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Hosted by the Australian Taxation Office (ATO) 31 st January to 4 th February 2005

Technical Committee Conference. Sydney AUSTRALIA. Hosted by the Australian Taxation Office (ATO) 31 st January to 4 th February 2005. Contents. Page Executive Summary 1 Overview of OASIS and TaxXML Representation Key Committee Outcomes Future Meetings

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Hosted by the Australian Taxation Office (ATO) 31 st January to 4 th February 2005

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  1. Technical Committee Conference Sydney AUSTRALIA Hosted by the Australian Taxation Office (ATO) 31st January to 4th February 2005

  2. Contents Page Executive Summary 1 • Overview of OASIS and TaxXML • Representation • Key Committee Outcomes • Future Meetings Key Points from some of the Presentations and Updates 2 • Updates from Netherlands, UK and US • ATO Change Program • XBRL and Taxation in the UK • Netherlands National Taxonomy • Building XBRL GL 3 • XBRL in Australia • Identification: Customer Information Quality (CIQ) • Certificate of Residence (CoR) Working Session update • Core Component Technical Specification Summary of Agenda 4 i

  3. Contents Page Minutes of Meetings Monday 31st January 2005 5 Tuesday 1st February 2005 6 Wednesday 2nd February 2005 14 Thursday 3rd February 2005 21 Friday 4th February 25

  4. Executive Summary Overview of OASIS and TaxXML OASIS • The Organisation for the Advancement of Structured Information Specifications (OASIS). It is a not-for-profit, global consortium that drives the development, convergence and adoption of e-business standards TaxXML Technical Committee • Their purpose is to identify appropriate standards for Tax Administrations and ensure future development will meet taxation needs. It is not about developing new standards Representation Tax Administrations • UK • US • Germany • Netherlands • New Zealand • Australia • Canada (unable to attend this meeting) Other Organisations • Big 4 accounting firms • Software Development representatives • Individual representatives Key Committee Outcomes • a collaborative effort is required between Government, Software Developers and the Accounting community to achieve successful interoperability • XBRL is seen as a good tool for the sharing of financial information, however it is important that we understand what that information is and agree on definitions • the Committee agreed to shift their position on CIQ from one of “watching brief” to “supporting” its further development with a view to future adoption • further work is required to define taxation requirements for UBL • agreement to pursue use of XBRL-FR • requested the XBRL consortium to further develop XBRL-GL urgently so that it can be considered for use in the future Up-coming meetings and Events OASIS TaxXML Face-to-Face • 28 and 29 April 2005In Boston (to be Hosted by the IRS) • June 2005In Philadelphia (to be hosted by Vertex) XBRL Conference • 26 and 27 April 2005 (Public Days)In Boston Teleconferences(refer to OASIS website) 1

  5. Key Points from Updates and Presentations • ATO Change Program • the ATOs main focus is at the Agency level • registration and accounting data is now being exposed to Taxpayers • our dealings with our Clients need to be transparent, have repeatable processes, with everyone understanding the rules • the ATO business model, in essence, is to make it as easy for as possible for Taxpayers to comply, with sufficient interaction and information to manage risk • the ATO will provide certainty of outcome to Clients • the releases will impact three main areas: Client services, work management and integrated processing • XBRL and Taxation in the UK • forms are filed as XBRL with supporting documents as PDFs - the intention over time is to move the PDFs to XBRL • the UK IR is actively encouraging Software Developers to provide accounts in XBRL instead of PDF • XBRL saves re-keying and also assists with Analytics • Netherlands National Taxonomy • the project is supported by the European Union • the Dutch Taxonomy will be approximately 6 000 to 7 000 elements and version 1 should be available in February/March 2005 • UK: eFiling Update • the UK is seeing an increase in Agent registrations • Web based services have been provided and software developers are encouraged to value add to these services • there has been a spike in registrations, which is due to a monetary incentive to Small Businesses to lodge online • Netherlands: Update • compulsory Company electronic filing came into effect from the 1st of January 2005 • Tax and Customs are working with other Government Departments to have a single verification solution • a Whole of Government approach is being taken by building a new infrastructure which will be used by several Agencies and is expected to take 2 years • the Netherlands Tax Administration are looking to deploy pre-filled tax returns by 2008 • US: Update • UBL will be the standard used by the US • a prototype lab has been established with a Web Services approach • IRS and UK are exchanging transactions between financial data and Certificate of Residence (CoR) 2

  6. Key Points from Updates and Presentations Continued • Building XBRL-GL: Challenges • the key motivation is a single harmonised solution to improve the end to end reporting obligations for small business • XBRL GL contains a universal audit file • XBRL GL allows for easier reporting (such as financial, statistical and tax) by sorting and filtering the data • XBRL in Australia • need data to be coming in in order to test the capabilities • where XBRL is appropriate, we encourage it’s use • now our job is to find the natural owners for the Taxonomies • adoption in Australia is only by APRA at the moment, though other Organisations are displaying an interest • Identification: Customer Information Quality (CIQ) • CIQ is a sizable standard - designers need to learn it • some things in CIQ are not needed – thorough analysis will point to what is unnecessary • one view: XBRL will be hampered if it does not pick up CIQ as its standard for client information – CIQ should be embedded into XBRL • Certificate of Residence (COR) Session Update • Certificate of Residence is the certification that a party is a resident of a Country and allows for the identification of duplication of taxation • it is necessary to proto-type our methodology and how it can be implemented • analysis has been completed and work will commence on the specifications • it is anticipated that the specifications will be delivered at the next face-to-face meeting • Core Components Technical Specification • several years ago UBL was part of UNCEFACT but broke away – now looking to move back under OASIS umbrella 3

