New Technologies in International Law / Tymofeyeva, Crhák et al.

unreported crypto-asset income, notoriously difficult to trace for tax purposes. 381 The final study on China’s Golden Tax Project III (GTP III) revealed that the adoption of advanced information technology in tax administration significantly enhanced corporate income tax compliance. Analyzing data from 2010 to 2017, the research showed a substantial decrease in tax sheltering activities, especially among companies with higher tax rates and political connections. The effectiveness of GTP III is attributed to improved third party information reporting and stronger tax enforcement, particularly in areas with limited tax inspection resources. 382 2.4 Blockchain Blockchain technology is being explored as a way to track transactions and combat VAT fraud. Through decentralized recording, blockchain technology provides significant data recording, security, and transparency. 383 Several countries have started to use blockchain technology in tax administration. An example is China’s GAChain system automated company and asset registration on blockchain, secure electronic invoicing and tax collection. 384 Blockchain is also enabling new forms of collaboration, such as horizontal collaboration between tax administrations and other agencies in Brazil. Furthermore, multinational systems such as Mercosur’s BConnect use blockchain to improve information flow. 385 An interesting study conducted in Turkey investigated tax office employees’ perceptions of blockchain technology in tax transactions. The findings reveal a moderately positive attitude towards incorporating blockchain-based applications, considering the technology secure against cyber threats and safe for handling taxpayers’ personal data. They also view positively the idea of a blockchain wallet for taxpayers, enabling easier and cost effective transactions without needing to visit tax offices. Additionally, the employees are moderately optimistic about future implementation of blockchain and artificial intelligence in tax offices, recognizing benefits like reduced stationery use and a seamless transition to systems like e-government. 386 The key players in the cryptocurrency industry, originally viewed as anti-establishment, are increasingly recognizing blockchain’s potential global impact. 387 However there are new challenges ahead. The potential of blockchain technology, which the law is beginning to grasp, may soon be overtaken by the advent of the 381 Addis Tax Initiative, ‘The Digital Transformation of Tax Administrations’ ( ati , 19 July 2023) . 382 Jianjun L, Xuan W and Yaping W, ‘Can Government Improve Tax Compliance by Adopting Advanced Information Technology? Evidence from the Golden Tax Project III in China.’ (2020) 93 Economic Modelling 384. 383 Kükrer C, and Eğ mir RT, ‘Perception of Tax Office Employees for the Use of Blockchain Technology in Tax Office’ (2019) 6(12) International Journal of Advanced Research 638. 384 ILA, Sadowsky, p. 69. 385 Ibid., pp. 69–70. 386 Kükrer C, and Eğ mir RT, ‘Perception of Tax Office Employees for the Use of Blockchain Technology in Tax Office’ (2019) 6(12) International Journal of Advanced Research , p. 648. 387 Russo R, ‘Reflections about the Implications of Platforms and Technology for Taxation and Taxpayers’ Rights’ in Weber, D (ed), The Implications of Online Platforms and Technology on Taxation (IBFD, 2023), p. 6.

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