The complexity and high implementation cost of SAF-T reporting. A major challenge for small businesses

As of 1 January 2025, SAF-T (Standard Audit File for Tax) reporting also becomes mandatory for small taxpayers in Romania, generating significant challenges in terms of the complexity of the process, the necessary human resources and high cost of implementation. Consequently, many small companies, especially those with low levels of business activity, are contemplating suspending or even ceasing their activity altogether, according to the experts at TPA ROMANIA, a leading company in Central and Eastern Europe specialised in accounting, tax services, auditing and legal consultancy.

The impact on small businesses

“The small businesses for which SAF-T reporting (Informative Statement D406) became mandatory this year are yet to fully appreciate the extent of this reporting process, and don’t know what it involves or what they need to do in order to comply with the requirements imposed by the tax authorities. Judging by what I’ve seen in practice, there are some small taxpayers who are considering suspending their businesses for a period of time to see what happens in terms of fiscal reporting and taxation, and in terms of the economy in general. I believe many small companies, especially those that don’t have a lot of activity, will either close or choose to suspend their businesses, given that, once they have suspended their company through the Trade Register, which can be done for a maximum of three years, they will no longer need to file tax declarations, including SAF-T reporting,” explains Sorana Cernea, Managing Partner at TPA Romania.

What is SAF-T reporting?

SAF-T is an international standard for the electronic exchange of accounting and fiscal data between taxpayers and the tax authorities. Established by the OECD in 2005, the system has been implemented in a number of European countries.

“Romania is one of the countries to have implemented this highly complex reporting standard, which is in use internationally. Romania chose to make a lot of the information in the standard mandatory, with a high level of detail required, even higher than in Poland, which is known for its complex tax legislation. Other countries to have implemented SAF-T reporting include Portugal, Luxemburg, Poland, Austria, France and Norway,” says Alexandru Pop, Tax Manager at TPA Romania.

The staged implementation of SAF-T in Romania

The process was implemented in stages: large taxpayers began SAF-T reporting in 2022, medium-sized companies in 2023, and, as of 2025, the reporting obligation also applies to small taxpayers, including microenterprises, associations and non-profit foundations, and owners’ associations which practice double-entry bookkeeping.

In addition, from 2025, non-resident taxpayers registered in Romana for VAT purposes are also obliged to file SAF-T reports, albeit in a simplified format.

Certified natural persons (PFA) and entities who practice double-entry bookkeeping are not obliged to file this declaration.

“The law mentions only a few professional categories which do not need to file SAF-T reports. What will happen with the other liberal professions – certified accountants, tax consultants, financial auditors, architects and translators? If they practice single-entry bookkeeping then they won’t need to submit an SAF-T report, but otherwise the law does not specify what will happen with them, so the regulation needs to be amended accordingly,” specifies Sorana Cernea.

The technical and financial challenges posed by SAF-T reporting

According to the specialists at TPA Romania, even large and medium-sized companies are facing problems meeting the reporting requirement.

“These companies use computer programs that require a serious financial investment, meaning it takes a long time to update the software and numerous implementation teams. There are still companies who are not fully up to date with their declarations, because initially, before they had updated their software, they were having to do a lot of manual processing, and so it was difficult to file all their statements retroactively. The upside is that ANAF has not yet issued any fines and has shown understanding, and will probably also show understanding towards small businesses during the course of 2025. Moreover, there is to be a six-month grace period, meaning that reports relating to the first half of the year can be filed as late as the end of July 2025, without fear of receiving a fine,” explains Sorana Cernea.

Reporting obligations

• Deadlines: the SAF-T declaration must be filed monthly by VAT payers with the monthly VAT reporting period. Other taxpayers, including those who do not pay VAT, must file their reports quarterly. SAF-T Assets reporting is to be performed annually (by the same submission deadline as for annual financial statements), whereas reporting on stocks need only be performed upon request by the ANAF (and with a submission deadline that cannot be less than 30 days)
• Requested data: each report will include detailed information about transactions, fixed assets and stocks, meaning that companies must have at their disposal computer programs capable of managing and integrating these data

Retailers which manage stocks using the global-value method will not be obliged to include in their reports details about quantities and unit prices. That fact that a company only keeps a record of values in its accounting software and quantity values in its management software does not mean that the SAF-T report should only contain stock-related value data. In this case, the taxpayer will be obliged to include data pertaining to quantities and unit prices in its declaration, which may prove very difficult and require the development of additional software.