  7. Summary of Agenda Wednesday 2nd Feb 2005: XBRL and Taxation( presentations by Andy Greener and Harm-Jan van Burg) Building XBRL-GL(presentation by Eric Cohen) XBRL in Australia (overview by Trevor Pyman) The Accounting Debate (exchange of information with accounting professionals in Australia) Identification of Taxable Persons and Companies (discussion with Ram Kumar) Thursday 3rd Feb 2005: Position paper for Tax Administrations ver. 2 (discussion/ plenary session) Certificate of Residence (CoR) (working session) XBRL (working session) Report back CoR group Report back from XBRL group ebXML core components (overview by Sylvia Webb and discussion) OECD Standard Audit File (SAF) (discussion) Monday 31st Jan 2005: UBL and XBRL Working group Friday 4th Feb 2005: Indirect Tax (working session) Information Management and Analytics in the ATO (presented by John Body and Stuart Hamilton) On-line Business and Authentication (overview by Paul Madden) Future Business Projects and Outcomes for the Committee (discussion) STF - the TIES view (presentation by Arndt Liesen) Review of Decisions and Action Plan Planning upcoming Teleconferences and Face-to-Face Meetings Tuesday 1st Feb 2005: Discussion and adoption of the last teleconference minutes Update of developments within Tax Administrations (Germany, UK, US and Netherlands) ATO Change Program (presenters and demonstrationsfrom the ATO and Industry) International Tax Information Exchange (presentation by Peter DeCastro) 4

  8. The Agenda 2:00 pm UBL and XBRLto 4:30 pm Working group Monday 31st January 2005 • UBL and XBRL Working Group • UBL replaces paper for transactions – business documents, document templates, tax documents, e-commerce, forms other than business documents, etc Initially sale and purchase documents were developed but will be expanding – not limited to supply chain documents. Naming and design rules were approved last week by OASIS. • The TaxXML TC discussed the following: • 1. Incoming transactions – is it better than paper? • 2. Tax messaging, tax structures • 3. Can UBL have some non UBL payload such as XBRL – to be assigned to the indirect tax group technical committee – Andy UK • need harmonisation between UBL (and others) and XBRL GL in order to have an electronic audit trail • need to identify issues, business requirements, available resources (who will make it happen) • 12mths ago a discussion was held with the UBL TC with the view to ensure UBL will meet tax needs and determine how we would go about doing this. Tax messages will require naming and design rules of UBL. We need to consider embedding XBRL in UBL. UBL v1.1 is in development and any requirements for new messages are required by April • what changes are necessary to include in UBL spec? • what other information must be represented? eg unique identifier • uncertainty still exists about the boundaries between tax information, transactions and business reporting • dependencies exist between transaction data stores, general ledger and other financial accounts The Attendees 5

  9. Tuesday 1st February 2005 The Attendees The Agenda 9:00 am Welcome by Paul Madden – ATO Opening of the conference by Harm-Jan van Burg 9:10 am Discussion and adoption of the last teleconference minutes 9:15 am Update of developments within tax administrations (Canada, UK, US and Netherlands) 10:15 am ATO Change Program various presenters and demonstrations from the ATO and Industry 12:00 pm Lunch break 1:30 pm ATO Change Program various presenters and demonstrations from the ATO and Industry Discussion with group 4:30 pm International Tax Information Exchange Presentation by Peter DeCastro 6

  10. Tuesday 1st February 2005 Continued • Minutes from last Committee meeting • Arndt Liesen questioned 3rd page point 6.3 - should it be in 6.1? • Harm-Jan van Burg agreed to remove sentence • minutes accepted • Update of developments within Tax Administrations • (Canada, UK, US and Netherlands) • Unfortunately no Canadian representation, therefore update • from Germany included. • UK: eFiling update; Presentation • by Andy Greener • Update includes feedback, statistics and uptake of services • the UK seeing an increase in Agent registrations • 700 software Companies are developing 3rd party software • the UK IR provided Web based services and Software Developers are encouraged to value add to these services • all EDI is XML based development • there has been a spike in registrations due to a monetary incentive offered to Small Businesses to lodge online • ELS services will be switched off in the next couple of years and Agents switched to XML services • heavy marketing has been conducted for self assessment returns, therefore seeing huge growth in this area (over a million this due date) • ELS lodgments are starting to decline • the Child benefit system is administered by the UK IR and therefore online claims and enquiries are increasing • by 2010 all Companies will file their end of year PAYE reports electronically Welcome by Paul Madden of the ATO • thank you to those who have travelled to Australia • we are taking the opportunity to inform Software Developers and Accounting firms of what is happening with standards and interoperability • we would like to share our concepts and models that are being implemented in the ATO that will help Tax Administrations and accountancy Opening of the Conference by Harm-Jan van Burg • on behalf of OASIS – welcome • this is the biggest attendance we have ever had • thank you for the interest of non-member attendees Background to OASIS Committee • the Committee was established out of the OECD –eServices (now Taxpayer Services) when the XML issue was raised • Tax Administrations world-wide were spending a lot of time and money on XML and so a Committee was formed to enable Tax Administrations to work together • the OECD is comprised of non-technical members, therefore a TaxXML Committee established in OASIS which is independent • OASIS allows outside Industry ‘partners’ to participate the Technical Committee’s view is to develop and influence existing standards and therefore more than one standard is on the agenda • face to face meetings occur three times a year, with monthly teleconferencing 7

  11. Tuesday 1st February 2005 Continued • Netherlands: Update by Harm-Jan van Burg • No presentation • compulsory Company filing came into effect from the 1st of January 2005 • Companies seek extensions and therefore it may take all year before a lodgment is received • Companies can ask for an exemption and file paper but only a small number are deemed to be exempt (those that don’t have a computer) • there are two ways to file: • 1. commercial software packages; XML schema can be used • 2. filing for VAT online using a rudimentary portal (called Personal Domain) with a username and password as the authentication which is administered and distributed by the revenue Agency • Adobe technology is being used for an off-line application (that is free to the Client) with built in validation • there is no storing of draft forms Agency side • most Corporate filing is reverse workflow, with Clients shifting from electronic to paper to electronic to paper • both Netherlands Tax and Customs are working with other Government Departments to abolish in-house security and identification solutions and replace with a single verification solution • one possibility is the use of username and password as no cost is borne by the Client • a Whole of Government approach is being taken by building a new infrastructure to support electronic Government. The building of 8 basic administrations (eg a new register for individuals) will be used by several Agencies • Agencies will be forced to use the single register • it is expected to take 2 years to build and will be funded by all Agencies (no additional budget is required) • by 2008, the Netherlands will have pre-filled tax forms. This involves changing the due date for data from various sources such as Banks • The Netherlands is nearly at the limit for Individuals that own PCs and lodge electronically (nearly 80% – now looking for new solutions for those that are not e- enabled) • US: Update by Sol Safran • No presentation • UBL will be the standard adopted by the US IRS • a prototype lab has been established with a Web Services approach • the IRS and UK are looking to exchange transactions between financial data and Certificate of Residence (CoR) • Germany: Update by Arndt Liesen • No update 8

