DG TAXUD/B1 / Contract : DI 02411-00 SA106
Technical Assistance / Ref: 08664-401/TI.01.01/HR 05 IB FI 02 Annex 4
Interoperability Implementation Strategy - Suggested approach for the Croatian Tax Administration

Interoperability Implementation Strategy
Suggested approach for the Croatian Tax Administration

FEB 2005

Table of Content

1INTRODUCTION

1.1Background

1.2Abbreviations

1.3Contacts

1.4National Strategy and Planning Documents

2PROgramme SCOPE

2.1Overview

2.2Assumptions & Warnings

2.2.1Assumptions

2.2.2Warnings

2.2.3High Level Objective – Suggested Approach

2.3Overall Scope

2.3.1Interfaces with DG TAXUD – Current situation

2.3.2Interfaces with other systems

3Organisation

3.1Suggested Overall Strategy

3.2Management Structure

3.2.1Introduction

3.2.2Overall organisational structure

3.2.3Project Generic Structure

3.2.4Project Structure for CCN/CSI

3.2.5Project structure for VIES

3.2.6Project structure for VAT on e-Services (VES)

3.3Roles and Responsibilities

3.3.1Steering Committee

3.3.2Interoperability Programme Director

3.3.3Project Owner

3.3.4Quality Manager

3.3.5IT Manager

3.3.6Contract Manager

3.3.7Project Manager(s)

3.3.8Responsibilities of the IT Project Team

3.3.9Responsibilities of the Business Project Team

3.4Project Phases

3.5Project Deliverables

3.5.1Pre-Study Phase

3.5.2Tender Process Phase

3.5.3System Specification Phase

3.5.4Design Phase

3.5.5Build and Test Phase

3.5.6Running In and Maintenance Phase

3.5.7Main Project Deliverables and Responsibilities

3.6Communication and Reporting Structure

3.6.1Progress Meetings

3.6.2Reports

4Interoperability implementation plan

4.1Dates Assumptions

4.1.1Target Date (see section 2.2.1)

4.1.2DG TAXUD Requirements

4.1.3Decisions

4.1.4Test Platform Availability

4.2Time Schedule

4.2.1CCN/CSI

4.2.2VIES & VES

4.3Ressources Estimation

4.3.1CCN/CSI

4.3.2VIES & VES

5Annex

5.1Global Planning

1INTRODUCTION

1.1Background

The overall objective of this suggested approach to developing an Interoperability Implementation Strategy (IIS) is to describe the main characteristics of the Interoperability Programme, suggest a framework and specify the requirements to achieve successful project implementations.

The specific objectives of this document are to:

  • Propose the scope and objectives of the Interoperability Programme;
  • Suggest a description of the organisation of the projects and a definition of the roles and responsibilities of the participants;
  • Estimate timescales and resource requirements;
  • Suggest/provide examples of strategies that could be developed;
  • Suggest ideas to assist the Tax Administration to improve its existing strategies in relation to Interoperability.

It must be clear that:

  • It is not DGTAXUD’s responsibility to produce the Interoperability Implementation Plan for a Candidate Country. This document is provided for information/example only (best practices, based on project management principles and techniques) and is issued to assist the Croatian Tax Administration in defining its own projects and activities but it is up to Croatia to decide on its own approach.
  • Preparations for EU Accession are entirely under the responsibility of the Candidate Country.
Remarks

The term “Interconnectivity” might be seen as focusing on the IT interfaces and IT requirements only while the term “Interoperability” has been used in this document to stress the following points:

  • The business aspects, which are sometimes essential (for example for VIES: CLO, …), have been taken into account (legislation and procedural changes, training, trade awareness, …);
  • The projects described are not dedicated only to the IT interfaces but also to the national business and operational requirements.

However, only the activities directly linked to the Interconnectivity Projects are described but other activities should be also envisaged:

