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Subject: Comments on XML Position Paper
Below are both general and specific comments on version 0.3 of the XML Position Paper for Tax Administrators. It's possible that specific comments may be rendered irrelevant if major changes are made as a result of the general comments, but I'm including them all anyway. General comments: 1. The document needs to be positioned with respect to its intended audience (and that audience needs to be clarified). I think that the title is correct (as far as it goes) in addressing the document to Tax Administrators (or Tax Administrations...), but we know that it is also targeted at OECD. It's not clear to me whether that should be explicit in the title or not (I leave it for others to decide whether 'Position Paper' is appropriate or not - I have no strong views on the subject). Having got the audience sorted out, we then need to position the document correctly for that audience. At the moment the Recommendations sections are aimed at the Tax XML TC itself. It would be more appropriate for the recommendations to be addressed to Tax Administrators/Administrations (suitably modified of course), but perhaps with a statement of the TC's current and future intentions in close proximity to provide context and justification for each recommendation (i.e. we practice what we preach). 2. We need to be careful to make the distinction between XBRL the standard, and XBRL the federation of jurisdictional Taxonomies. The standard is an empty vessel as far as specific data items are concerned, so it is not appropriate to talk of XBRL as defining some tax reporting items but not others - the standard itself doesn't define any data items. Data item definition is the domain of the Taxonomy builders in each jurisdiction, and inevitably there will be differences in coverage (and in terminology, and appropriateness, etc). We need to take care when justifying XBRL as a standard that we don't rely on any particular Taxonomy - in fact it's entirely possible (as we discussed in the first XBRL SC call) that we may be instrumental in formulating an international tax XBRL Taxonomy upon which jurisdictional Taxonomies might depend or make reference to (once we have our Global Tax Ontology in good shape). I'm also a little nervous about recommending XBRL wholesale as the standard for tax reporting. It is certainly appropriate in the corporate financial reporting world, and by extension therefore the corporate tax reporting world, but I can think of a number of tax reporting scenarios here in the UK for instance for which it would be less than ideal (personal tax compliance information, payroll deduction and compliance information for income tax and National Insurance, duty on property and financial transactions, etc). 3. I don't think that enough emphasis is being given to UBL - as we know it's not just a supply chain standard, but equally it's not just an alternative to CIQ or other standards for customer data either. It provides a framework in which document templates can be defined and combined with re-usable components to produce structured documents that follow a well-defined set of compositional rules. Individual components may be built with other standards, such as CIQ or even XBRL, as appropriate. The same argument could be advanced for the OAGis document framework, which is very similar of course. 4. Given that OASIS is largely an XML Standards body, and the title of the TC is 'Tax XML', it seems a bit superfluous to suggest that the committee has actively selected XML (Executive Summary) as the preferred standard for exchanging information. I think that was a 'given' :-) 5. The sense and meaning of various sentences needs to be reviewed in the light of an apparent 'find & replace' of "ATO" (singular) with "Tax Administrations" (plural)! Specific Comments: 1. Glossary: Browser channel: I don't understand this definition at all - is it the result of a global 'find & replace' for ATO? 2. I'm not sure I understand the difference between the definitions for 'online interactions' and 'Other software channel' - they seem to amount to the same thing. 3. Glossary: TaxXML: Any Tax XML standards that emerge will not be limited to the exchange of data between central tax agencies. 4. Glossary: UBL: UBL is not "an XML Schema" - it's better described as "a template and component framework for business documents". It's not restricted to documents such as Order, Invoice and Despatch Note either, though those are the document types the UBL TC have implemented first. 5. Glossary: XML Document: the term 'statement' carries too much baggage I think, and whilst an XML document is text, I think "text document" is also misleading. I'd prefer: "A self-contained stream of XML-formatted data such as a message or a company's financial details". 6. Glossary: XML schema: A Schema can describe a part or a fragment of an XML Document as well as a complete definition (i.e. an XML Document may be fully described by a number of XML schemas). 7. Executive Summary: The sentence "These are but some of their challenges" is superfluous. 8. Executive Summary, 4th para: drop the word "future" - XML is preferred now! (but see my general comment (no 4) about this whole para). 9. Background 1.1: I don't understand what 'the Tax Administration's E-Service results' means in this context. 10. Document Purpose 1.2: The second bullet point is not appropriate since it isn't a question (and that only leaves one bullet). 11. What is Interoperability? 2.1: change "ability of two systems" to "ability of two or more systems". 12. Standards coverage 4.2: I think there is an important piece of content missing from the diagram: compliance data. In "self-assessment" regimes particularly, compliance data is an important component of a return - it's not financial data, and it's not "client" data (which might be better termed "designatory" data anyway). 13. XML Value Proposition 5, Externally 5.1: Despite being titled the "XML Value Proposition" this section is entirely oriented towards XBRL and corporate taxation. 14. XBRL 5.3: Specific examples from the Australian jurisdiction need to be removed from this section and the difference between the XBRL standard and local accounting taxonomies made clear (as discussed in the general points above). Also, there is a factual error that needs correcting: UK IR have not, as yet implemented any e-filing applications using XBRL, but we're working on it :-) The last sentence (before the Recommendations) doesn't make sense. 15. Recommendations 5.3: Qualify support for XBRL for "exchange of *corporate* financial information". The recommendations are for the TC, not the target audience (as discussed in the general comments above). The last bullet point should refer to extension Taxonomies to existing XBRL Taxonomies, not "schemas". 16. UBL 5.4: 2nd para is misleading - UBL is not just applicable to data such as client details (see general comment above). 17. SAF 5.6: The third para seems to start mid-sentence? 18. Recommendations 5.9: UBL: the UBL TC won't address tax documents if we do nothing, so we need to be more pro-active than simply "monitor progress occasionally". 19. Recommendations 5.9: diagram: same comment applies as for point 12 above - compliance data is another important component. UBL and/or OAGis are potential standards for the "content" component in the diagram (i.e. the structure and organisation of the document). 20. Attachment 1: XBRL: again, this needs to clarify the separation between the XBRL standard and jurisdictional Taxonomies. The bullet points in particular refer to specifics of a particular local Taxonomy. The last para of the attachment is a little mis-leading - "scaremongering" about the complexity of XBRL was propagated by an industry representative body, without any real evidence from their members, and I'm not sure what the relevance of UK IR accepting PDF documents is in this context. Perhaps it's better to remove this para? 21. Attachment 2: UBL: It's not really accurate to speak of "one UBL schema for common business documents" since UBL defines a framework for document templates and re-usable components which may involve many individual XML Schemas in the composition of a document. 22. Attachment 4: SAF: The last sentence of the 4th para (just before 'Advantages') doesn't make sense here (it looks like it has been translated into English and may have been dropped in out of context). The section on 'Compression and safety keeping' also seems out of place here. Andy -- Andy Greener Mob: +44 7836 331933 GID Ltd, Reading, UK Tel: +44 118 956 1248 andy@gid.co.uk Fax: +44 118 958 9005
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