Audit Command Language (ACL). This software is commonly used by auditing firms, tax authorities and internal audit departments. The process will be that the client will download the data from SAP and make it available to the Phenix. Phenix will then generate the XML files and some control reports and provide these files and reports available to client for submission.
  • A tool in MS Access  in combination with a specific user interface for extracting the data from SAP. The result is a full in-house solution for the client.

Detailed information about SAF-T compliance and planning