  • Tax Audit System;
  • Audit of Traders’ computers;
  • …

1.2Abbreviations

Abbreviation / Full description
AFIS / Anti- Fraud Information System
AP / Application Platform
API / Application Programming Interface
CC / Candidate Country
CCD / Croatian Customs Directorate
CCN / CSI / Common Communications Network / Common Systems Interface
CCN / TC / Common Communications Network / Technical Centre
CFCU / Central Financing and Contract Unit (ex PMU: Phare Management Unit)
CLO / Central Liaison Office (for VAT matters)
DBA / Database Administrator
DG TAXUD / European Commission Directorate General responsible for Taxation and Customs Union
DDS / Data Dissemination System
See:
DTI / Direct Trader Input
EC / European Commission
EDI / Electronic Data Interchange
EU / European Union
FITS / Fiscalis Information Technology Services
IOC / Initial Operation Capability
Term used by DG TAXUD/A3 when one of its system is ready for operation, waiting for the first Member States readiness.
IIS / Interoperability Implementation Strategy
IT / Information Technology
ITT / Invitation To Tender
MEI / Ministry of European Integration
MoE / Ministry of Economy / Trade
MoF / Ministry of Finance
MS / Member State
MSA / Member State Administration
NETP / Non Established Taxable Person (for VES)
PAA / Pre-Accession Adviser (either from a Twinning or directly contracted)
PID / Project Initiation Document
PM / Project Manager
PPF / Project Preparation Facility
EU Funds available for the preparation of Project Fiches or Terms of Reference
PQP / Project Quality Plan
QA / Quality Assurance
RTA / Resident Technical Adviser
SCAC / Standing Committee on Administrative Co-operation (for VAT)
SCIT / IT sub-committee of the SCAC
SQP / Specific Quality Plan
TEMPO / DGTAXUD Electronic Management of Projects Online
ToD / Turnover Data (for VIES)
ToR / Terms of Reference
VES / VAT on e-Services
VIES / VAT Information Exchange System

1.3Contacts

For any information or comments on the present document please contact:
Patrice Pillet, DG TAXUD Unit B1 (Phone +32 2299 19 93, email ) or
Michael Doering, DG TAXUD Unit B1 (Phone + 32 2295 38 59, email ).

1.4National Strategy and Planning Documents

A number of strategy and planning documents should already exist in the Croatian Tax Administration (light grey on the diagram) e.g.

  • Business and IT Strategies;
  • Business Plan;
  • Business Change Management Plan;
  • CARDS or Phare Project Fiches.

The following diagram describes the relationship between the existing documents, the national Interoperability Implementation Strategy (IIS) and the following Project Initiation Documents (PID), Terms of Reference (ToR) & Project Quality Plans (PQP) for the Interoperability Projects.

2PROgramme SCOPE

2.1Overview

As a result of the first Interoperability Mission in Croatia, carried out by DGTAXUD B1 in October 2004, it became apparent that there was little knowledge within the Croatian Tax Administration as to the requirements for EU Interoperability and the volume of work to be undertaken to achieve Interoperability may have been underestimated.

This document has been produced in order to assist Croatia to achieve Interoperability in time for the accession to the EU. It is intended as a generic Interoperability Implementation Strategy (IIS) to be adapted by the Croatian Tax Administration to develop its own National Interoperability Implementation Strategy based on the current in-country situation and decisions. Following the development / adaptation and acceptance of the IIS by the national administration, separate projects should be established and project teams set up to implement the projects.

2.2Assumptions & Warnings

2.2.1Assumptions

Certain assumptions have been made in the preparation of this document:

  • The average IT Interoperability project duration in the new EU Member States was four years. Therefore, this document considers 01/01/09 as target/working date for deploying the existing EC Taxation IT Interconnectivity systems in Croatia. This does not anticipate any target date for Croatia's accession to the EU, which has to be defined in the accession negotiations yet to be started.
  • The Tax Administration is fully committed to accession to the EU and has included Interoperability in its Business Plan and Business Change Management Plan.
  • The required financial and human resources will be made available by the senior managers of the Tax Administration, including the provision of full time personnel for the project teams.
  • The Implementation Plan has been drafted upon the anticipation that the Croatian Tax Administration will take the maximum advantage of the “supposed to be available” and “supposed to be requested” CARDS and Phare pre-accession funds. Should these funds not be requested or available, or should Croatia consider a (partial) financing of the listed EC co-financed activities from national funds, the suggested plan should be redrafted.
    In this context it needs to be highlighted that due to the strict CARDS, Phare and PRAG rules, a practical implementation of activities under CARDS 2004 is unlikely to start before September 2005. In comparison to the new EU Member States and the EU Candidate Countries 2007, it needs to be declared that significant financial envelopes for pre-accession funds in the area of Croatian Taxation IT Interoperability are lately available. Activities could start earlier if national resources or additional resources under bilateral agreements between Croatia and EU Member States (funds and/or staff) are available.
  • TEMPO is used as the basis for the Project Management Methodology. However, this methodology has been developed as an ideal reference for the management of IT projects being implemented within the DGTAXUD organisation itself (although this is not always strictly applied). Therefore, it is suggested that Croatia may use it as the basis for their national project management but will need to adapt it and/or extract sections to best suit their own requirements. It is, of course, Croatia prerogative to project manage their national projects as they wish.
    It must also be clear that Croatia will not receive any DG TAXUD support related to this methodology.

