Timeline

Background

The Dutch government intends to reduce the administrative burden of businesses with 25 percent. One of the projects to realise this reduction is a joint effort of the Ministry of Finance and the Ministry of Justice to use eXtensible Business Reporting Language (XBRL). This Dutch Taxonomy Project will moderate en facilitate developments in certain financial reporting chains. Within the Dutch Taxonomy Project the Dutch Taxonomy will be drafted through several sub-projects, executed by stakeholders, to enable the drafting and provision of tax declarations, annual reports and economic statistics.

Introduction

The Dutch government intends to reduce the administrative burden of companies with twenty five percent. To realise this reduction one of the projects that was started is the Dutch Taxonomy Project(DTP). This project uses an open standard to help companies and their intermediaries to draft, check and supply financial reports more efficient.

What the Dutch Taxonomy Project did is to substitute for the 30 or 40 different reports that a typical company would have to do to different agencies, including outside groups like credit bureaus, and banks. Instead, they can file a single datafile that is all done with XBRL tags. And then all of the different reports that the different agencies do draw that data automatically from that single file.

Goal

The Dutch Taxonomy Project was started in May 2004. The project intends to standardize financial reporting information in the relation between company and government. The project focuses on the main causes of administrative burdens in financial reporting, annual accounts, taxes and financial statistics. The main goal of the Dutch Taxonomy Project is to facilitate the reduction of the administrative burden for companies. Facilitate as the actual realization is dependent of the cooperation of several stakeholders like the tax office, chambers of commerce and last but not least the company itself. A cost reduction within certain governmental bodies can be a secondary result, but this is not the focus of the project.

As the use of the Dutch taxonomy will be voluntary, DTP leave the final decision for reduction to the company. The company can decide to do things less efficient. If it decides to do so, this decision is for its own cost and risk.

The Dutch Taxonomy Project is a joint effort of the Dutch Ministries of Finance and Justice. The Ministry of Justice is responsible for the legislation concerning annual accounts in the Netherlands, the Ministry of Finance for the tax legislation. The project also works together with the Ministry of Economics and its governmental agencies.

Participants

The Ministry of Finance                  The Ministry of Justice

The Ministry of Economics            The Royal Institute of Registered Auditors

The participants in the Dutch Taxonomy Project include auditors, software suppliers, the Dutch accounting standards board, representatives of employers and representatives of governmental bodies (chamber of commerce, tax office and statistics Netherlands). Also contacts with other financial regulators took place.

Benefits

The  Dutch Taxonomy Project is expected to save reporting companies 25% of their compliance costs, and has already succeeded in reducing the number of reporting elements that companies have to keep of from 200,000 to 4,500.