  12. Tuesday 1st February 2005 Continued • GST and Activity Statements by Matt Yannopoulos • the product used to capture GST information is the Activity Statement which is used for reporting by Businesses and Individuals • all tax obligations are on one form and the collection of revenue is in one payment • the original focus of the Activity Statement was GST only • withholding and income tax instalments were subsequently added • Clients lodge Activity Statements monthly or quarterly and are also required to lodge an annual report • the ATO generates personalised Activity Statements to Taxpayers mostly in paper (approximately 300 000 a month and 3 million a quarter) • the paper is difficult to keep accurate as the ATO generates the Activity Statements early and registrations/obligations may change before the lodgment date which creates processing exceptions • cycle times and processing needs to be reduced • the currency of information needs to be enhanced • cost of handling to the ATO and the Community is vast • updated registration and/or obligation data written by the Client on the paper form is often lost in the imaging process • the Business Portal has live, real time information that is more accurate and up-to-date than the paper forms • there is real-time lodgment capability within both the Tax Agent and Business Portals • ATO Change Program • Introduction by Greg Dark • where is the ATO going? The question is more why we are going • without an overall direction we just have a collection of systems and functionality • the ATO is working at a Whole of Government approach in parallel • the ATOs main focus is at the Agency level, though we are supporting Whole of Government • with the implementation of our Tax Agent and Business Portals, the ATO now has an ability to communicate with Agents and Clients online • previously our interaction with Clients was paper based transactions but we are now moving to more conversational transactions • registration and accounting data is now being exposed to Taxpayers • the ATO needs to be transparent, have repeatable processes, with everyone understanding the rules • the ATO business model, in essence, is to make it as easy as possible for Taxpayers to comply, with sufficient interaction and information to manage risk • provide certainty of outcome 9

  13. Tuesday 1st February 2005 Continued • Primary certificate holders are the key person behind the legal entity who can create new access accounts and restrictions on functions • Large Corporates can authorise another to act on their behalf – this function is the ATOs Online Access Management (OAM) tool • secure messages are available to Clients, which are topic based forms, routed through the ATO mail system and then responded to in the Portal • the Portal has 24/7 availability • the ATO is a Certificate Authority and certificates are free • the ATO is trying to move ATO Certificates forward to a Whole of Government level • the Business Portal uses PKI; Tax Agent Portal is pin/password or PKI, with a plan to move agents to PKI • training packages for functions on the Portal are available on www.ato.gov.au for anyone to access • the Business Portal spikes quarterly in usage due to Activity Statement lodgments • around 94% of agents use the Tax Agent Portal • parallel users are in the order of 200 sessions on the Business Portal • there are around 20 000 Agents with 13 500 who use it weekly averaging around 200 000 hits a week • the ATO is not looking at mandating Clients to go electronic but would rather entice Clients to the electronic services offered • Demonstration of the ATO Business Portal • by Robert Ravanello • the Business Portal came from the ATOs ‘Listening to the Community’ program where the general Community was asked their perception of the ATO and services required • the ATO has published a booklet ‘Making it easier to Comply’ which details what the ATO is doing in the program of change (this is available on www.ato.gov.au ) • the Business Portal was released to a pilot group of 25 SMEs in June/July 2003, then to several hundred in September 2003 and released to a few thousand in December 2003 • the Portal is real-time and linked directly to back-end systems • Staff see the same information as the Client and the Portal is available to Call Centre Staff • different accounts are available to Clients (Income, Instalments, Fringe Benefits Tax and some Superannuation accounts) which display both balances and transactions • a Client can drill into any General Interest Charge appearing on the account and view how the interest was calculated • Clients often make payments to incorrect accounts and therefore an account transfer function is available for Clients to self-correct online • when the ATO introduced the Portal, feedback early onfrom Large Corporates with complex corporate structures was that only some staff would require access and some would be limited in that access • the two layers of ATO certificates some what alleviates the issue of access 10

  14. Tuesday 1st February 2005 Continued Questions to Robert Ravanellorelating to the ATO Business Portal… Q: Is everyone who uses the portal expected to pay electronically? A: No, however most Small Business Clients receive a two week extension to lodge if they pay electronically. Q: How did the portal get built? A: It was developed in-house and is available to other interested Agencies. Q: What is the future of business portal? Does the ATO envisage a mandate for all businesses to use the portal? A: The ATO is not looking at mandating. We would rather have a strategy to attract people with lodgment concessions and better access to their information. Q: Payment is currently a separate process. Are there any plans to offer a direct debit function? A: We have offered direct debit for personal tax and have had very small uptake. There is an aversion by Clients to allow the ATO access to their accounts. Therefore we have taken the option to link Bpay as part of the lodgment process. We have also had discussions with the four major banks to introduce direct debit as part of a tax account, however Clients are reluctant to have banking and paying tax under a single banner. Q: Do ATO staff have access to the portal? A: Yes, via their LAN access. However, Staff use it for enquiries, not transactions (note: all access and usage is logged). Q: At what level does validation occur? A: Validations are done at field level (eg. alpha in a number field), at server level but most carried out at the back-end. Q: What are the browser requirements? A:A 128 bit SSL browser is required - Netscape, Mac 9 and 10 are tested. Q: How ‘real-time’ is the connection? A:It is real-time. Q: How is the portal connected to the main-frame? A:Currently we use an in-house solution which has scalability issues. For the future, another solution is planned which will be covered in a session later today. Q: Are the Keys of the PKI on the CD? A:No, the Client receives an email with a unique URL which allows them to download their keys. Q: Is it a multiple use URL? (eg if they have a system crash can they just go back to the same URL and download again) A: No, they would have to contact the ATO to be provided with a new PIN to access the URL. Q: Are there standards for page loading times? A: The ATO has tried to operate at around 5-8 seconds as a performance testing standard. For large or complicated processing at the back-end we set the limit at 12 seconds. We stress test for double the expected time. 11

