Digitizing Invoice and Managing VAT Payment Using Blockchain Smart Contract

Abstract

Nowadays, the authenticating procedure for transactions is still complicated, and the current Value-Added Tax (VAT) administration system works as centralized server, which consists of high-risk attacks from hackers. Therefore, only a few countries use digital technologies to calculate and manage the VAT payment despite of their benefits. In this paper, by combining decentralized storage network (DSN) with the smart contract (SC), we propose a new model based on Blockchain technology to authenticate the transaction, calculate Value-Added Tax and approve VAT payment. This system runs in a host computer (host PC) for encrypting and decrypting data. The smart contract is implemented in Remix Integrated Development Environment (IDE) based on the Ethereum platform. Experiential results show that the new model not only saves the cost for authenticating transactions but also protects the data from hacker’s attacks due to consensus property of the Blockchain technology.