Indirect Tax Publications

Governments are increasingly relying on indirect taxes to generate revenue. For several years, businesses have witnessed the importance of indirect taxation as governments have embraced the shift from direct to indirect taxation.

Is your FAIA file ready for scrutiny?

The law requiring taxpayers to produce a FAIA (Fichier Audit Informatisé AED) file upon request of VAT authorities entered into force in 2008.

Helping you to be compliant with the obligation.

eVATAR - Save your time with our XML converter tool, eTVA compliant

In an era of digitisation - and in the context of the European VAT directive that requests domestic authorities to give taxpayers the possibility to fulfil their compliance obligations electronically - the Luxembourg VAT authorities have gone for an automation of their processes in a bid to simplify and accelerate administrative processes.

Obligation to use SAF-T for VAT in Luxembourg

The OECD has defined a standard audit file format (Standard Audit File for Tax (SAF-T) for tax audits and a standard set of tests to be performed during an audit. Many OECD countries are considering the feasibility of implementing SAF-T and some have already begun. There will be some variation in how each country implements SAF-T, such as the scope of data, file format, whether it is mandatory or not, and which tax payers are in scope. However, companies in each jurisdiction will face a common set of challenges:

  • How to extract and populate a SAF-T file from their systems,
  • How to verify that all requirements are met in terms of structure and format,
  • How to ensure that the file content is VAT-compliant before submitting it to the tax authorities

Luxembourg is one of the counties which have implemented the SAF-T. In Luxembourg, SAF-T is referred to as FAIA (Fichier Audit Informatisé Administration de l’enregistrement et des domaines).

VAT can be an important cost in the Asset Management industry. Funds and asset managers must consider both VAT-related risks and opportunities in the set-up and development of their product range.