The application of POWER to a “simple” example from the Dutch

In this section, we will illustrate the method using an example from the revised Income Tax Law, which will become effective for the fiscal year 2001. Article 8.9. states:

Artikel 8.9 Verhoging maximum gecombineerde heffingskorting bij minstverdienende partner

1. Indien de gecombineerde heffingskorting door artikel 8.8 zou worden beperkt tot een niveau beneden het gezamenlijk bedrag van de algemene heffingskorting en de voor de belastingplichtige geldende arbeidskorting, kinderkorting, aanvullende kinderkorting en

combinatiekorting wordt indien de belastingplichtige in het kalenderjaar gedurende meer dan zes maanden dezelfde partner heeft, de

gecombineerde heffingskorting verhoogd tot het gezamenlijk bedrag van de voor hem geldende algemene heffingskorting, de

arbeidskorting, de kinderkorting, de aanvullende kinderkorting en de combinatiekorting.

2. De verhoging van de gecombineerde heffingskorting bedraagt maximaal het bedrag van de door de partner verschuldigde

gecombineerde inkomensheffing verminderd met zijn gecombineerde heffingskorting.

3. Dit artikel is niet van toepassing indien de belastingplichtige bij de aanvang van het kalenderjaar de leeftijd van 27 jaar niet heeft bereikt en in het kalenderjaar gedurende meer dan zes maanden in belangrijke mate door zijn ouders is onderhouden.

This article states, in an unofficial and rather literal translation from Dutch:

Article 8.9 Increase of the maximum combined levy reduction for the least-earning partner

1. If the combined levy reduction would be limited by article 8.8. to a level below the joint amount of the general levy reduction and the to the taxpayer applicable labor reduction, child reduction, additional child reduction and combination reduction, the combined levy reduction will, if the tax payer has the same partner during more than six months in the calendar year, be raised to the joint amount of the to him applicable general labor reduction, child reduction, additional child reduction and combination.

2. The raise of the combined levy reduction amounts maximum to the combined income levy due by the partner lowered with his combined levy reduction.

Knowledge Management: The Role of Mental Models in Business Systems

3. This article shall not apply if the tax-payer has not reached the age of 27 years at the beginning of the calendar year and has been largely maintained by his parents for more than six months during the calendar year.

We will use the Dutch version to show how the translation into conceptual model takes place. One of the features of legislation is the use of structure in the text. Furthermore legislation often contains references. These references may be absolute or relative. In the example of the Income tax we find two references; ‘artikel 8.8’ referring to an absolute part of the law and in the third member we find a relative reference ‘dit artikel’ (this article), referring to the article itself.

Artikel 8.9 Verhoging maximum gecombineerde heffingskorting bij minstverdienende partner

1. Indien de gecombineerde heffingskorting door artikel 8.8 zou worden beperkt tot een niveau beneden het gezamenlijk bedrag van de algemene heffingskorting en de voor de belastingplichtige geldende arbeidskorting, kinderkorting, aanvullende kinderkorting en

combinatiekorting wordt indien de belastingplichtige in het kalenderjaar gedurende meer dan zes maanden dezelfde partner heeft, de

gecombineerde heffingskorting verhoogd tot het gezamenlijk bedrag van de voor hem geldende algemene heffingskorting, de

arbeidskorting, de kinderkorting, de aanvullende kinderkorting en de combinatiekorting.

2. De verhoging van de gecombineerde heffingskorting bedraagt maximaal het bedrag van de door de partner verschuldigde

gecombineerde inkomensheffing verminderd met zijn gecombineerde heffingskorting.

3. Dit artikel is niet van toepassing indien de belastingplichtige bij de aanvang van het kalenderjaar de leeftijd van 27 jaar niet heeft bereikt en in het kalenderjaar gedurende meer dan zes maanden in belangrijke mate door zijn ouders is onderhouden.

The structure of Artikel 8.9. is modeled by four packages (one for the article as a whole and three nested packages for the members). The first member will contain an absolute package reference to ‘Artikel 8.8.’ (see Figure 7.3.1).

Figure 7.3.1. Article 8.9. consists of three members modeled by three packages.

The first member refers to article 8.8. with an absolute package reference.

