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GLOBAL SERVICE / INDUSTRY Tax and XBRL GL … the logical next step The phased adoption of XBRL in the tax domain ADVISORY / FINANCIAL SERVICES Marc van.

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Presentation on theme: "GLOBAL SERVICE / INDUSTRY Tax and XBRL GL … the logical next step The phased adoption of XBRL in the tax domain ADVISORY / FINANCIAL SERVICES Marc van."— Presentation transcript:

1 GLOBAL SERVICE / INDUSTRY Tax and XBRL GL … the logical next step The phased adoption of XBRL in the tax domain ADVISORY / FINANCIAL SERVICES Marc van Hilvoorde Tokyo, november 8, 2005

2 © 2005 KPMG Business Advisory Services B.V. a member of KPMG International, a Swiss cooperative. All rights reserved. Printed in the Netherlands MvH 2 Tax processes: different data needed Tax declaration/filing: “Give us the amount of your profit” Type of information needed: 80 Inspection/audit: “Prove to us that your amount is correct” Type of information needed:

3 © 2005 KPMG Business Advisory Services B.V. a member of KPMG International, a Swiss cooperative. All rights reserved. Printed in the Netherlands MvH 3 Tax processes: create information from data Tax declaration/filing: “Give us the amount of your profit” Inspection/audit: “Prove to us that your amount is correct” Inspection / audit  Sales transactions with large discounts  Ratio and trend of purchase  sales  Percentage and trend of production losses  Profitability compared to the market  Purchase/sales changes while stock remains the same  … data information

4 © 2005 KPMG Business Advisory Services B.V. a member of KPMG International, a Swiss cooperative. All rights reserved. Printed in the Netherlands MvH 4 The logical first step Audit file Payroll Audit file Other Company X Company Financial System Tax authority Back office system Other …( parties?) e.g. auditor, … Other …( parties?) e.g. auditor, … Financial intermediaries and audit firms Audit file Financial Company X Company Financial System Company X Company Financial System Proprietary standard, specific solution per domain, limited flexibility in defining data requirements

5 © 2005 KPMG Business Advisory Services B.V. a member of KPMG International, a Swiss cooperative. All rights reserved. Printed in the Netherlands MvH 5 Custom Audit file Custom Audit file Custom Audit file The logical next step: XBRL GL Company X Company Financial System Tax authority Back office system Company Y Company Financial System Company Z Company Financial System Query Inspection  Data requirements differ: specific for branch, company, process  Data source systems differ

6 © 2005 KPMG Business Advisory Services B.V. a member of KPMG International, a Swiss cooperative. All rights reserved. Printed in the Netherlands MvH 6 Evolutionary steps in digital tax processes  Digital filing of taxes (eTax filing)  Audit files with transaction information and master data  Automated audit procedures –“Look for sales transactions with large discounts” –“Calculate ratio and trend of purchase ó sales” –“Calculate percentage and trend of production losses” –“Compare profitability with the market” –“Look for purchase/sales changes while stock remains the same”  Integration with accounting data model and accounting software, opposite to separate tax data model and specific tax software  Query based custom (company specific) audit files, based on a risk profile, per sector, per company, using historical and benchmark data  Completed ‘tax filing forms’ –“We think this is your profit, prove us if this is not true”

7 © 2005 KPMG Business Advisory Services B.V. a member of KPMG International, a Swiss cooperative. All rights reserved. Printed in the Netherlands MvH 7 XBRL for taxes XBRL requirementsWhich parties involved Digital filing of taxes  FR (tax filing) taxonomy  Jurisdiction Audit files  FR and GL taxonomies  FR and GL conversion  XBRL international  Jurisdiction Automated audit procedures  FR and GL taxonomies  FR and GL conversion  Formula link base  XBRL international  Jurisdiction Integration accounting and tax  FR and GL taxonomies  Formula link base  Jurisdiction  XBRL international Query based custom audit files  FR and GL taxonomies  FR and GL conversion  Formula link base  Jurisdiction  XBRL international

8 © 2005 KPMG Business Advisory Services B.V. a member of KPMG International, a Swiss cooperative. All rights reserved. Printed in the Netherlands MvH 8 Wrap up…  XBRL can be implemented in steps in the tax domain  Different tax processes use different kind of information and are supported by different kind of taxonomies (FR  GL)  XBRL GL is a critical component in supporting tax processes ..and XBRL International needs to resolve some issues to facilitate the tax domain

9 © 2005 KPMG Business Advisory Services B.V. a member of KPMG International, a Swiss cooperative. All rights reserved. Printed in the Netherlands MvH 9 Thank you Background  Dutch governmental project: Building a financial reporting, tax, statistical taxonomy and supporting infrastructure  Project website: (English background available)www.xbrl-ntp.nl Marc van Hilvoorde, KPMG The Netherlands  Vice chair International domain working group 


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