SAF-T in Bulgaria | What's in store and why is it important to be prepared?
Ecovis | 25 February 2025
And are you wondering what is the future of tax reporting and are we ready for the change? Although this topic is more neglected, we should know that to date every sector is subject to change.
The first provisions on SAF-T in Bulgaria are part of the proposals to change the ITAA in connection with the adoption of the 2025 budget.
So what will this mean for tax reporting?
Imagine the moment when tax checks become instantaneous - no waiting, no pressure. In this same case, errors in tax services and audit services are minimized and bureaucracy is greatly simplified. Sounds good, right?
This is precisely the purpose of the SAF-T (Standard Audit File for Tax Purposes). At its core, SAF-T is the international standard for electronic submission of accounting and tax data. And it is already underway in Bulgaria.
This means only 1 thing - we are facing a new era for business.
How will it affect us? What do we need to know to avoid falling into chaos? What will the challenges be and how should we prepare?
In this article on Ecovis I'll convey all the information in an easy (and understandable) way and walk you through everything important.
What exactly is SAF-T?
SAF-T is not a new or previously unknown term in the world of accounting services. Yes, it is not commonly used in Bulgaria, but that is yet to change.
SAF-T is an international electronic audit file for tax and accounting data submission created by the OECD (Organisation for Economic Co-operation and Development).
To explain it in the easiest way for you - the SAF-T audit file will be used as the method by which the NRA will collect and analyse our tax reports in a digital environment.
The file is sent in XML format, allowing for easier exchange of information between businesses and the NRA.
What is the basic idea - less fraud, faster checks and more transparency.
Why does SAF-T matter to us?
You probably think this is just another audit file you have to fill in. Addendum to all the others.
We understand.
But the truth is that SAF-T comes with serious changes and benefits for businesses and entrepreneurs. And for our state government as a whole.
Some of the biggest benefits of SAF-T include:
- Less audits and faster document approvals - The NRA will be able to analyze information automatically, which means less need for audits and inspections.
- Reduction of errors - the automated format will require validation of data before submission to the NRA, reducing the chances of omissions.
- Greater fraud protection - the more transparent the system, the harder it becomes for malicious individuals to access important information.
- Easier to work with accounting software - many software is now adapted to SAF-T, meaning we won't have to fill in endlessly long spreadsheets manually.
How will SAF-T be introduced in Bulgaria?
The implementation of SAF-T in Bulgaria will not happen "today for tomorrow". There are clearly defined phases to go through.
1. Pilot phase
In the beginning the implementation will start for volunteers. Companies that want to test the system will be able to send trial files, find bugs and adjust their software.
2. Grace period
The next step is the formal introduction, but with a grace period. This means that until the system is stabilized, we will be able to send test files without severe consequences if we make a mistake.
3. Mandatory submission
When the system is fully ready, the submission of SAF-T files will become mandatory for all.
What will we need to submit through SAF-T and when?
SAF-T introduces a defined periodicity for different data types:
- Monthly - General Ledger, Purchase and Sales Invoices, Payments.
- Once a year - Asset information.
- Upon request from the NRA - Inventory movement data.
In other words, we won't file everything all the time, but we must be ready to provide information when needed.
What challenges come with implementing SAF-T?
In the beginning, of course, there will be difficulties. Every change requires a stage of adaptation and getting used to the changes.
Here are a few things to prepare for:
1. New software solutions
We will need to make sure our accounting software supports SAF-T. This may mean purchasing new software or updating our existing programs.
2. Greater workload
SAF-T will not cancel current reports and returns. We will need to manage both at the same time.
3. Stricter data accuracy requirements
The SAF-T file may result in additional checks and revisions based on the submitted data. Therefore, we need to ensure that the information is accurate prior to submission.
4. Communication with customers and partners
We will need to demand accurate and timely data from our customers and partners, which may lead to new challenges in our work.
The importance of the SAF-T file in Bulgaria
The SAF-T file is not just another regulation. It is the future of tax reporting in Bulgaria and online accounting.
Yes, there will be challenges. Yes, there will be changes.
But if we are prepared, we can not only avoid the stress, but make our businesses more efficient. More generally, we can use this change to our advantage (reduced errors, streamlined accounting processes; easier interactions with the NRA).
Our expert recommendation is not to wait until the last minute. Start preparing now. Change always comes with a slight dose of stress and we know it. That's why we need to be prepared and turn changes into opportunities.