  15. Tuesday 1st February 2005 Continued • Integrated Lodgment presentation by Shaun Wilkinson (Arrow Research Corporation) • Arrow was established 1989 and has offices in Australia, the UK and Auckland • Arrow financials is a modular system • BAS report writer can populate Arrow eAS • the application is written in .Net framework • the services used are 'List' , 'Get', 'Validate' and 'Submit'. • the data is wrapped in a SOAP envelope with PKI • signing for non-repudiation happens on ‘Submit’; authentication is used on 'List’ • there is an audit trail from BAS report writer to the Activity Statement so a Client knows what transactions have been included • the application is a Wizard style, similar to the ATO Business Portal • error messages are presented in the package from the ATO (short and long) • a change in Arrow eAS will be reflected in eAS Audit details showing the difference between the financial package and the lodgment data • Questions posed to Arrow… • Q: Did the ATO provide the validations? • A: Some validations are done by Arrow, some by ATO. The ATO has provided documentation to Arrow to assist in coding the validations. • Q: Tax practitioners have an interest in activity statements - has any research been done on the impact of allowing businesses to lodge directly rather than using an Agent? • A: Agents have differing views on their Clients’ ability to manage their affairs, and research indicates that Agents are happy for many businesses to manage their own activity statements (answered by Greg Dark of the ATO). • Interoperability-Whole of Government by Paul Madden • Paul Madden delivered a presentation on Interoperability and Whole of Government • Key priorities • 1. risk management • 2. pre-population of forms • 3. certainty • Live demonstration of accessing the Business Portal and available functions by Greg Dark • Facilitated lodgment via Quickbooks presentation by Pete Sanders and Matko Spadina (Quicken) • General information: • Quicken has 300 000 registered users with 60 000 personal users • Quicken has approximately 500 partners • Quicken products for accounting packages for non- accountants • Questions posed to Quicken… • Q: Will Quicken be able to import/export UBL documents? • A: Quicken are part of the XBRL Forum and are intending to adopt recognised standards. • Q: Are the codes used in the product standard? • A: Codes were decided upon in consultation with the ATO and other industry bodies. 12

  16. Tuesday 1st February 2005 Continued • DVD on ATO Change Program – Impacts on Staff • Paul Madden presented a video featuring Michael Carmody, the Commissioner of Taxation, addressing his staff on his expectations. Paul also referred to the document entitled ‘Making it easier to Comply’ (available on the ATO website www.ato.gov.au) which the Commissioner refers to as his contract with the Community. • ATO Change Program – Release Overview • by Robert Ravanello • Robert provided some information on the planned release of new technology. • the releases will impact 3 main areas – client services, work management and integrated processing • the first set of releases will focus on client services (eg the Portal and a CRM system for our telephony services) • the 2nd set will improve case processing • the 3rd set of releases will see the replacement of the ATOs back-end processing systems • ATO Change Program - Analytics • by Greg Dark • Analytics has assisted in improving workflow • the wait time for Tax Agents wishing to contact the ATO is now displayed on the Tax Agent Portal so that Agents make better use of their time • Analytics will also assist in responding to debt and developing audit models • Stuart Hamilton will be providing further details on Analytics later in the conference • ATO Change Program – Solution Architecture presentation by Glenn Smyth • Glenn provided an overview of the Business, Applications and Execution Architecture. • (end of ATO Change Program information) • TaxXML TC: Tax Administration Information Exchange Project by Peter DeCastro (US IRS) • Peter provided some background information on STF and the proposed International Tax Information Exchange Project as a prelude to a discussion to be held later during the conference. • Initial discussion points covered: • glossary • what data needs to be exchanged • the Project not only impacts Tax Administrations but could also benefit Large Corporations • Close of the day by Harm-Jan van Burg • Meeting closed at 5:15 pm 13

  17. Wednesday 2nd February 2005 The Agenda The Attendees 9:00 am Kick of by Harm-Jan van Burg 9:30 am XBRL and Taxation Short presentations by: Andy Greener – Transforming tax filing by the use of XBRL in the UK Harm-Jan van Burg – building a national taxonomy for regulatory reporting in the Netherlands 10:15 am Building XBRL-GL Presentation by Eric Cohen, Chair XBRL-US and inventor of XBRL-GL 11:00 am XBRL in Australia by Trevor Pyman (CEO XBRL Australia) 12:30 pm Lunch break 1:30 pm The accounting debate. Exchange of information with accounting professionals in Australia. Discussion. 3:00 pm Wrap-up of Accounting debate – Paul Madden and Harm-Jan van Burg 3:45 pm Identification of taxable persons and Companies. A discussion with Ram Kumar, chair of OASIS CIQ TC 14

