The Shenzhen tax authorities have teamed up with online giant Tencent to help issue China’s first blockchain-based electronic “fapiao” invoice.
On 10 August a restaurant in Shenzhen’s Guomao Building (深圳国贸大厦) issued the first “e-fapiao” based on blockchain technology according to a report from state-owned media.
Representatives from Tencent and Shenzhen’s tax department say that the new e-fapiaos make use of a blockchain platform provided by Tencent, facilitating both fapiao issuance and tax filing by enterprise.
Following the completion of transactions the system automatically records fapiao information and amounts via the blockchain in order to achieve effective real-time issuance.
In China a “fapiao” invoice is a legal receipt that plays a key role in the country’s taxation system by attesting to the purchase of goods and services.
China’s tax authorities use fapiao to ensure that enterprises pay tax in advance on anticipated sales, as part of efforts to prevent tax evasion.
Cai Yige (蔡弋戈) general manager of Tencent’s blockchain operations, said that fapiao issuance has traditionally involved the participation of multiple parties, lengthy processing times and considerable risk of information tampering.
The blockchain can improve fapiao handling by ensuring the completeness and traceability of all stages of the process from issuance to accounts entry and reimbursement.
Blockchain technology heightens the difficulty of information tampering by enabling multiple parties to participate in the maintenance of records via a distributed ledger.
The Shenzhen tax department and Tencent jointly established a “Smart Tax” (智税) innovation lab in May 2018, for the purpose of exploring the application of technologies such as cloud computing, artificial intelligence, the blockchain and big data to tax administration and tax policies.