1. Standards and Taxation The Work of the OASIS Tax XML Committee Terry Hawes OASIS Adoption Forum October 2005

2. September 2005 Context Head of Channels Architecture in HM Revenue & Customs which includes responsibility for interoperability standards Speaking principally as a consumer of OASIS work (not a deep technologist!) and about the importance of how the Committee works as much as what it does Our Online filing service interfaces are published as XML schemas and integrated into commercial payroll, accounting and tax management software We work with around 600 commercial software developers Standards matter to them so they matter to us! But why do they matter?

3. September 2005 The case for using XML standards in tax Tax agencies understand and accept the need to use Internet Standards (HTTP, TCP/IP etc.) Most have or are adopting Web Standards and Guidelines (XML, SOAP etc.) But e-Business Interoperability Standards are less well understood and their importance not so obvious In the rush to adopt XML or extend its use, tax agencies can create significant problems and avoidable costs and risks for themselves (in areas like schema maintenance) and for the software development community (in integrating tax related reporting requirements across jurisdictions) But this is an issue tax agencies should not tackle on their own ……...

4. September 2005 OASIS Tax XML Committee - Background The OECD created a “taxpayer e-services group” in 2000 which bought together the tax agencies of initially about 15 countries (now around 35) to share knowledge and experiences It identified a need for the use of common XML standards across tax agencies but struggled to deal with it as a purely Government sector organisation In 2002 it agreed to support the creation of an OASIS Tax XML Committee to bring together tax agencies and the private sector in an open, independent environment The OECD services group (the “e” has been dropped) has a special relationship with the OASIS Committee but understands it cannot control it.

5. September 2005 OASIS Tax XML Committee - Purpose The principal aims are to;  Research and analyse personal and business tax reporting and compliance information  Define a framework to facilitate interoperability in a way that is open, flexible and international in scope It continues to work very closely with the OECD Taxpayer Services Group taking business and priority steers from it and seeking its endorsement of Committee products Among the deliverables are Tax Vocabulary, XML schema and implementation guidelines, repository for tax information storage and management

6. September 2005 Current Members & Observers Tax administrations of Australia, Canada, Germany, Hungary, Netherlands, New Zealand, UK and US Other Governmental bodies: Denmark, Florida, Los Angeles, South Africa Adobe, HP, IBM, Microsoft, Oracle, Sap, Sun, Unisys Baltimore, BAH, Decisionsoft, FYT, IBFD, Republica, Software AG, Vertex, XBI, KPMG,PWC Mitre, XBRL international

7. September 2005 The Committee’s approach Not creating new standards but recommending and influencing existing ones. Vertical sector but not adopting end to end approach. Instead, is taking existing standards as horizontal components which can be packaged together as needed. In 2003 a Gartner symposium presentation (“XML: my how you’ve grown”) singled out the OASIS Tax XML Committee as a “formidable activity” It recommended an action item “XBRL and Tax XML will provide advantages to enterprises that use them; learn what they are and where they will be integrated in your reporting functions” “The Committee does not seek to define a “Tax XML” standard. Rather it will utilise and influence other XML standards and determine how they should be used by tax administrations within a common Tax XML framework designed to facilitate interoperability”

8. September 2005 Relationship with the OECD The OASIS Tax XML Committee and the OECD taxpayer services group are independent of each other but mutually supportive The OECD group provides members to the Committee and a forum to influence a much larger number of tax agencies. It provides tax specific knowledge and a business steer for future Committee work The Committee provides authoritative technical guidance to tax agencies on XML standards, influences their development and gives specific help to the OECD group in migrating OECD “standards” for inter-Governmental exchanges to open standards How is that reflected in the Committee’s output ……..

9. September 2005 XML Position Paper for Tax Administrations The Committee recently published V2 of ‘XML Position Paper For Tax Administrations’ Discussed at the OECD Taxpayer Services Group in September 2005 and unanimously endorsed with some minor suggestions which the Committee was able to accept and which were very quickly reflected in a V2.1 It explains the need for and benefits of using open standards for tax agencies, the software community and taxpayers; maps a strategic vision of the future; provides guidance on relevant standards and goes into extensive detail on the most important current issues

10. September 2005 Some key features of the Position Paper Recommends adoption of XBRL Supports the rapid development of XBRL GL specifically because of its importance to tax agencies in migrating the current Standard Audit File for Tax (the OECD and the Committee together persuaded XBRL International to advance development by nearly a year) Reports on and recommends continuing with existing work with UBL to provide a co-ordinated set of XML grammatical components that will meet tax as well as business requirements in a standardised way (especially important in the VAT/GST field) Recommends monitoring the development of CIQ and OAGIS for possible adoption Recommends the Committee assist the OECD with migrating its existing services to open standards the Committee is also looking at many other standards

11. September 2005 So what !!! - the HMRC perspective We are adopting XBRL; first implementation for company tax filing in October and we are sharing our experience of creating a tax specific taxonomy extension We are strongly supporting the rapid development of XBRL GL which would not have happened in the timescale without the joint OECD/Committee initiative We are investigating the use of CIQ We strongly support the Committee’s continuing work and especially its special relationship with the OECD

12. September 2005 So what !!! - the wider perspective Many tax agencies are still in the early stages of XML adoption. Without the Committee’s leadership they may invent square wheels to replace existing round ones At the OECD group meeting recently many countries said they had a critical dependency on the work of the Tax XML Committee The Committee can especially help ensure XBRL is adopted, positioned and extended consistently as it becomes prevalent in the financial reporting area The OASIS Tax XML Committee is not only about XML standards; it is about confidence and trust. Its collaborative approach with the OECD as well as individual country members ensures it is widely respected and influential with tax agencies for its relevance as well as its technical quality and the very latest news ………….

13. September 2005 Hot off the Presses The Committee met in Ottawa at the end of September Agreed scoping work on a possible standard audit file for payroll Agreed how to progress the partially assembled tax vocabulary Endorsed the XBRL GL tax audit file work so far Agreed to extend the indirect tax model to the Excise area Agreed to produce an implementation guideline focused on exchanging Certificates of Residence to help interested parties and understand the governance and maintenance issues And more …….