  18. Wednesday 2nd February 2005 Continued • Opening of Day Two by Harm-Jan van Burg • XBRL and Taxation • Transforming Tax filing by the use of XBRL in the UK presentation by Andy Greener • The following are points discussed/noted by Andy during the presentation. • the UKs approach to adopting XBRL is very low key • other organisations in the UK are involved such as the Financial Services authority (who regulate the Banks etc.) and Customs and Excise • forms are filed as XBRL with supporting documents as PDFs, though the intention over time is to move the PDFs to XBRL • there is no standards for Company accounts or for computations and therefore the UK started working on their taxonomy two years ago – in consultation with Industry • the taxonomy is quite mature and stable now but there is no filing system built to try it out • the UK is actively encouraging Software Developers to provide accounts in XBRL instead of PDF • XBRL saves re-keying and also assists with Analytics Questions posed to Andy Greener… Q: What has been the take-up rate by developers in regards to developing XBRL? A:As there is no lodgment capability for XBRL as yet we cannot tell but there is a high level of interest. Q: Could the PDF be in XML? A:We have not changed the filing service but introduced a downloadable smart form which maps to an XBRL document (not XML). The form is designed for small Companies without complex situations and the form is filed on-line with attached PDFs (smart forms). The filing service treats it as a PDF but once it is in the UK data store, the embedded XBRL can be extracted. This is meant to be a stop-gap product but due to ease and efficiency it may well stay in place. Q: Form to XBRL or XBRL to Form? A:The form was designed first, then an XBRL template was built to represent the form; Adobe Form Designer was used to bring the two together. When you import the template, the Adobe software removes all the data pointers/context but because it is a simple form it is easy to put in again. Q: How large is your Taxonomy? A:3 500 – we started at 2 500 but it was added to by experts. It will grow when then GAAP Taxonomy is added. It is in the public domain but highly specific to the UK tax regime. 15

  19. Wednesday 2nd February 2005 Continued • Building a National Taxonomy for regulatory reportingin the Netherlands • presentationby Harm-Jan van Burg • Harm-Jan delivered a presentation labelled 'The Dutch Taxonomy Project'. • The following are points discussed/noted by Harm-Jan during the presentation. • the project is very political and has the support from the European Union • an annual report and a fiscal report is required from Companies, though it was found that small Companies were lodging annual reports that were not used for anything • the fact that it is so political is key to success – total co- operation to reduce administrative burden • a key aspect to the project is ownership – who will look after the Taxonomy and maintain it? • the taxonomy started with 180,000 different elements which was reduced to 1800 tax related elements • it is expected that the Dutch Taxonomy will be between 6 000 to 7 000 elements and version 1 should be available in February/March 2005 • once comments are received, version 2 will be released in September, with the final version published in January 2006 • IFRS has a taxonomy that the Dutch taxonomy is based on. IFRS has issued 3 versions this year, therefore making it difficult to stabilise the Netherlands Taxonomy • Netherlands Taxonomy Architecture • presentation by Harm-Jan van Burg • Harm also presented ‘Netherland’s Taxonomy Architecture’ Extra points noted: • the architecture for the Netherland's Taxonomy is freely available and could possibly be used in other Countries • the architecture is based on XBRL v2.1 • Oracle, Microsoft and a few other Software Companies will be publishing Proof of Concepts at the same time that the Netherlands Taxonomy is published. The Software Companies felt that they needed to be able to show what the Taxonomy would mean to business • Building XBRL-GL: Challenges for the • accounting Community • presentation by Eric Cohen • Extra points noted: • the key motivation is a single harmonised solution to improve the end to end reporting obligations for small business • XBRL GL contains a universal audit trail • allows for easier reporting (such as financial, statistical and tax) by sorting an filtering the data • XBRL is three things: • 1. XBRL is the collaboration of people to work together to exchange data • 2. Technical specification – agreement on how to use XML, define the information that is important and define the Taxonomy • 3. People that come together to create 16

  20. Wednesday 2nd February 2005 Continued The Accounting Debate Exchange of information with Accounting Professionals in Australia Three questions were put forward by Harm-Jan van Burg and Paul Madden to start the discussion. Attendees were then divided into two groups for 30 minutes. Discussion results can be found on page 5 of this document. The questions were as follows: Q1: What is the compelling Business Case to adopt XBRL from an Accounting perspective? Q2: What role should the Government play? Q3: What are the showstoppers and/or blockers that need to be addressed? • XBRL in Australia - discourse by Trevor Pyman • Trevor Pyman spoke about XBRL in Australia. • late in 1998, XBRL appeared and the ICA took a watching brief • the ICA then consulted with CPAs, forming a group in 2001. XBRL Australia was incorporated in January 2002 to give an XBRL focus and make it independent of Commercial interests • Government, Software Companies and Banks are involved with XBRL Australia and the ATO has been very supportive • XBRL Australia's priority is to raise awareness and promote the use of XBRL • as ideas come up, XBRL Australia looks at how to progress in a Commercial environment - Software Companies are looking for the demand from consumers • in order to test the capabilities of XBRL, there needs to be a flow of data coming in XBRL • the Australian Government Information Management Office (AGIMO) is creating a warehouse where various Taxonomies can reside. They are also creating a structure so that there is not a proliferation of standards • XBRL Australia is working with ATOs Software Developers Consultative Group (SDCG) and are eager to stay involved with that group so the relevance of XBRL story is shared • XBRL Australia are working with the Australian Accounting Standards board and Securities Commission to get IFRS standards in place • the only adoption currently in Australia is by APRA • please refer to www.xbrl.org.au for further information Group AMike Kennedy - NSW State Revenue Eric Cohen - Individual Shaun Wilkinson - Arrow Peter Boyle - Ernst & Young Max Cummock - NZ IRD Dave Watt - NZ IRD Regan Andrew - NZ IRD Camilla Vorrasi - MYOB Leigh Chambers - ATO Julian Foster - Allume Sylvia Webb - Individual Paul McFarlane - ATO Lou Capanello - Oracle Group B Christine Beasley - ATO John Dobell - Ernst & Young John Glaubitz - Vertex Michael Roytman - Vertex Duncan Lyon - Allume Andy Greener - UK IR Peter DeCastro - US IRS Trevor Pyman - XBRL Australia Richard Puffe - MYOB Roland Krebs - German Tax Admin Arndt Liesen - German Tax Admin Jason Daniels - PWC Sol Safron - US IRS Terry Lutes - US IRS Peter Lehr - Netherlands Tax Admin Jan Torny - Dutch Tax Admin 17

