Towards Tax Compliance by Design: A Decentralized Validation of Tax Processes Using Blockchain Technology

Fatz, Filip; Hake, Philip; Fettke, Peter

doi:10.1109/cbi.2019.00071

Cited by 20 publications

(14 citation statements)

References 25 publications

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“…Employees have to be willing and to be able to adapt to the new routines, thus also being well trained in this regard (Anderson et al , 2014). Processes have to be in line with legal regulations, which include being compliant with value-added taxes to optimize tax payment (Fatz et al , 2019). In addition, processes are connected in their execution to other companies, i.e.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

The influence of institutional conditions on firms’ process innovation – evidence from firms based on a multi-country analysis

Durst

Leyer

2022

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Purpose Our understanding of the influence of institutional conditions on process innovation is still limited, despite managers’ need to know which factors should be considered in decision-making and governments should be aware of how to foster process innovation through the provision of attractive institutions. Therefore, this paper aims to examine how institutional dimensions such as workforce, political instability, labor regulation, corruption, tax administration and transportation influence process innovation in smaller firms located in emerging countries other than the BRICS (Brazil, Russia, India, China and South Africa). Design/methodology/approach A data set from the World Bank Enterprise Surveys questioning over 20,000 companies from 41 emerging countries supplemented by the gross domestic product (GDP) per capita for each country was used and analyzed by the means of general linear mixed models. The analysis emphasized small- and medium-sized enterprises (SMEs) and excluded BRICS countries. Findings The findings demonstrate which institutional factors matter for process innovation depending on company size and GDP. Research limitations/implications This paper advances research on the influence of institutions on firm innovation – the institution–process innovation relationship in emerging countries other than the BRICS in particular. By considering the role of company size and GDP per capita on the institution–process innovation relationship, the paper offers more nuanced insights compared with prior studies and thus makes a strong contribution to the innovation theory. The data used are not suitable for a longitudinal study the same refers to capturing the variety found in the countries even those coming from the same geographic area. Practical implications The results provide practitioners, e.g. managers of SMEs, with concrete ideas on how to improve process innovation in their companies. Other actors such as policymakers too can benefit from the results as they will allow the design of more target group-oriented measures, aspects that can ultimately lead to more sustainable businesses. Originality/value By focusing on process innovation and emerging countries, the paper contributes to growing research efforts in emerging countries beyond the BRICS. Thus, the results add more diversity to the study of process innovation and its influencing external (institutional) factors. The emphasis on SMEs also allows us to highlight differences between different categories of SMEs.

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Section: Theoretical Backgroundmentioning

confidence: 99%

The influence of institutional conditions on firms’ process innovation – evidence from firms based on a multi-country analysis

Durst

Leyer

2022

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“…In this way, auditors could extract data from firms’ blockchains and perform smart audit procedures within these blockchains. Fatz et al (2019) use blockchain technology to create a system that issues certificates of arrival for goods, which are relevant in the VAT context for transactions between two businesses located in different EU countries.…”

Section: Discussionmentioning

confidence: 99%

Blockchain in accounting practice and research: systematic literature review

Bellucci

Bianchi

Manetti

2022

MEDAR

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Purpose This study aims to review the academic literature on the utilization of blockchain in accounting practice and research to identify potential opportunities for further scientific investigation and to provide a framework for how accounting practices are impacted by blockchain. Design/methodology/approach This study is based on a systematic literature review (SLR) of 346 research products available on Scopus, which were mapped with bibliometric analyses and critically discussed in relation to three main topics: the impact of blockchain on accounting and auditing, cryptoassets and finance, business models and supply chain management. Findings Blockchain has many potential implications for accounting practice and research. In addition to providing the state-of-the-art of accounting research on blockchain and additional avenues for further studies, this study discusses why practitioners are interested in this technology: triple-entry bookkeeping, the inalterability of transactions, the automation of repetitive tasks that do not require discretionary choices, the representation of cryptocurrencies in financial statements, value-chain management, social and environmental auditing and reporting and business model innovation. Originality/value The novel contribution of this study is integrated and threefold. First, this SLR provides a clear picture of the state of the accounting research on blockchain using bibliographic and narrative analyses. Second, it investigates how accounting and auditing practices are impacted by blockchain. Third, it contributes to the accounting literature with its discussion of the potential future research trends related to blockchain for accounting.

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“…Recently, blockchain technology has been employed to create decentralized applications that track taxable transactions of businesses [7][8][9][10][11][12][13][14][15]. However, the acceptance of blockchain-based business applications depends heavily on the creation of appropriate security measures to protect the business' data.…”

Section: Problem Description and Objectivesmentioning

confidence: 99%

“…The authors argue that ZKPs allow controlling the degree of transparency [11]. In a previous work [12,13], we rely on a public blockchain to enable compliance with documentation obligations related to VAT.…”

Section: Related Workmentioning

confidence: 99%

“…Recently, the shortcomings resulting from decentralized and individual tax and information systems have been addressed by blockchain solutions [7][8][9][10][11][12][13][14][15]. In the proposed applications [7][8][9][10][11][12][13][14][15], the blockchain technology provides an integrated and consistent view on taxable transactions. This is achieved by a combination of consensus mechanisms and smart contracts, leading to a decentralized validation and storage of information without requiring mutual trust between the participating actors.…”

Section: Introductionmentioning

confidence: 99%

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Confidentiality-preserving Validation of Tax Documents on the Blockchain

Fatz¹,

Hake²,

Fettke³

2020

WI2020 Zentrale Tracks

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Information exchange between tax administrations, businesses, and auditors is key to effective tax enforcement. Therefore, organizations proposed the application of blockchain technology to interconnect the different actors and increase tax transparency. However, the lack of confidentiality measures hampers further development. Especially, businesses are concerned about the disclosure of commercially sensitive information that might threaten their competitive advantage. In this paper, we investigate how the application of zero-knowledge-proofs can contribute to solving the dilemma between transparency and confidentiality in blockchain-based tax systems. To meet this end, we provide a conceptual design of a confidentiality-preserving distributed tax ledger. Moreover, we present a prototype addressing reporting obligations in the context of value-added tax. Our evaluation shows that zero-knowledge proofs are an effective measure to trade off transparency against confidentiality. Still, their application is challenging and future research must focus on better abstractions of proving statements.

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Towards Tax Compliance by Design: A Decentralized Validation of Tax Processes Using Blockchain Technology

Cited by 20 publications

References 25 publications

The influence of institutional conditions on firms’ process innovation – evidence from firms based on a multi-country analysis

The influence of institutional conditions on firms’ process innovation – evidence from firms based on a multi-country analysis

Blockchain in accounting practice and research: systematic literature review

Confidentiality-preserving Validation of Tax Documents on the Blockchain

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