Using Blockchain Technology to Eliminate Selected Problems of the Tax System

Authors

  • Grzegorz Sobiecki
  • Marcelina Szwed-Ziemichód

DOI:

https://doi.org/10.33119/ASCASP.2019.1.1

Keywords:

blockchain, public services sector, taxation, tax system, double spending, double taxation treaties, value added tax, transfer pricing

Abstract

Owing to the distinctive features distinguishing it from traditional database solutions, blockchain technology has the potential to revolutionize the way taxes are settled: the way they are collected and refunded, the way transactions are settled and verified as well as the way compliance and invoicing are handled. Hence it may effectively help solve the fundamental problem of the tax system – the tax gap. However, achievement of desired results will be contingent upon the use of specific mechanisms as well as the manner and area of their implementation. We are discussing and analysing six concepts of solutions within five areas: digitalisation of invoices; creation of a national cryptocurrency for tax settlements; settlement of dividends earned by foreign shareholders; compliance in terms of transfer pricing; and verification of active VAT payers. We believe that the greatest benefits and at the same time the least deficiencies can potentially be offered by the introduction of the concept of Digital Invoice Customs Exchange (DICE) based on blockchain technology. Currently, the concepts that are supposed to support payment of tax liabilities are seriously flawed, which limits their effectiveness. Whereas other solutions are not developed enough to be able to serve as any real alternative to the existing tax system or potential solutions that are not based on blockchain technology.

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Published

2019-01-26

How to Cite

[1]
Sobiecki, G. and Szwed-Ziemichód, M. 2019. Using Blockchain Technology to Eliminate Selected Problems of the Tax System. Analysis and Studies CASP. 7, 1 (Jan. 2019), 3–33. DOI:https://doi.org/10.33119/ASCASP.2019.1.1.

Issue

Vol. 7 No. 1 (2019): Analyses and Studies of CASP

Section

Articles

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