Blockchain + tax opens up a new track for electronic invoices

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council issued the “Opinions on Further Deepening the Reform of Tax Collection and Administration”. The opinions pointed out that it is necessary to explore the application of blockchain technology in the collection of social insurance premiums. In the field of blockchain + taxation, blockchain electronic invoices have changed the competitive landscape of the existing invoice service market and opened up a new track in the electronic invoice service market with the advantages of low cost, contactless, and traceability.

Blockchain electronic invoice has three advantages

On August 10, 2018, under the guidance of the Shenzhen Taxation Bureau of the State Administration of Taxation, Tencent and Gaodeng Technology jointly issued the country’s first blockchain electronic invoice and landed in Shenzhen. In November 2018, the country’s first blockchain electronic invoice in the supermarket sector landed at Walmart Jinhai Road branch in Bao’an District, Shenzhen. In July 2019, the country’s first blockchain electronic naming invoice was issued in Yunnan. In March 2020, the nation’s first blockchain electronic invoice for the electrical retail industry was issued in Shenzhen Gome Electric (Cuizhu Store)…Blockchain + tax, the promotion of blockchain electronic invoices has entered the “racing race” stage .

According to experts, blockchain electronic invoices have three major advantages. First, blockchain electronic invoices are cheaper than hardware. Previously, the issuance of invoices required the participation of tax control equipment. According to calculations by relevant agencies, the market size of anti-counterfeiting tax control systems and related equipment in 2018 was about 8 billion yuan. Blockchain electronic invoices adopt a full-process on-chain model, which will change the monopolistic competition pattern of the upstream of the invoicing hardware, broaden the potential market space, optimize the overall social benefits, and help “cut taxes and fees” for enterprises.

Secondly, blockchain electronic invoices can be invoiced on demand without approval. According to Shenzhen’s blockchain electronic invoice practice, the use of blockchain to issue electronic ordinary invoices does not require the purchase of invoices, special equipment issuance, there is no limit on the number of tickets, there is no need to go to the tax hall to collect invoices, and the entire process of collecting invoices is contactless. And this advantage has also contributed to the active taxation force for Shenzhen’s prevention and control during the special period of the epidemic.

Third, blockchain electronic invoices can effectively avoid fake invoices and improve the invoice supervision process. Blockchain electronic invoices will connect each invoice stakeholder to trace the source, authenticity, and entry of invoices, and solve the problems of multiple invoices, false claims, false claims, and difficulty in verifying the authenticity of invoices during the circulation of invoices. In addition, it also has the advantages of reducing costs, simplifying processes, and ensuring data security and privacy.

“Shenzhen Sample” of Blockchain Electronic Invoice

In July 2018, Shenzhen received the approval from the State Administration of Taxation on launching the pilot application of blockchain electronic invoices, and started the pilot project of “blockchain + electronic invoice” promotion. In August 2018, the country’s first blockchain electronic invoices landed in Shenzhen; in November 2019, Shenzhen blockchain electronic invoices exceeded 10 million; by July 2020, Shenzhen blockchain electronic invoices had issued a total of 25 million invoices ; As of October 24, 2020, Shenzhen’s new blockchain electronic invoices in one year has reached 23 million.

At present, based on the established tax chain, the Shenzhen Taxation Bureau has further expanded the application scenarios of “blockchain + taxation”, and successively launched the “Shenzhen Four Departments Information and Information Exchange Platform”, “Natural Person Information Sharing Intelligent Platform”, and “Taxation-Industry” application scenarios. The “Consortium Chain” and “Blockchain Bankruptcy Practice Handling Linkage Cloud Platform” have promoted the improvement of both the quality and efficiency of tax management services. At the same time, the Shenzhen Municipal Taxation Bureau has also further strengthened tax-enterprise cooperation, and jointly explored the application of blockchain electronic invoices with a group of outstanding enterprises such as Tencent and Gaodeng Technology. This provides a good reference template for the promotion of blockchain electronic invoices across the country and the practical application of blockchain electronic invoices in various fields, and also serves as an example.

The relevant person in charge of the Shenzhen taxation department said that the Shenzhen taxation department will focus on the requirements of “building a more scientific management system”, give full play to the advantages of Shenzhen taxation in the application of blockchain technology, accelerate the layout of the blockchain in the tax field, and further deepen the application Practice, continue to improve the quality and efficiency of tax collection and management and service supply capabilities in the iterative upgrade of technology.

Blockchain electronic invoices may usher in a new outbreak in 2021

In the traditional invoice service market, value-added tax anti-counterfeiting, invoices, and back-end services in the tax control field constitute a duopoly competition. But now, Ukey, which is distributed free of charge by the national tax, has replaced the tax control disk that was once an oligopoly and had to be purchased by taxpayers. With the deepening of the promotion of blockchain electronic invoices, the decentralized and tax-free invoice issuance method will change the competitive landscape of the duopoly system, and emerging invoice service providers will be the first to enter the track.

Well-known domestic companies on this track include Gaodeng Technology and Daxiang Huiyun. Among them, Gaodeng Technology successively participated in the issuance of the country’s first blockchain electronic invoice, the country’s first blockchain electronic invoice for the supermarket industry, and the country’s first blockchain electronic title invoice. Gaodeng Technology officially disclosed data It shows that the current enterprise users of its services have reached 190,000. Looking at the global market, the invoice service market is also changing. For example, there are more than a dozen representative manufacturers focusing on invoices and payments in overseas markets, including Proactis, Taulia, Tipalti, Transcepta, Tradeshift, etc., but the market as a whole shows the characteristics of polarization. On the one hand, giant companies continue to integrate the market through mergers and acquisitions; On the one hand, start-up companies also continue to obtain huge financing and develop rapidly.

Experts pointed out that the overall opportunities of the electronic invoice service market outweigh the risks and challenges, and the current development trend of blockchain electronic invoices has become the “fertile ground” for the application of blockchain technology. With the mature implementation of blockchain electronic invoices in various places, enabling tax model innovation and realizing deep integration practices in multiple fields and multiple scenarios, blockchain electronic invoices may usher in a new outbreak in 2021.