2.2.2Warnings

  • Whilst DGTAXUD is continually updating the systems and introducing new technology (CCN Mail 2, VIES 2, …), Croatia should maintain a close relationship with DGTAXUD to ensure that they are developing implementation plans based on the most recent system development of DGTAXUD. Participation in the Fiscalis 2007 Programme is strongly recommended (when open for Croatia).
  • Until the signature of the EU accession treaty, Croatia will not necessarily be invited to all working (and certainly not to policy) groups for all the systems and should maintain bilateral and multi-lateral links with Member States to ensure that they keep up to date with other national developments. In this context, Twinnings with EU Member States are priceless.
  • CARDS and Phare EU co-financing can only be regarded as “Additional Funds” to decrease the pressure on the national budget, by which the Candidate Country has to ensure full alignment to the “acquis communautaire” prior to EU accession.
  • The human and financial resources estimated in section 4.3 are extremely dependent on the actual in-country situation and the systems development path adopted. They must be adapted during the pre-study phase of each project.

2.2.3High Level Objective – Suggested Approach

The high level objective of the Interoperability Programme can be defined as,

“The development and implementation of national systems required by the Croatian Tax Administration to connect with the EU IT systems to enable the exchange of information between the EC and EU Member States immediately upon accession to the EU.”

The suggested approach to achieve this overall objective is for Croatia to develop its own national IIS which will be relevant to the current situation and from which individual projects will be established, project teams created and project plans developed to implement the relevant systems in time for accession to the EU.

This generic IIS will assist the Croatian Tax Administration to:

  • Identify the projects that remain to be established;
  • Identify the resource requirements for each project;
  • Identify the funding requirements for each project;
  • Identify the timescales for each project;
  • Assist in preparing project plans for the individual projects;
  • Identify which current national projects should be modified to satisfy the Interoperability requirements.

2.3Overall Scope

2.3.1Interfaces with DG TAXUD – Current situation

DG TAXUD has identified several systems that require Interoperability by the date of accession:

  • CCN/CSI: this gateway is mandatory for the communications between the DGTAXUD IT systems and their Member States counterparts. DGTAXUD and DG ENLARG together with the Phare Committee have so far agreed to provide and pay for the CCN/CSI gateways.
    For Croatia, the CCN/CSI gateway (installation and operational costs for the Community domain) will be funded by the Customs 2007 Programme.
    As a single (operational) gateway will be installed in Croatia, the definition of the national responsibilities is essential. The back-up gateway will be installed in Brussels.
  • Savings Tax System: The "savings directive" (Directive 2003/48/EC), which will enter into force on 01/07/2005 (under Council decision 2004/587/EC), has created the need for an exchange of information between Member States. This exchange should take place at least once a year. The way this exchange of information will take place in practice (through bilateral exchanges or via a Community systems like CCN-Mail) is however still undefined at this stage.
  • VES: The VAT on e-Services system is quite simple and independent from other Tax systems. Its functionality should be re-examined by the MS before 01/07/2006 together with its possible (likely) prolongation.
  • VIES: DGTAXUD recommends focusing on VIES Phase 5 (suppression of the dedicated VIES gateway and direct access to the CSI API).
    In all cases, an important effort is foreseen for the development of the VIES national system and even more for the related business activities (setup of the CLO, …).
    The VIES 2 feasibility study is expected to be submitted to the SCIT sub-committee by February 2005. Currently, there are no IT development or implementation plans for VIES 2; these will be finalised dependant on SCAC mandate (expected Q3 2005) and decision as to which aspects to proceed with and when (priority) i.e. B2B One-stop-shop, VAT on services, quality of VIES data or exchange of forms.