The benefits and downsides of SAF-T reporting

The business environment is not currently seeing any benefits from SAF-T reporting, only downsides. Although SAF-T reporting may contribute to reducing the duration of tax inspections and VAT reimbursements, these benefits are yet to be felt in the business environment because the tax authorities do not have the necessary framework to process the large volume of data taxpayers are submitting to them via these declarations.

“This does not mean that the tax authorities are entirely unable to verify the declared data, only that they are not able to perform these highly detailed risk analyses in an automated way. As soon as they are capable of performing these analyses, most likely in one or two years, they will quickly verify everything, including the data submitted for previous years. What’s more, they will cross-check the data declared in SAF-T reports with those declared through the e-VAT and e-Invoice systems and other tax declarations, and it will soon become clear if there are any discrepancies. So, for example, you will be able to spot slight discrepancies between declared stock purchases and what the supplier declared as having been sold, and not just in terms of value, but also at the level of invoice lines,” explains Sorana Cernea.

Practical difficulties encountered by taxpayers

• Fragmented IT systems: many companies use different accounting programs, which complicates the integration of data required for SAF-T reporting
• High costs: implementation requires significant investment, especially for accountants who do not use standardised software solutions
• Lack of specialist staff: employees require training to understand the reporting requirements and to ensure compliance with the regulations
• Limited support from the ANAF: in practice, the guides and technical documentation provided by the authorities do not cover all the scenarios encountered by companies, thus generating uncertainty and difficulties with implementation

How can companies get themselves ready for SAF-T reporting?

The experts at TPA Romania recommend taxpayers follow a few essential steps to make sure they are able to meet the new requirements:

1. Evaluation of IT systems: this involves an evaluation of existing accounting and management software in order to asses the need for new software solutions or to update of existing programs
2. Correct configuration of data: this involves the mapping of accounting data in keeping with the SAF-T nomenclature
3. Testing the declaration: it is recommended that the SAF-T file be verified by converting the XML file generated by the computer software into an XLS file and that the official ANAF tests, as well as other, supplementary tests, be run in order to ensure the accuracy of the reports

“We identified a series of challenges associated with the implementation of SAF-T reporting: it requires a mixed team of specialists from the fields of tax, accounting and IT; the information contained in the support documentation provided by the ANAF is not always sufficient to ensure the completion and validation of the D406 Statement; there are discrepancies in the support documentation provided by the ANAF for the implementation of the D406 Statement; certain situations encountered by companies are not covered sufficiently, such as those related to accounting policy and methods. Similarly, a valid file does not necessarily mean a correct file, and the intial declarations submitted prior to the annual financial statements may suffer changes in the light of adjustments suggested by auditors. The ANAF tests appear to be becoming increasingly complex, some are not designed correctly, requiring a significant effort on behalf of the taxpayers in terms of resolving issues identified by the authorities,” explains Sorana Cernea.

Fines for non-compliance

Failure to meet the SAF-T reporting obligations may result in the following fines:

• Between 1,000 and 5,000 lei for failure to file a D406 Statement on time
• Between 500 and 1,500 lei in the event of an incorrect or incomplete declaration

No fines will be levied where an incorrect declaration is corrected before the next reporting deadline or is corrected as a result of actions that cannot be attributed to the taxable person.

Conclusion

The implementation of SAF-T reporting represents an important step forwards in the digitalisation of tax administration in Romania, but it also throws up significant challenges for small taxpayers. In order to avoid difficulties and fines, it is essential that firms prepare ahead of time, seeking specialist advice and technological solutions to help them meet the new requirements.