  21. Wednesday 2nd February 2005 Continued Questions Group A Group B • connectivity to different software applications • handling of data reduced if all software used by clients had XBRL • XBRL-GL would give Accountants, Tax Practitioners and Auditors consistency • re-use data, conduct KPI analysis, benchmarking, disclosure etc. • Accountants could add value by providing better assurance and streamline the commodity process • Tax Practitioners will pay for a better product • efficiency gains if Clients use products that allow XBRL-GL to export to the Accountant's package • save compliance costs, increase reliability and auditing assurance (continuous assurance and transparency) • transferring of information is more efficient • free information exchange • lower costs to accounting firms • move away from mundane to more value add – increase revenue • certainty/transparency of information • Business Case can be different depending on type of clients • case differs between Countries (eg. Australia 80% SMEs use Software package; US - many still use ‘shoe box’) • until it is regulated is there a case? • XBRL must go end-to-end in the chain to be really beneficial – must be at least one end Q1: What is the compellingBusiness Case to adopt XBRL from an Accounting perspective? • Government grants to Software Developers • deal with the politics and let Developers develop products • Government should have other objectives to maximising the bottom line • lead time to Developers - new Taxonomies need to be developed with new and/or impacting legislation • should mandate to Software Developers (preference) - ensures Developers are not wasting their time and money • be able to accept XBRL • agree on the Taxonomy and get people to use it • chicken and egg – the egg should be coming from the Government • both carrot and stick • depends if the Government are XBRL themselves – to promote XBRL the Government should be using XBRL • lead/drive a single view • do not play multiple hands - need to standardise • need to regulate XBRL based on Business Case for Government itself • incent or penalise? Both! Q2: What role should the Government play? • XML is flawed • XBRL is a different standard • Taxonomy should be independent of technology - spend too much time on XBRL and ignore business processes • big vendors should remove proprietary standards – upgrades etc. - are too expensive • regulations for Taxonomy and ownership • separate pure Financial from pure Tax – get wages and salary out of the accounts • must be end-to-end in the chain and must start at one end • old legacy software in Companies • unstable Taxonomies and no Governance • if key Government agencies do not adopt • cost to implement • Software Vendors do not implement • rival standard emerges: fear, uncertainty and doubt • lack of expertise available Q3: What are the showstoppers and/or blockers that need to beaddressed? 18

  22. Wednesday 2nd February 2005 Continued • Summary of Panel Questions • A spokesperson from each group presented their findings, followed by questions by a panel comprising of: • The questions were as follows: • Q1: What is the compelling Business Case to adopt XBRL from an Accounting perspective? • examples of efficiency – re-keying of data. Why isn’t everyone using it? The efficiencies must not be apparent • cost will go down the chain to the consumer – does the Taxpayer make the savings? • if the Government saves money will they cut taxes? • Accountants will keep cost reduction to themselves. Clients don’t always pay their bills so may be removing a revenue stream that isn’t really there • are the efficiencies at the smaller end or the larger end of town? Corporates would have the greatest advantage but smaller end would also benefit • Small Business operator would not just move to XBRL, they will move with their software; it will come to them, they won't go and get it • Software Developers cannot charge for something people don’t want or don’t know about – need to come up with another way to value add • in the US Customers pay for new versions due to the changes to tax law • a view that tax preparation software would not be required as reporting tax would fall out of existing administrative systems • people are loyal to their software and can work around non- compliance issues in the software – costs too much to migrate • people won't demand XBRL or interoperability. They demand value add and less time doing compliance. They will do something when they get tired of working with software that doesn’t meet their needs. When PDFs were introduced a lot of software was given away for free • critical mass – when everyone they deal with has it • no real value if still interfacing with 7 organisations (eg tax has XBRL but no other reports do) still have 7 methods of reporting and one just happens to be XBRL • Q2: What role should the Government play? • if mandated, would remove ambiguity • if mandated, would give certainty – the standard would be there with the Government looking after it • would not be a problem for Software developers – they would do it – the standard would be the benchmark and they could look at ways to add value to their products • Tax legislation complicates it – Government could look at the complexity • would help Government when legislation changes or concessions under consideration, using XBRL data would allow better modelling Edgar Baltins - KPMG Eric Cohen - Individual Shaun Wilkinson - Arrow Camilla Vorrasi - MYOB Duncan Lyon - Allume Trevor Pyman - XBRL Aust. 19

  23. Wednesday 2nd February 2005 Continued • Extra points noted: • CIQ is a sizable standard and it is relatively easy to get lost in. Designers need to learn it • some business analysis on requirements is essential before the schema is produced. some things in CIQ are not needed – thorough analysis will point to what is unnecessary • one view: XBRL will be hampered if it does not pick up CIQ as its standard for client information – CIQ should be embedded into XBRL as the standard for identifying clients • Close of the day by Harm-Jan van Burg • Meeting closed at 5:10 pm • Q3: What are the showstoppers and/or blockers that need to be addressed? • what is the cost to Government of receiving different types of information? What is more important – the technology used or the information being received? • the Taxonomy is the show-stopper – without the vocabularies it doesn’t matter what the technology is • both groups mentioned a competing standard (perception or reality) which is enough to stall the market place • XBRL Committee members should start using XBRL • Identification of Taxable Persons and Companies • Customer Information Quality (CIQ) • presentation by Ram Kumar • Harm-Jan introduced Ram Kumar and explained why Ram had been invited to speak to this Committee. • CIQ Implications for TaxXML Projects • presentation by John Glaubitz • UK-US CoR Application • presentation by Michael Roytman 20

  24. Thursday 3rd February 2005 The Agenda The Attendees 9:00 am Kick of by Harm-Jan van Burg 9:10 am Position paper for tax administrations version 2 Discussion/plenary session 10:45 am Certificate of Residence (CoR) working session Parallel session 10:45 am Business process infrastructure 12:00 pm Lunch break 1:30 pm CoR working session continued Parallel session1:30 pm XBRL working group 3:00 pm Report back CoR group Report back from XBRL group 3:30 pm ebXML core components Overview by Sylvia Webb and discussion 4:00 pm Discussion of OECD Standard Audit File (SAF) 5:00 pm Close of the day 21

