Paola Fumiani is Project Manager at InfoCamere, which developed and manages Italy’s national data transmission system connecting the country’s 104 Chambers of Commerce and 300 different offices. She is a permanent member of the workgroup of the Associazione XBRL Italia, which developed the XBRL taxonomy for financial reporting in Italy, and a member of the XBRL EU Business Registers Working Group.

“No paper by 2012!” That’s the rallying cry of Italy’s Ministry for Public Administration and Innovation (MPAI), and its drive toward modernization is exemplified by the e-filing of general deeds’ business registration and the “XBRLification” of annual tax deposits. The MPAI’s initiative makes clear that digital is soon to be the de facto standard for public administration.

Business registration e-filing started with the Telemaco Project, a Web-based e-filing project for Italy’s Chambers of Commerce. The Project was set up by InfoCamere to simplify the Chambers’ administrative procedures by utilizing Web tools. The goal was to reduce the time and costs required to register new information and facilitate remote interactions with the Chambers of Commerce.

The Project began at the turn of the Millennium, and a law made electronic filing compulsory starting in 2003. The benefit for companies was immediate: a 30% reduction in costs simply by moving from traditional “in person” filing to e-filing.

Evolution of E-filing in Italy for the Business Register

Telemaco’s e-filing application provided the foundation for XBRL adoption by providing the tools for filing, sending, managing, and storing signed Annual Accounts files.

A 2006 law strongly supported by the tax agency drove applying XBRL to the Business Register, with the aim to get all financial data directly from the official source — the Business Register — in a structured format and no longer from tax forms. While companies have had to file Annual Accounts to the Business Register and with their tax forms, XBRL will help to reduce administrative burdens for businesses by allowing them to send only once the same financial information.

By law, the Chambers of Commerce must notify the tax authority — in an electronic format — about company registrations, their most significant changes (like closure, liquidation, bankruptcy, changes in company officers and transfers), and financial tax-related information. Business entities must also file their annual accounts with the Business Register in an automatically processable format, i.e., XBRL. (The Chambers of Commerce don’t have the mandate to modify — in this case, retype — e-signed documents.)

In a technical addendum, the law describes the rules of how this would be accomplished, in particular, the taxonomy to be used by all participants of the Annual Accounts deposit process.

The technical addendum was published in the Official Gazette on December 31, 2008, but another step still was required to start the compulsory XBRL filing: the official website where the Italian GAAP taxonomy is published. This requirement was mentioned in the technical decree but left to be defined by the Ministry. This site finally was launched on February 16, 2009.

On the same day, compulsory XBRL filings to the Business Register began. Because of the timing of this launch, only 5% of the companies were obliged to file in this fashion — almost 95% of companies already had closed their fiscal year before that date.

According to the law, any update to the taxonomy can be made without passing new law provisions, but with the approval of a national accounting experts committee, technical validation by XBRL editors, testing by the developers of accounting software, and integration into the Business Register environment. It is up to the users to check for updated taxonomy versions on the Ministry’s Web site.

Through this effort the Business Register is moving from a static document repository to a “living” electronic register with clear benefits for users and customers. For example, by using automated procedures, the Business Register now can perform the customary quality assurance at a saving of €0.60 per annual account: in 2010, €0,60 x 950.000 annual accounts = €570.000 in savings. In addition, the same quality assurance tests done by the Register are available for free on the Web site so customers can validate their annual accounts before filing. This application reduces errors and substantially reduces the need to re-file annual accounts’ changes.

Another possibility being explored is using the data collected with balance sheets and profit and loss statements to develop new services directed to SMEs, Chambers of Commerce, and financial analysts. A prototype service, the so-called Bext Service, is being used to produce statistics based on aggregated annual accounts from different companies, selected by geographical area, activity code, legal form, number of employees, and turnover.

As more source data comes available, the statistical studies of the Chambers of Commerce will improve on a national scale in a shorter period of time. For example, the Chamber of Bozen published a March 2009 survey of the economic activity in the province that compared activity through 2006. This was produced with an unavoidable delay that — under the new system — no longer will be necessary.

InfoCamere has also transformed annual accounts from 2005–2007 from PDF into XBRL. The XBRL-enriched reports of annual accounts allows the Chambers of Commerce to produce meaningful statistics studies on the evolution of economic activity on a national or on a local territorial basis — a development that is likely to benefit not only the Chambers, but many other areas of public administration as well.