In Germany, all companies with double-entry accounting must submit – most likely for all fiscal years starting after 31 December 2011 – an E-Tax Balance Sheet in a standardized data format (“taxonomy”) as an appendix to their electronic company tax return. (Alternatively, companies may submit an electronic book/tax schedule.) In a circular dated 19 January 2010, the Ministry of Finance (MOF) defined eXtensible Business Reporting Language (XBRL) as the mandatory technical format for all related electronic data transmissions. As from fiscal year 2011 (i.e. 1 January to 31 December 2011 for calendar year taxpayers), all company tax returns also must be submitted electronically. No changes are planned for tax assessments, which will continue to be issued in hard copy.
On 30 August 2010, the MOF released a first discussion draft for the general taxonomy applicable to most companies (other than industries subject to special accounting rules and regulations). The XBRL taxonomy is a hierarchically structured tax data scheme, comparable to a model chart of accounts, which can be viewed electronically in English: http://www.abra-search.com. The original draft would have required considerable additional compulsory tax information not available in standard charts of accounts used for financial accounting purposes, and the MOF conducted a voluntary trial on XBRL from 1 February through 30 April 2011.
The MOF published first drafts of special taxonomies for banks and insurances and special and complementary taxonomies (applicable to certain other industries subject to special accounting rules and regulations) on 22 June 2011.
On 1 July 2011, the MOF released a revised draft of the general taxonomy, and held a second hearing with interested parties on 16 August 2011. The outcome of the hearing is as follows: following the trial period, the MOF will reduce the number of mandatory fields, more summary fields (“for calculation purposes if available”) and more flexibility to those fields will be available and more transition periods will be granted by the MOF. However, the MOF will not defer the starting date by another year (i.e. the first-time application for most taxpayers will still be for all fiscal years starting after 31 December 2011).
Even though the taxonomy drafts are not yet final, all companies should use the remainder of 2011 to review their readiness for the E-Tax Balance Sheet and should plan to address changes to software, accounting systems, charts of accounts and internal processes by 31 December 2011 (or the end of fiscal year 2011/2012 for companies with deviating year-ends).
Deloitte Germany can advise on all E-Tax Balance Sheet questions and can offer practical solutions for technical issues (including support for mapping charts of accounts to the taxonomy).
If you have any questions or if you wish to receive a more detailed updated E-Tax Balance Sheet flyer, please contact the authors of the article at gtln@deloitte.de or your regular Deloitte contact.
