47 – 49 Pearse Street, Dublin 2

Mr Brian Boyle

Large Cases Division

Office of the Revenue Commissioners

Setanta Centre

Dublin 2

By eMail to brboyle@revenue.ie

21 November 2012

Dear Brian

iXBRL – Taxpayer Incentives

I refer to our on-going engagement on the implementation of iXBRL under the TALC iXBRL subgroup; particularly our discussions concerning taxpayer incentives to use iXBRL. I set out in this letter detail of CCAB-I's proposal for incentivising taxpayers mandated to file iXBRL accounts with Revenue.

iXBRL Engagement

CCAB-I are encouraged by the progress made by the iXBRL subgroup to date; particularly we acknowledge that the mandatory use of iXBRL was pushed back until October 2013 for LCD taxpayers and that the original proposal to extend iXBRL filing to corporation tax and income tax computations has been revised so that filing in iXBRL is confined to accounts only. Also welcomed is the clarity provided by Revenue on a number of iXBRL matters through the publication of FAQs and other guidance material and the roll out of the optional iXBRL filing facility on ROS.

However, we are concerned that Revenue has yet to announce or publish details of the incentives for taxpayers filing in iXBRL. Throughout our engagement with you and your colleagues on iXBRL we have consistently called for a better balance between the immediate benefits of iXBRL filing for Revenue and the taxpayer. This is because, in our view, the iXBRL transition for many taxpayers and agents represents little other than additional compliance costs and administrative burden in times where there is already pressure on compliance fees and business overheads. There is little incentive or recompense for taxpayers and agents.

On the other hand, and according to Revenue's own press statement, receiving financial statements in iXBRL has the “potential to shorten processing and turnaround times for matters such as repayment claims and also to enhance Revenue's capacity to accurately assess and eliminate risks, potentially reducing the need for intrusive Revenue audits or other interventions for the great majority of compliant taxpayers”. It is clear that the immediate benefits of iXBRL filing will be realised by Revenue, rather than by taxpayers and this imbalance must be addressed before iXBRL filing becomes mandatory.Unlike in other territories such as the UK, iXBRL is not currently used to satisfy any other official compliance requirement. The migration of accounting systems to iXBRL compatibility, or where that is not possible the tagging of accounts to iXBRL standards, is solely a tax compliance cost without any other immediate regulatory compliance benefit for many of the taxpayers concerned.

CCAB-I Proposal

Taxpayers, and their agents alike, value certainty in their tax affairs. Such certainty is achievable once the period for which Revenue can look back over the taxpayer's tax affairs has ended. The time limit for which Revenue can raise assessments on the taxpayer is currently four years as provided for under sections 955 and 956 and the new provisions under section 959AA of the Taxes Consolidation Act 1997.

You may recall at the time the Revenue Online Service was introduced in 2001, as a way of encouraging an uptake in the number of returns filed electronically, Revenue recommended a reduction in the then time limit of six years to four years. In this regard, I refer to an extract from the Tax Briefing Issue 46 in December 2001:

What is the Position Regarding Revenue Audits?

We have been asked to consider reducing the current six-year time limit in which Revenue may carry out an audit particularly in the case of returns filed through ROS. (Section 956 TCA 1997). Subject to the following conditions Revenue is prepared to look favourably at recommending a reduction in the period of six years, specified in Section 956, to four years.

Based on this precedent, in the case of taxpayers mandated to file iXBRL accounts, we propose that the current four year time limit as provided for by section 959AA of the Taxes Consolidation Act 1997 be reduced to one year from the end of the year of assessment. We believe that this reduction in the period for which Revenue can make or amend assessments on the taxpayer will provide greater certainty and consequently be a valuable incentive for taxpayers and their agents filing iXBRL accounts.

If Revenue believes that it is not in a better position to support such a recommendation as a consequence of the migration to iXBRL, we would have to question the extent to which iXBRL will enhance Revenue's capacity to analyse and make judgement calls on the acceptability of the filings received.

Implementation of Proposal

As you will be aware, a subgroup of Main TALC is currently reviewing the practical implementation of the self-assessment provisions as introduced by section 129 and Schedule 4 of Finance Act 2012. We believe this review provides a window of opportunity to legislate for a reduction in the four year time limit in which Revenue can raise assessments to one year from the end of the year of assessment in the case of taxpayers mandated to file iXBRL accounts.

We look forward to discussing our proposal with you and continuing our engagement through the TALC forum on the development and implementation of iXBRL. For good order, I am copying this letter to your colleague Gerry Harrahill as Chair of Main TALC.

Yours sincerely

Brian Keegan

Director of Taxation, Chartered Accountants Ireland

cc Mr Gerry Harrahill

Source: Chartered Accountants Ireland. www.charteredaccountants.ie.