  25. Thursday 3rd February 2005 Continued • Position Paper for Tax Administrations • Harm-Jan considers that the position paper is not ready for discussion as too fragmented – it needs work • agreement with OECD Tax Payers Services group that the • position paper will be ready before next meeting in • September • there are 2 more face-to-face meetings between then and now. Therefore, suggestion that this agenda item be postponed to a later meeting and use the time to review the document • Harm-Jan suggested that the CoR working group commence and remainder of group review the document • due to early flights out on Friday afternoon, agenda will be re-organised to ensure important wrap-up items are covered early in the day. Harm also suggested that a discussion on the position paper could also be carried over in an evening session – possibly Friday for those not flying out until Saturday • will not contain action items and would give a clear direction • need to clear up our position for those standards were we take a watching brief (need to be more explicit) and then be aware of the consequences of our statements as we could damage existing or developing standards • fundamental position of this paper will not be changing – with regard to open standards, but our position on specific standards may change • will need a new section on GL in conjunction with financial reporting. • will take a stronger position on CIQ – in favour of the standard. • SAF and STF removed from standards list and in a separate section of the document to be called ‘OECD Developments’ – separated from open standards. Would remain in the paper • lengthy discussion with regards to our position on SAF (more this afternoon); our main change – both developments have been approved by OECD and we can’t change that – we have no position to oppose. • idea of group to move to stronger promotion to use GL as the way forward and put SAF as a step in that direction but we acknowledge that for Software Developers we need to make our direction known. Need to give certainty. SAF should not distract from the option of GL and further development. • need some new elements in the document – we have dissected the document and have allocated names for some work to be done on the various sections • final document will be thinner and after version 2 just have a yearly update • Review of Position Paper - Summary of Outcomes • Harm covered feedback from group reviewing the position paper • remove XML from title – just call it a position paper • purpose of going to version 2.0 – would confuse intended audience if we kept issuing versions of our position • go to version 2 – but would take some of the attachments out of the core paper and therefore be able to change them more often 22

  26. Thursday 3rd February 2005 Continued • The group discussed... • What do we need to put into specs so we can move forward • what should the specification contain, how should it be organised, how it should be structured etc. • looked at scope • narrowing down to cover US and UK • this specification needed to be something that was not too specific about how to do it • want to try some different possibilities (eg use CIQ as the standard) • once we have specifications and an implementation guide – • here is what it needs to do and the guide for the proto-type • – can learn from that going forward • might look at UBL as well • look at basic pieces of information that will support CoR – will be uniqueness according to each jurisdiction – will find this with any issue • want to make sure that in the specification we have something on how to deal with this kind of issue • have framework of what we think the specification should be • will have something to deliver at the next face-to-face meeting • Task allocation (proposal) • The allocation of tasks included detailed comments around some of the sections in the Position Paper. This detail has been included in the Discussion Group notes in the word document on the previous page. These tasks will also be reflected in the action items. • Harm-Jan would like tasks completed by end of March • Committee agreed. • Certificate of Residence (CoR) working session - update • John Glaubitz provided the summary, as follows: • Certificate of Residence – certification that a party is a resident of a Country and identify duplication of taxation • proto-type methodology, and how we can do it • put out an analysis document last May – what CoR was about, high level process model and what type of information needed to be transacted • need to get to greater level of detail as to how process would work – focus on jurisdictions and how it would work • UK, USA and Canada – visited Tax Offices and saw what they did – have brought this back to use as a basis of going forward • identify what we need to do to make it happen – what we can keep as standards • completed analysis, ready to work on the specifications • missing UK and Canadian representatives who were unable to attend this meeting, however some new perspectives 23

  27. Thursday 3rd February 2005 Continued • OECD Standard Audit File (SAF) discussion • Eric brought the group up to speed as he is a member of the OECD SAF working group • existed for 5 years • looking at how Tax Administrations can cope with the emerging electronic environment • have produced two documents - ‘Guidance for Developers of Business Accounting Software for Tax Purposed and ‘Guidance for Standard Audit File - Tax’ • Guidance for Software Developers – a paper to help Tax Administrations to meet with Software Developers about the design of products - has options, recommendations, guidance and history (movement towards electronic commerce and the problems this has led to – cost of compliance, filing, etc) • recommendation that software packages can export a file for auditing and include adequate internal controls – looking at moving to international certification for software with regard • to the internal controls. Who will do the certification? Eric • said commercial organisations • discussion that Netherlands and NZ already certify – but certify that the message can be read, not that the package produces a correct filing • Core Components Technical Specification • presentation by Sylvia Webb • Extra points noted: • several years ago UBL was part of UNCEFACT but broke away – now looking to move back under OASIS umbrella • Library is a spreadsheet – lots of columns – spreadsheets were chosen as they are easy to use – available worldwide even where IT not advanced. One view is that is a weakness • rationale is that UBL should use the lowest common denominator • Questions posed to Sylvia… • Q: If you follow the methodology, too many spreadsheets. Why? • A: large corps don’t have to use spreadsheets, they exist for users without tools. • Q: What is the difference between a qualified data type and non-qualified type? • A: Non-qualified is a string, a numeric, an integer but qualified has ABC attached. • Q: Issue around code lists and substitution groups? • A:Sylvia will be able to clarify at a later date . Close of the day by Harm-Jan van Burg Meeting closed at 5:30 pm 24

  28. Friday 4th February 2005 The Agenda The Attendees 9:00 am Kick of by Harm-Jan van Burg 9:10 am Indirect Tax working session to 12:30 pm Parallel session 9:10 am Information Management and Analytics in the ATO presented by John Body and Stuart Hamilton 10:10 am On-line Business and authentication by Paul Madden 11:10 am Future Business Projects and outcomes for the committee - discussion 12:30 pm Lunch break 1:30 pm STF - the TIES view Presentation by Arndt Liesen 1:45 pm Review of decisions and action plan 3:00 pm Planning upcoming teleconferences and face-to-face meetings 3:15 pm Conclusion and closure by Harm-Jan van Burg 25

