Tax compliance reports: post-audit and tax clearance

VAT compliance reports: post-audit and tax clearance

While the adoption of electronic invoices has become increasingly popular worldwide, regulations are rapidly evolving and not all countries have the same report models for VAT compliance. In general, businesses are required to disclose invoices, either after or during the transactions, and must archive all the data with authenticity, integrity, and legibility.

In this blog post we are presenting two global approaches: the post-audit model and the clearance model.

The post-audit model allows invoices to be exchanged directly between the seller and the buyer and there can be a requirement to report data using SAF-T or another specific format. In this case, the invoice data is transferred in a certain set of information defined by tax authorities, who can verify transactions after their completion. This solution was first implemented in Portugal and is currently used by most European countries, Canada and Australia. The audit usually happens after the reporting deadline periodically or by request.

In the clearance model, prior to the issue of each invoice, the seller must receive approval from the authorities and then charge the buyer. That means these three parties are involved in the process and each invoice is declared and verified previously. This communication with the tax authorities happens constantly and provides immediate approval of the invoice, which ensures greater reporting frequency and accuracy checks at the time of transaction. This system is already being used in some Latin American countries, Russia and China.

Both these models of e-invoicing turn fiscal documents into tax compliance reports and replace onerous procedures. SAFTPRO is a robust solution that not only simplifies the fulfillment of these obligations by businesses but also streamlines the control and management by tax authorities. It runs either in a tax clearing system, post-audit or both simultaneously, according to each country’s specifications and preference. Contact us for a demo!

a new way to process saf-t files

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