For the first time, the Israel Tax Authority will require uniform computerized reporting of items in financial reports, in addition to the annual income tax returns, Israel Tax Authority director Eitan Rub told “Globes”. He said as part of the automated recording of financial reports, every business would itemize all financial report items (profit and loss statement and balance sheet total), including adjustments for tax purposes, on a uniform detailed computerized form for use by the Tax Authority’s computers.
Rub said the requirement for uniform reporting of financial reports would apply to all businesses, except for special cases for whom specific formats would be designed. The Tax Authority plans to apply the uniform reporting method on reports to be submitted for the 2005 tax year onward. Rub said this would revolutionize income tax reporting, and predicted that more detailed and extensive recording of data would improve the quality of auditing.
The new method will also constitute the infrastructure for building an improved economic database that will subsequently be used for making fiscal policy decisions.
Under the current tax filing method, companies append financial reports for tax purposes to their annual income tax reports. These reports are not uniform, and the detail included and presentation of items vary greatly. This lack of uniformity adversely affects the recording and analysis of data in tax returns.
The Tax Authority has designed a new form, no. 6111, in which all data for financial reports are formatted in a uniform and detailed manner.
Published by Globes [online], Israel business news - www.globes.co.il - on July 12, 2005