iXBRL Consultations
47 – 49 Pearse Street, Dublin 2
Mr Brian Boyle
Principal Officer
Large Cases Division
Setanta Centre
Dublin 2.
30 May 2012
By e-mail to brian.boyle@revenue.ie
Dear Brian
iXBRL Consultations
I refer to our prior submissions in this regard, and our constructive meeting on 16 May last. We note in particular the revised prioritisation of the proposed iXBRL implementation of Corporation Tax and Income Tax computations. Because of the potential for far-reaching consequences of such a change, in the context of the revision of the Assessment rules, we welcome the focus on the accounts element of an iXBRL implementation rather than on computations. We also recognise that, from the early prototype system which you demonstrated at the meeting, Revenue is trying to identify and facilitate through ROS practical issues associated with the iXBRL filing process. This is encouraging.
It may be worth reiterating one of the points from our meeting, that any iXBRL implementation must be led by tax considerations – the risk management considerations of Revenue, and the compliance cost considerations of the taxpayers and those who act for them. The transformative potential of iXBRL will perhaps best be realised by dealing with this project first and foremost as a tax project. Other state agencies may wish to benefit from the innovation in the future, but to attempt to second-guess their requirements now might prejudice a smooth implementation for tax purposes.
We note that a further meeting has been scheduled for 5 June next, and we look forward to discussing with you in more detail the sequence for the introduction of iXBRL usage. We also undertook at our last meeting to put some points on paper in relation to the accounts verification process to help put a framework on future discussions. These are set out below.
E filing and Penalties
- Will the penalty for not filing correct iXBRL accounts be linked to the existing E filing penalty regime within the Taxes Acts?
- If there is an error (or delay) in filing iXBRL accounts, will a taxpayer be deemed not to have filed a complete and correct tax return on time? This would attract not only a surcharge but restrictions on the use of losses/group relief etc. Such restrictions are quite often much more serious than any surcharge.
- In the UK there is apparently no specific penalty for not using iXBRL; however if a return is filed on paper and isn't one of the few permitted exceptions, HMRC will reject it and request it be filed using iXBRL. The return will only be classed as received by HMRC if filed successfully using iXBRL.
Finalised Accounts
- What process is envisaged regarding accounts which are not finalised when the tax return is due? Are draft accounts permissible?
- Will it be possible to withdraw a draft and re-submit when the accounts are finalised?
- Will it be possible to withdraw an erroneous set of accounts (perhaps due to tagging mistakes) and resubmit?
Electronic Verification
- What are the verification checks that Revenue are planning on having at the initial reception stage?
- Where a set of accounts is rejected will there be a clear message explaining the reason for rejection, perhaps identifying the problem iXBRL tag or tags etc?
- Can we scope and publish the extent of cross checks between the figures in the financial statements and the Form CT1?
- Where a company has an accounting period for tax purposes that is different from the accounting date on the financial statements (e.g. in the case where a company commences or ceases to trade in the middle of the financial year etc.), will the verification checks allow this? Similarly can we describe the approach to be taken with long accounting periods?
I would hope that we might have an opportunity to give these areas some initial consideration at least at our meeting of 5 June. No doubt there will be other similar issues to consider as the project develops.
Yours sincerely
Brian Keegan,
Director of Taxation,
Chartered Accountants Ireland
Source: Chartered Accountants Ireland
www.charteredaccountants.ie