Certificate of Residence Pilot Project

Action Item Status

As of Conference Call July 14, 2004

Meeting Attendees:

Andrew WebberCanada Customs & Revenue Agency

Arndt LiesenOffice of Finance, Germany

Alex FiteniOracle

Michael RoytmanVertex

John GlaubitzVertex

Action Items:

  1. Obtain from the tax authorities the information required within each bilateral agreement to provide positive identification of a taxpayer (or beneficial owner).

Primary Responsibility: John Glaubitz

Status Discussion:

  • Arndt posted information regarding party identification within the EU Savings Directive.
  • Andrew posted CCRA documents for determination of residency that include an identification section.
  • The action item originally included providing information relevant to a claim. The team decided that the focus of the CoR pilot should be the taxpayer identification, residency identification and certification. The claim will still be discussed as a context for the CoR, but will not be a focus for detail analysis.
  • The primary messages that will be used as the context for this information are the application for certification to an authority and the certification of residency itself. The claim will be discussed as another document that may need to include a certification of residency to substantiate the claim.
  • A review of the identification data in the submitted forms highlights some data that may be useful but not required for identification such as telephone number. Some information also may be variable, such as marital status so that it may only be useful if it’s still accurate.
  • Tax Identification numbers, while a primary means of taxpayer identification, may not always be provided and if provided, may need additional taxpayer information to verify the Id.

Next Steps:

  • Complete an initial draft document and distribute to the committee.
  1. Create a list of use cases and associated models between two countries – Wages, Financial Instruments, direct claims, and inter-agency claims of the withheld and offset taxes.

Primary Responsibility: John Glaubitz

Status Discussion:

  • CCRA provided on-line link to forms.
  • It was identified that there could be application for a naked CoR (A message containing only the CoR without the context of another message such as a claim). This would be the case for the EU Savings Directive.
  • Some of the documentation available from IBFD on the existing Tax Treaties between the 3 target countries was reviewed for their discussion of taxpayer identification. The documents segregate the information by Resident and Permanent Establishment where the Resident is an individual and the Permanent Establishment is for an enterprise. It was discussed whether the scope of the CoR pilot included “residency” of enterprises as well as individuals. While most of the forms and other documentation submitted and reviewed to this point are geared toward individuals, it was determined that including enterprises would be an important aspect of the project.

IBFD Definition from on-line Tax Glossary:

PERMANENT ESTABLISHMENT (PE) Term used in double taxation agreements (although it may also be used in national tax legislation) to determine when a non-resident entrepreneur is taxable in a country; that is, an enterprise in one country will not be liable to the income tax of the other country unless it has a "permanent establishment" through which it conducts business in that other country. The concept of permanent establishment defines the requisite level of presence and contacts in a country to support income taxation at source. A permanent establishment is usually defined as a place of management, a branch, an office, a factory, a workshop, a mine, a quarry or other place of extraction of natural resources, or a building site or assembly project which exists for more than a certain period (6 to 12 months) and in certain circumstances an agent or permanent representative. The definition usually excludes the use of facilities solely for purposes of storage, display or delivery of goods belonging to the enterprise and other similar restrictions.

Next Steps:

  • Complete an initial draft document and distribute to the committee.
  • Determine forms used for analysis and post forms to Kavi.
  • Arndt and John will ask tax professionals their interpretation of Resident vs. Permanent Establishment.
  1. Formalize Tax Vocabulary process and bring the CoR terms into the repository and reconcile terms.

Primary Responsibility: John Glaubitz

Status Discussion:

  • Arndt identified site for IBFD lookup feature and whether it’s available for general use.
  • Michael provided CCRA access to On-line Repository.

Next Steps:

  • Document the Tax Vocabulary process
  • Investigate and reconcile CoR terms
  • Michael to provide Arndt access to On-line Repository.
  1. Compare STF terms and the Tax Vocabulary.

Primary Responsibility: Arndt Liesen

Status Discussion:

  • Arndt may not be able to address this action item until September.

Next Steps:

  1. Prepare Naming and Design rules to ensure consistency in the analysis and modeling process.

Primary Responsibility: Alex Fiteni

Status Discussion:

  • OASIS UBL name and design rules are being reviewed and appear to cover most of what TaxXML would require. Consistency with OASIS committee work may be desired, however some other OASIS committees have not followed consistent rules.
  • Handling Jurisdictional differences may be a major consideration in how naming rules are applied.
  • Rule will be reviewed for Usability and Extensibility
  • Initial observation of OAGIS standards indicates that that may be more canonical and more appropriate for establishing vocabulary rather than naming.

Next Steps:

  • Andrew will determine whether CCRA Name and Design rules would be sharable
  • Alex will determine whether OAGIS has rules that may be appropriate.
  1. Review the CIQ in the context of the CoR.

Primary Responsibility: Michael Roytman

Status Discussion:

  • A working draft of v3.0 of the eXtensible Name Language xNAL of CIQ is due to be posted shortly.
  • One aspect of the new design is that the schema has been broken down into sub-components to make it easy for organisations/end users to implement the specs by picking up the components they need. The components are categorized according to the complexity of name representation. This may address some of the usability issues identified in our current analysis.
  • The CIQ address structure, which is much more complex, will be the next to be re-designed.
  • The chairman of the CIQ TC has indicated an interest in working with TaxXML to address any issues.

Next Steps:

  • Document the findings of the CIQ analysis
  1. Develop CoR Pilot Project Charter

Primary Responsibility: Alex Fiteni

Status Discussion:

  • Initial and incomplete draft of a CoR project charter prepared by John forwarded to Alex for further development

Next Steps:

  • Complete draft of charter and submit to TC for review.