iXBRL Is Coming To Ireland Soon
The Revenue Commissioners have advised that tax returns are to be filed in iXBRL format. All business will need their financial statements to be formatted into iXBRL in order to be filed with their corporation or income tax returns.
iXBRL (inline eXtensible Business Reporting Language) is a language that allows the presentation of financial information in a computer readable format. This is done through the use of ‘tags’ known as ‘taxonomies’. All key data is assigned a ‘tag’ which allows it to be recognized by the computer software reading it.
Downside
iXBRL requires specific software to be used to prepare financial statements in this format. Additional time and training is required in order to prepare what is an additional set of financial statements for filing with the Revenue Commissioners. This means higher costs in preparing financial statements.
Manually tagging financial statements is a labour intensive task. Firms which use word or excel to produce financial statements will have additional costs of up to €10,000 for the larger companies in preparing financial statements in iXBRL format.
Certain accounts production software producers have designed software that will automatically ‘tag’ financial statements into iXBRL format. However, in order to achieve this, the formatting function has been significantly limited. The ability to produce bespoke financial statements that meet client desires for any changes in presentation of accounts within compliance requirements is therefore severely hampered.
Timeframe for implementation
- An option to file financial statements through iXBRL on a voluntary basis from November 2012 for corporation tax returns.
- An option to file financial statements through iXBRL on a voluntary basis from January 2013 for sole traders.
- A mandatory requirement for Large Cases Division (LCD) taxpayers to file financial statements through iXBRL from October 2013.
- A phased roll-out of iXBRL filing of financial statements for other taxpayers commencing October 2014.
- A mandatory approach to filing of tax computations using iXBRL to follow the above.
Summary
The implementation of filing tax returns will provide efficiencies for the Revenue Commissioners. However, additional time input and costs will be incurred by both tax payers and agents alike in order to meet the requirements of iXBRL filing of tax returns.