In Germany, the Bundesrechnungshof, which is the supreme federal authority for federal audit matters and is tasked with examining the performance of the German government’s financial management, said that new mechanisms for fraud detection are needed, such as real-time reporting, and that they should be better connected with blockchain technology. This authority explains that blockchain technology is crucial to digitalize the fight against VAT fraud.[8]
By using blockchain, a real-time reporting system would not only reduce the time to detect fraud by making the data available in a timely manner, but it would also ensure the authenticity of the recorded data.
It should be noted that today, none of the existing real-time reporting systems make use of blockchain technology. Therefore, the important advantage of unalterable data has not yet been exploited.
The Netherlands-based startup Summitto, which received funding from the EU’s Horizon 2020 project, is working on a blockchain-based accounting system that tax administrations could use to combat VAT fraud. They have created a real-time reporting software based on the blockchain, through which companies can register their invoices and declare VAT, and the confidentiality of the information is also guaranteed.
Source CIAT