  29. Friday 4th February 2005 Continued • (Parallel session) • Information Management and Analytics in the ATO • Information Management and Analytics • presentation by John Body • consistent interpretation of the data in the Data Warehouse is an issue • the ATO has too many cubes (currently around 15 000) which leads to inconsistencies in analysis • the ATO needs to reduce the amount of cubes to around about 15, which should answer the majority of questions • Question posed to John • Q: How do you manage standards when moving from • legacy systems to new? • A: This will be a juggling act and will progress in parallel (aligning • as the ATO goes) but is complicated due to the transition the • ATO is going through. • Analytics and Personalisation • presentation by Stuart Hamilton • Stuart’s presentation dealt with Analytics and how to personalise • the ATOs interactions with Clients. • Question posed to Stuart • Q: Is the ATO going to look at Tax Agent influence over Client behaviour? • A: Tax Agents can have good and bad behaviours - they may be compliant in some areas and not others. Some Tax Agents encourage aggressive tax planning. Some Clients will seek out certain Tax Agents. • Opening of the Day Four by Harm-Jan van Burg • Harm-Jan welcomed attendees and outlined the agenda for • the day. • Indirect Tax Working Session • The following people attended the Indirect Tax working • session: • Session update by Andy Greener • the Candidate Reference document only needs tobe brought into line with the naming and design rules. This will be done by John in the next two weeks • the final reference document will be available for the Committee to vote on within three weeks • a review of the UBL invoice (compared to XBRL model) is to be conducted with feedback to be incorporated into V1.1 of UBL • the UBL model was discussed in detail, with the identification of some deficiencies and areas where the model needs to be strengthened • the review is to continue with weekly conference calls with an aim to have the review completed by the end of February 2005. Substantive comments to give to UBL Dave Watt Andy Greener Arndt Liesen Michael Roytman John Glaubitz Jan Torny Paul McFarlane 26

  30. Friday 4th February 2005 Continued • Harm-Jan related the Dutch experience on PKI: • the Netherlands Tax Administration was concerned about PKI impacting on the aim of increased electronic take-up and therefore adopted the approach of username and password around 18 months ago • the Trust Programme infrastructure was implemented via a Web service • the infrastructure allows a Customer to sign in, which checks the Customer’s identity against a central register. Once their identity is established, the Customer can access any service of the Government • all Commercial interests could make use of the Trust Programme, which is based on open source software • the Trust Programme defines the available services and the Customer defines which services they wish to sign up for • if the identity of a Customer is not completely established, then the Customer cannot change theirpassword and no information is given to them • there is a plan in place to migrate certificates to the Trust Programme • Businesses are responsible for deciding who they trust, whilst the Government decide the level of trust • usernames are issued and Clients can change their password • the Government think security is paramount but Community acceptance is very different • Public Key Infrastructure (PKI) and Authentication • presentation by Paul Madden • Evidence of Identity (EOI) is an issue • approximately 5 000 Businesses (multi-nationals) and 1000 Tax Agents use secondary certificates • the Primary holder controls the Secondary ones – Secondary certificate holders have no delegation powers • it is possible to set up more than one Primary in order to manage transitional arrangements (eg when a Primary certificate holder leaves a Company) • the ATO is unable to check on how the certificates are being used (ie one certificate is used by many users) • Bookkeepers manage affairs for many Clients and have many certificates that they use • Questions posed to Paul around PKI • Q: How do you manage your passwords? • A: Clients manage them themselves – we have a help desk and can re-set if necessary. • Q: How easy to take certificates from one PC to another? • A: You can download to other PCs or pick up the folder and take it with you but you must have Java with it or you will have problems. • Q: Why can’t the ATO use the same technology as the banks? • A: Paul advised that the banks are planning to move to digital certificates. • the Group agreed that it had to move to a simpler process in order to increase take-up 27

  31. Friday 4th February 2005 Continued • STF - The TIES View • presentation by Arndt Liesen • Arndt Liesen provided a presentation further to Peter DeCastro’s • power point delivered on Tuesday. • there is a Task Team on Improving Electronic Exchange (Arndt liaises with the IT team). One of the IT team tasks is to liaise with OASIS TaxXML TC • STF is a product of TIES (Tax Information Exchange System) • Arndt pointed out that many of the issues mentioned in Peter’s power point were at the origin of the STF development • STF was adopted by the OECD January 2005 • TIES is already doing much of the work that Peter’s power point highlighted as needing attention • Response by Harm-Jan van Burg: • formal liaison currently only exists with the Tax Payers Service group • Position Paper V1.0 says we would like to work together but there are some issues with proprietary status – the moment OECD decides to say STF is open then there is no requirement for co-operation as STF would be a fact • the proposed Tax Administration Information Exchange project might overlap with TIES but is an exercise well worth doing • the OASIS TaxXML Technical Committee should be used as a reference group • Close of the Conference by Harm-Jan and Paul Madden • thanks to attendees • look forward to seeing members in Boston • Meeting closed at 3:00 pm • Discussion - UBL and XBRL • How should we move on? • Harm-Jan van Burg, Andy Greener, Eric Cohen and Sylvia • Webb – discussion (not to finish it but to decide how to • progress). • Results: • Andy to write a formal request to design a UBL core component that would link to XBRL (working towards V2.0) • Eric to write explanation of what an electronic audit file would mean in XBRL GL • Sylvia to ask around the UBL community as to what an electronic audit trail would mean • then the information will be compared • Planning up-coming Meetings • Harm-Jan opened the afternoon session and advised of • future meeting dates. • 28-29 April 2005 (Thursday and Friday) in Boston and to be hosted by the IRS • note: the XBRL Conference is being held that week - • Tuesday and Wednesday are public days • June 2005 in Philadelphia and to be hosted by Vertex • upcoming teleconferences will be related to action items • 4pm Eastern Time – schedule will be set up on website • there may also be a need for phone hook-ups related to Projects 28

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