FAIA - e-VAT audits in Luxembourg

The Luxembourg VAT law allows the VAT Authorities to carry out dematerialised VAT audits.

At the end of 2009, the Luxembourg VAT Authorities published on their website a first recommendation about the implementation of the "Fichier d'audit informatisé AED" (FAIA) designed to carry out efficient dematerialised VAT audits.
 

The FAIA is designed to be a standard file. It is an interface between the systems of taxable persons and the systems used by the VAT Authorities for performing audits. It takes the form of a structured file through which information on the business is exported from the systems of the taxable person. This file is based on the Standard Audit File for Tax (SAF-T) developed at the OECD level.
 

End of 2010, the Luxembourg VAT Authorities published a second recommendation, taking into account observations and questions raised from businesses working in collaboration with PwC. This new guidance paper essentially introduced categories of businesses exempt to meet the FAIA requirements, for the time being.
 

Compulsory fields of the FAIA file are expected to be clarified during the first half of 2011. Again, this important next step takes into account several requests formulated by businesses in collaboration with PwC as well as the experience gained by PwC in Portugal while working on a similar evolution with the VAT Authorities in Portugal.

The introduction of the FAIA clearly intends to bring VAT audits in Luxembourg to a new era. Businesses which already need to comply with these new requirements must perform a first assessment of their systems, processes and organisation as a matter of priority. This is needed in order to determine how complex the introduction of the FAIA is for them and to define the level of budget that is needed to manage this mandatory change.

To gear up for the introduction of the FAIA, PwC Luxembourg can assist you in understanding and implementing this new requirement:

  • Assessing the recommendation’s impact from an accounting and VAT standpoint;
  • Reviewing the company’s computing environment and data available in the systems with regard to the data requested by the FAIA;
  • Reviewing the way in which transactions are booked from a VAT standpoint;
  • Reviewing the company’s internal control processes relating to accounting.

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