2.3.2Interfaces with other systems

While developing the final systems, due consideration should be given to interfacing with a number of external but related systems. These may be considered under the following headings:

Trade interfaces

When appropriate, the following trade interfaces should be developed:

  • Direct Trader Input (DTI);
  • Electronic banking;
  • Public Internet web sites.
Other National Systems

Tax Administration currently provides or receives information from a number of different government agencies/institutions. The intention should be, wherever feasible, to create interfaces with these bodies. Such bodies could include:

  • Ministry of Finance;
  • Customs Administration;
  • National Statistical Institute;
  • Ministry of Economics / Ministry of Trade and Industry;
  • Ministry of Internal Affairs;
  • Ministry of Transport;
  • National Bank;
  • And others.
Other EU Systems
  • AFIS (OLAF);
  • …

3Organisation

3.1Suggested Overall Strategy

It is important for the success of the Interoperability programme not to underestimate the scope of work required to interoperate with the EU IT systems involved upon accession to the EU. New Member States are expected to exchange information with the EC and other Member States on day one of accession. Due to the ambitious plans of the Croatian Government to join the EU as soon as possible, a relatively short time period might only be available to develop and fully deploy the various IT Interoperability systems. Therefore, it is imperative that a proper Interoperability Programme and project management structure is established from the outset and that adequate full time human resources and financial resources are made available to enable implementation of each of the projects. The suggested overall strategy is to establish full time project teams, who will be responsible for the implementation of the projects within the Interoperability Programme.

It is suggested to establish a Steering Committee for all Interoperability projects i.e. CCN/CSI (including CCN-Mail 2), VIES & VES.

The position of the Project Owner should be established for each project and will be responsible for project co-ordination as well as for communication with the Programme Director. He should come from a User Department (usually Head of Department or Deputy Head of Department).

It is suggested to establish a Project Team for each project who will be deployed on a full time basis for the duration of the project implementation. Each project team should consist of two experienced Project Managers i.e. one IT Project Manager and one Business Project Manager who will lead two “sub” teams, one IT team and one Business Team consisting of IT and business/functional experts for the given business areas.

It is important to the success of the individual project that Project Managers and Team Members are employed full time by the project for the duration of the project implementation period. The scope of work required for each project is significant and the utilisation of internal experience is essential. Past experience has shown in many administrations that projects fail to meet timescales and deadlines if Project Managers and Project Team Members have to divide their time between project tasks and normal day-to-day duties.

3.2Management Structure

3.2.1Introduction

This section of the Interoperability Implementation Strategy describes the suggested structure to be implemented to manage the planned development activities. This structure may well change during later stages of the programme, particularly as development work decreases and the systems move into a maintenance phase. It must be adapted by Croatia to meet the national situation and requirements.

3.2.2Overall organisational structure

The diagram below depicts the overall organisational structure for the Interoperability Programme for the Tax Administration.

Remarks
  • The highlighted entities are external to the Tax Administration. It is an option, in order to gain experience, that the VIES IT Teams are managed by the external Contractors (integrated teams) and therefore these entities were highlighted as well (see sections Errore. L'origine riferimento non è stata trovata.3.2.5).
  • Both Administrations should also be involved in the CCN/CSI Project.

3.2.3Project Generic Structure

The generic structure suggested hereafter must be adapted to the specificity of each project.

Diagram
Remarks
  • One-way arrows () are used for hierarchical links and two-way arrows () for communication channels; the external entities are highlighted and the dashed lines are optional;
  • The external bodies are banks, trade associations, other Ministries, ...
  • The “Roles and Responsibilities” are described in section 3.3;
  • The responsibility of the contract management may be attributed to a separate section (Contract Manager), to the Project Owner or to the Head of IT Department;
  • Another solution is to create a “Co-ordination Unit” (not represented on the above diagram but selected solution for the following project-specific diagrams) working directly to the Programme Director with the overall responsibility for the horizontal issues of the programme (Contract management, Quality management, Training, ...);
  • The Quality Manager and IT Manager roles can be assumed by a sole person or a Quality Manager can be externally contracted;
  • An external Project Adviser/consultant could be appointed to provide advice and recommend actions based on his previous experience or it could be the “Resident Technical Adviser” of a Twinning Project;
  • Multiple project teams could be defined for the different sub-projects: on a functional basis but also on an organisational basis (hardware, training, deployment, web site, Traders Interface, ...);
  • The IT Project Manager must liaise with the CCN/CSI Project Manager for the configuration of the CCN/CSI gateway (or the CSI developments);
  • A Project Quality Manager should be appointed either as a Project Manager Deputy or as a Contractor’s Project Manager Deputy (recommended).

3.2.4Project Structure for CCN/CSI

The CCN/CSI is a ready-made (except configuration), purely technical system and therefore this project will probably not be very demanding on resources.