E-Taxation-An Introduction to the Use of TaxXML for Corporate Tax Reporting

Online tax systems are rapidly replacing paper-based tax reporting systems. Promising many advantages over the traditional method of hard copy tax filing, these systems promise faster process, lower costs and increased efficiency. Using a specific language from the eXtensible Markup Language family called TaxXML, TIGERS, a government subcommittee for the establishment of electronic taxation standards is looking to revolutionize the way government administers taxation. TaxXML draws upon the concepts and constructs of basic XML and utilizes tax-related vocabularies to create a standardized and systematized framework of electronic tax preparation and reporting. Having said that electronic tax reporting is advantageous over traditional paper-based reporting, there are further advantages of using a TaxXML based electronic system than one that is engineered using non-standard proprietary technologies. While it is still in its early stages of development, it is unclear how hard the government will impose this technology onto the industry and also how the industry will react to this new technology. This paper will provide some background for the study of TaxXML and will suggest why TaxXML is a very significant development in the realm of online tax systems.