Standard Transmission Format - STF Informal Review

Version 1.1

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Review limited to stfdirect schema and associated documents. The STF Direct review was broken into two tasks:

XML Design review : Being worked on by MITRE.

(On going exchanges with OECD’s Dr. Arndt Liesen).

Business Context review: Will be completed with IRS.

This presentation contains concepts and observations about STF Direct discovered as part of the on going review process.

This review is being done as part of the advisor role MITRE has with the IRS.

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Background

STF is part of the OECD ‘Standards on Exchange of Information in Taxation’ (SEIT) framework.

Evolved from ‘Standard Media Format’ (SMF)

STF is being built to provide a extensible XML standard for tax administrations to exchange tax information. See: Article 26 of the OECD Model Tax Convention

stfdirect is the first message schema which will be built in the framework of the STF standard. STF is a work in progress!

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Level 1 (Media) Abbreviation SMF (media and media transmission part) SMF-T - “T” for tapeCDRom/DVD transmission STM-CD or - “STM” for Standard Transmission

STM-DVD MediaTransmission by (electronic) File Transfer STM-FT - to be formulated in the futureTransmission by SOAP STM-SP - to be formulated in the futureTransmission by e-Mail Attachment STM-EM - extracted from the pilot

cat3 transmission description

Level 2 (Encryption)PGP Encryption via GnuPG STE-PGP - (“STE” for Standard Transmission

Encryption, the addition of PGP provides the possibility to distinguish – in future- between PGP and other methods of encryption)

Level 3 (Content Formatting)SMF record layout SMF-RL - the existing format in use for direct taxation,

should not be recommended for new applications, to be migrated to STF asap

Family of STF XML schemas STF -(Standard Transmission Format) – extensible for all purposes

Category 3 admitted types CAT - (Category-3 Admitted Types used in the pilot – presently RTF, PDF, TIF)

Level SEIT - OECD Standard for Exchange of Information in Taxation 3 - content format SMF-RL*) STF CAT 2 - encryption STE-PGP

physical electronic 1 – media***) SMF-T**) STM-CD {STM-DVD} {STM-FT} {STM-SP} STM-EM

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XML Design

Design Strategy:

Being built as a XML standard for all tax information exchanges between tax administrations of different OECD countries.

Designed to exchange pertinent tax information not tax forms between tax administrations .

Design of business roles/objects (e.g. party, amount) is highly generalized and configurable.

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XML Implementation:

Uses complex types to define business roles, objects and transaction set formats:

MessageSpec_Type STF_Direct_Type Party_Type PaymentData_Type DocSpec_Type

Each party within a STF Direct transaction (e.g. beneficial owner, tax payer) is derived from the same set of elements (Party_Type).

Tiered schema for easier administration.

Currently uses a transaction data set format consisting of two parts : 1. MessageSpec – transaction header2. STF_Direct – transaction record set

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XML Implementation:

stfdirect Schema

stftypes Schema

oecdtypes Schema isotypes Schema

STF Direct specific entities (e.g. PaymentData, ActualPayer)

STF complex types (e.g. Party_Type, PaymentData_Type)

OECD specific types (e.g. PaymentType) ISO specific types (e.g. CountryCode)

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XML Implementation:

STF_OECD

STF_DIRECT

MessageSpec

Contact

MessageRefId

Warning

TaxYearList

RecipientBeneficialOwner

RecipientAgentOrIntermediary

DocSpec

PaymentData

OtherInfo

PayerAgentOrIntermediary

ActualPayer

PayerAgentOrIntermediaryCh

Sq

- Party_Type

Sq

Sq

Sq

Sq - Sequence

Ch - Choice

- optional

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XML Implementation:

Party_Type

Address

Name

NameFree

CountryCode

ResCountyCode

PartyId

PersData

Ch

AddressFree

Sq

AddressFix

AddressFree

Sq

NameFix

NameFree

Ch

Sq

Sq

Sq - Sequence

Ch - Choice

- optional

Street

CountrySubentity

BuildingIdentifier

SuiteIdentifier

FloorIdentifier

DistrictName

POB

PostCode

City

PrecedingTitle

Title

FirstName

MiddleName

NamePrefix

LastName

GenerationIdentifier

Suffix

GeneralSuffix

Sq

Sq

STF Informal Review

NameFix was tailored after the CIQ type for names (with a certain amount of simplification, as OECD was afraid to loose acceptance by a structure of too much generality – this was also the reason for not taking the CIQ address type as a template for STF)

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RecipientBeneficialOwnerParty_Type

ResCountyCodePartyIdName

NameFree/NameFixAddress

CountryCodeAddressFree/

AddressFixPersData

Recipient Beneficial Owner party of stfdirect. The recipient beneficial owner is the person (legal person or individual), resident of a contracting State, that is entitled to the income for tax purposes and has the benefit thereof, taking into account the economic, legal, factual, and other relevant circumstances (e.g. the relevant double taxation treaty) under which the income is received.

