FPS Finance: Corporate Tax Moves into the Moden Era

Electronic tax filing has become the norm for most Belgian companies since the 2005 debut of VENSOC, the country’s first automated corporate tax reporting application. Now, a totally new application called BizTax offers companies an improved system that is feature-rich, more secure and serves a wider range of purposes.

Working in conjunction with a team from CSC, the IT department of FPS Finance designed new features into BizTax to improve the filing process for businesses. Where previous returns were submitted on paper or PDF, the BizTax eXtensible Business Reporting Language (XBRL)-based solution enabled companies to switch to an all-electronic process. The new system goes even further, allowing companies to establish a direct connection between their own accounting systems and BizTax.

Companies can now temporarily store data in the BizTax system as well. This improved process eliminates redundant data while allowing companies to make adjustments before finalizing and submitting a tax filing. Two-thirds of Belgian businesses have used the system since the upgrade in 2011.

BizTax was developed with XBRL, a technology in use throughout the financial services industry. Most often used for report generation, XBRL is capable of much more as the BizTax application demonstrates.

Louis Collet, CIO at FPS Finance says XBRL was a good fit. “We’re one of the first tax administrations to use XBRL for tax returns,” Collet says. “We chose XBRL because it is a future-oriented technology. It also enables us to align with other systems, for example, what has already been implemented by the National Bank for collecting financial statements from companies in XBRL format.”

More safeguards, increased security

Each return filed online is subject to a series of automatic verifications. This step improves the submission process for both companies and FPS Finance. Issues flagged by the system such as improper syntax or missing information can be caught and corrected by a company prior to filing, eliminating the need for extensive verification by FPS Finance staff. This assures the company its filing is complete, accepted and validated, reducing chances the return will need to be modified later.

The process for annex filings related to returns has been extensively revised. Any annexes filed for a return are submitted in the same XBRL format and integrated into a single file, a feature Collet thinks will save a great deal of time. “This avoids the usual delays and risks associated with double data collection,” Collet says. “All electronic documents that we receive can be used immediately which considerably accelerates processing.”

Security of the filing process has been significantly improved. Filing party authentication and document signing can now be done via Class 3 electronic certificates and eID. In addition, Collet says a proof of receipt signed by FPS Finance is automatically generated by the system.

Further improvements coming

Work is nearing completion on enhancements to the BizTax back-office system that will further reduce handling and boost efficiency. The connection between corporate systems and automatic reconciliation with the financial statements database of the National Bank promises to create significant time savings. In addition, electronic files that document the state of a company, such as movements in equity accounts, reserves, etc., will be grouped together in a single file. This simplifies the reporting and research process for everyone.

Completing and updating these documents will be done automatically via direct information exchange with other elements in the company’s master file. The integration process will encompass the entire handling process from filing to including entries in the tax register.

This dramatically reduces the amount of information and the number of steps companies will need to manage. For example, companies will no longer need to provide financial statements to FPS Finance. These will now be available directly from the National Bank in the same format used by FPS Finance.

Also in 2012, the electronic filing procedure was extended to include returns for non-resident businesses (INR/Soc) and all other types of legal entities. This will capture up to an additional 200,000 tax returns that were previously filed on paper.

New way of working

Working in partnership with CSC, FPS Finance chose to implement direct generation of screens in the BizTax system, based on a taxonomy created by FPS Finance experts. Collet says this approach makes the system more future proof. “This means if the tax regulations, the law and the taxonomy all evolve, the BizTax application will follow automatically,” Collet says.

Philippe Jacquij, Administrator for Large Companies at FPS Finance says this approach means “it will no longer be necessary to redefine the template for tax returns from scratch. We’ll be able to base our new forms on the return used the previous year and then carry out modifications. We’ll reduce the time needed to adapt and increase our responsiveness.”

Jacquij also notes the system has been designed to enable a wider range of people to help keep the system up to date. Taxonomies can be adapted and managed by business analysts, a task previously reserved for IT experts.

“Calculating taxes was only possible for people highly-skilled in the use of complex, often custom-built, software packages. Now after acquiring certain competencies, business analysts will be able to handle this task,” Jacquij says. “And by increasing the number of people able to handle the task, we’re able to guarantee greater stability of the process without being concerned we might one day lack the internal competencies.”

In addition to tax return filing, prevalidated dossiers that result from the new system improve verification, fraud monitoring and risk analysis. Collet says this cleaner data is helping FPS Finance improve in other ways. “In the past we were forced to base our findings on previous filings or on ‘behaviors’ to detect risks. Now thanks to richer and more complete filing databases, the robustness of risk analysis has increased,” Collet says. “We’ll be able to take more rapid and concrete action on the filings of the current year already underway.”