After thus establishing the structure of the law we continue by detecting the terms (the concepts) and the relationships between these terms in the legal text subject to our analysis. This is done typically article by article, member by member. In the first member of article 8.9. the terms are in bold while the relationships are underlined:

Artikel 8.9 Verhoging maximum gecombineerde heffingskorting bij minstverdienende partner

1. Indien de gecombineerde heffingskorting door artikel 8.8 zou worden beperkt tot een niveau beneden het gezamenlijk bedrag van de

algemene heffingskorting en de voor de belastingplichtige

geldende arbeidskorting, kinderkorting, aanvullende kinderkorting en combinatiekorting wordt indien de belastingplichtige in het kalenderjaar gedurende meer dan zes maanden dezelfde partner heeft, de gecombineerde heffingskorting verhoogd tot het gezamenlijk bedrag van de voor hem geldende algemene heffingskorting, de arbeidskorting, de kinderkorting, de aanvullende kinderkorting en de combinatiekorting.

Knowledge Management: The Role of Mental Models in Business Systems

Figure 7.3.2. The first member of ‘Artikel 8.9’ of the income tax law (Herziening 2001). All concepts are modeled as UML types, the relationships are modeled as associations while the ‘rule’ is modeled as a type exception invariant. The latter is a stereotype that indicates how the invariant should be treated during re-factoring.

The terms are modeled as types in UML while the relationships are represented as UML associations. The ‘rules’ described in the members of an article are modeled as OCL invariants (see Figure 7.3.2). The second and third members are modeled as well. (see Figures 7.3.3 and 7.3.4).

Figure 7.3.3. The second member of ‘Artikel 8.9’ of the income tax law (Herziening 2001).

bedrag : Bedrag verschuldigde

Lid 2

Partner

<<type>>

let maximumVerhoging = Partner.verschuldigde.bedrag – Partner.zijn

self > maximumVerhoging implies self = maximumVerhoging

<<typeException>>

GecombineerdeInkomensheffing<<type>>

GecombineerdeHeffingskorting<<type>>

Verhoging

<<type>>

zijn

van

Knowledge Management: The Role of Mental Models in Business Systems

Figure 7.3.4. The third member of ‘Artikel 8.9’ of the income tax law (Herziening 2001). This model has an example of an age attribute, demonstrating the modeling of concepts used in the legal reasoning as opposed to designing technically optimal data models. This model also shows the ‘applies’ operation, which is added to the package reference model item, as an extension to be used in OCL.

According to this article we have to calculate the amount of the combined levy reduction into an amount before and an amount after application of the first member. If we model this article we lack the definition of many

concepts such as ‘Algemene Heffingskorting’ (General Levy Reduction), the ‘Arbeidskorting’ (Labor Reduction), ‘Partner’, ‘Kalenderjaar’ (Calendar Year), ‘in belangrijke mate onderhouden’ (Largely Maintained), ouder (Parent). We also lack the definition of some of the attributes, which relate to these concepts. This is due to the non-import modeling, and we will consequently have incomplete models for most tasks. Hence, we can detect this incompleteness, and look for knowledge to be added from other legal sources (i.e. other articles, specifically those that contain the

definitions of these concepts, or failing that, an expert interpretation of these concepts).

In the re-factoring process, we produce an integrated model that is

composed from the individual partial models (see Figure 7.3.5), connecting concept reference and concept definition.

Some other defects still remain:

• In the first member, nearly the same concepts are added twice. Is the sum of the same concepts intended, and could a clearer phrasing be used, e.g. “amounts minimum to”, the inverse of a translation pattern used in the second member, which contains the phrase “amounts maximum to”? (Result of in-translation validation.)

• What does the term “his” refer to in the second member, the partner or the taxpayer? Would it not be more understandable to make this explicit? (Result of in-translation validation.)

• Does the third member of this article render itself inapplicable? Should this not read “The first and second members of this article shall not apply...”?

Some of these inconsistencies can be resolved by selecting and translating further specifications, originating from juridical conventions, expert groups or, in the most expensive case, court rulings. In the absence of court rulings, executive measures may be required to resolve the ambiguities.

Detecting these potential problems early on may cut government costs and enhance taxpayer compliance. In all cases, the decisions made by the software system can be justified using the authority of the translated specifications that contributed to the re-factorings that produced the decision.

Figure 7.3.5. Re-factoring two conceptual models representing a part of the domain by connecting the concepts (types) in the models to the models in which these concepts are defined. Modeling this way we finally end up with a network of

interconnected, but still traceable models. The scope of this network depends on the task that the project has in mind.

7.4. The application of POWER to a simple example from the