RecipientAgentOrIntermediaryParty_Type

ResCountyCodePartyIdName

NameFree/NameFixAddress

CountryCodeAddressFree/

AddressFixPersData

Recipient Agent or Intermediary party of stfdirect. This is a party that received the payment in question but is known not to be the recipient beneficial owner (e.g., an intermediary such as a financial institution)

ActualPayerParty_Type

ResCountyCodePartyIdName

NameFree/NameFixAddress

CountryCodeAddressFree/

AddressFixPersData

Actual Payer party of stfdirect. This is the source of the payment that is described in this STF-Direct element, as determined by or documented to the sending country

PayerAgentOrIntermediaryParty_Type

ResCountyCodePartyIdName

NameFree/NameFixAddress

CountryCodeAddressFree/

AddressFixPersData

Payer - Agent or Intermediary party of stfdirect. This is a party through which the actual payer has effected the payment

STF Direct Transaction Parties

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Business Context

Vocabulary

Business Objects

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Comments

In the development of e-business XML standard it is essential that the following types of documentation be published:

Vision papers Design and implementation strategy papers Business object repositories (e.g. logical data dictionary, business vocabulary) Detailed Requirements Example XML documents

Currently very little of this exist for OECD STF. Due to the lack of documentation it is difficult to assess:

Whether the business context of the information being mapped in the schema meets the IRS requirements.

Whether commonality with standards UBL(ebXML) or CIQ should be required. If the use of a generalized XML taxonomy to describe business parties/roles/objects is

suitable to the IRS. Whether the proposed transaction model is viable for the IRS.

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Recommendations

A review of the OECD STF requirements and TaxXML TC charter shows that there is a considerable overlap of effort by the two groups. It would be beneficial to both parties if the OECD STF group and the OASIS TaxXML TC form a formal working arrangement.

This could be done through a TaxXML TC subcommittee dedicated to work with the OECD STF group. The subcommittee would act as an active reviewer and advisor using its access to the member TA’s to insure STF standard was being developed in line with TA needs. OECD would remain the active working group with timely access to the TaxXML TC subcommittee for appropriate tasks.

Utilizing an active collaborative effort would enable the timely production of results such as:

Vision papersDesign and implementation strategy papersBusiness object repositories (e.g. logical data dictionary, business vocabulary)Detailed RequirementsExample XML documents

In the end OECD gets its STF standard that is widely accepted by TA’s and the TaxXML TC has a large portion of its charter work done with a foundation to build the rest.

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Original Draft STF Requirements 11.08.01

Requirements for an OECD STF (Standard Transmission Format) for International Tax Information Exchange. The current OECD standard for tax information exchange on magnetic media (SMF1997) does not cover all transmission requirements that countries currently experience. Therefore discussion on an extension/re-formulation of that standard is proposed to the TIES group. In preparation of such discussion the following is submitted for comments.

Draft for Discussion

1. The new standard (STF) shall cover a variety of tax information exchanges (direct taxation, indirect taxation, certificates of residence, ...) by a uniform general format which, however, shall at most impose minimal overhead on the particular exchange on account of such general applicability.

2. The standard shall be flexible and extensible.

3. The STF shall be suitable for transmission by magnetic media as well as for transmission by purely electronic ways, especially the Internet.

4. When transmission will be purely electronic: the standard shall be supported by a majority of transmission protocols, especially HTTP and SMTP.

5. STF shall support bulk transmission as well as the transmission of single “records”.

6. STF shall support spontaneous (in its IT, not its tax meaning) transmissions as well as requests and answers to such requests.

7. The standard shall be in line with main developments and trends in e-business (in order to be able to draw on other areas experience to the best possible).

8. If countries decide to use non-standard code lists or other non-standard features of their own there shall be an easy way to communicate the meaning thereof “on the fly”.

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9. The standard shall to the best possible be independent of operating systems and other environmental conditions.

10. It shall be easy to use transmitted data for presentation on screen, for printing and for further processing, all according to the receiving country’s discretion or according to pre-fabricated templates.

11. It shall be possible to encrypt the data according to generally agreed standards.

12. It shall be possible to digitally sign the data according to generally agreed standards.

13. The specific role of a party (beneficial owner, taxpayer, buyer,...), an amount (gross income, tax payed, ...) etc. shall be configurable according to the needs of the transmission.

14. The standard shall contain templates for the most important exchange tasks.

15. The standard shall contain all possibilities of the 1997 SMF.

16. There shall be an easy way to migrate from the 1997 SMF.

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ARTICLES OF THE MODEL CONVENTION WITH RESPECT TO TAXES ON INCOME AND ON CAPITALOECD

Article 26EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes referred to in the first sentence. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.

2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:

a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public).

© OECD: Last modified: 2003-04-09

STF Standard Review