German Federal Economic Ministry Wants to Combat Tax Fraud with Blockchain

Published at: Nov. 23, 2018

The German Federal Ministry for Economic Affairs and Energy (BMWi) is planning to fight tax evasion schemes by using blockchain, German business news outlet WirtschaftsWoche reported Nov. 22.

Following the major European tax fraud scheme CumEx-Files, the BMWi has suggested that distributed ledger technology (DLT) is capable of making the tax system more efficient in terms of fraud prevention.

Discovered in 2017, the CumEx-Files was a tax fraud scheme that reportedly was used by a network of banks, stock traders and top lawyers to obtain billions from European treasuries through speculation with dividend tax. As a result of the CumEx scheme, the German economy has reportedly suffered the most, with at least around $63 billion in reported losses.

The Parliamentary State Secretary at the BMWi Christian Hirte stated that blockchain technology deployment “could ensure” that tax shares are “certainly traceable” at “any time.”

According to the Federal Ministry of Finance, over $5 billion was washed through the German tax regulation loophole alone before 2012.

Earlier in November, the Thai Revenue Department revealed plans to track tax payments using DLT and machine learning, specifically intending to verify tax payments validity and to accelerate the tax refund process.

Previously, Cointelegraph reported on tax software firm Vertex suggesting that governments implement blockchain to improve tax systems.

Tags
Blockchain
Government
Stocks
Banks
Europe
Taxes
Germany
Related Posts
Association of Private German Banks Argues for Digital Euro
German banks have presented a position paper in which they make several arguments for the digital euro. On Oct. 30, in a paper released by the Association of German Banks (Bankenverband), which represents more than 200 private commercial banks and eleven member associations, banks stated that the “economy needs a programmable digital euro.” Monetary policy is the state’s responsibility, says Bankenverband The paper states that the responsibility for the monetary system lies with sovereign nation-states and that any currency provided by banks or private companies must fit into a state-determined system. “Anything else would ultimately lead to chaos and instability,” …
Blockchain / Oct. 30, 2019
German Financial Regulator Issues Paper on Blockchain Securities Regulation
The German Federal Ministry of Finance has published a key issues paper on the treatment and regulation of blockchain-based securities, according to a ministry announcement on March 8. In the paper initially released on March 7, the regulator discusses the introduction of regulations for electronic securities and the issuance of crypto tokens. The document stipulates that the regulation of electronic securities should be technology-neutral, which means that they could be based on blockchain, or distributed ledger technology (DLT). The issuance of crypto tokens purportedly will not be subject to existing market regulations since crypto tokens do not represent securities, investment …
Blockchain / March 9, 2019
Commerzbank, Siemens and Continental Complete Blockchain Money Market Pilot
German banking and financial services company Commerzbank and technology companies Continental and Siemens have jointly conducted a money market security transaction pilot using blockchain technology. Cointelegraph auf Deutsch reported on the development on Feb. 21. Money market securities are short-terms assets that serve for financing companies and usually have a maturity of one year or less. Usually, the processing of a payment takes two days due to a clearing process. The aforementioned parties “for the first time” conducted a blockchain-based money market security transaction worth 100,000 euro ($113,340) within a pilot project in January, where Continental acted as the issuer …
Adoption / Feb. 21, 2019
Deutsche Börse, HQLAx Report ‘Significant Progress’ on Blockchain Securities Lending Platform
Major global securities marketplace Deutsche Börse has reported it is “making significant progress” on its blockchain-based securities lending platform, according to an official press release on Jan. 29. The platform is being co-developed by the German securities marketplace and Luxembourg-based blockchain liquidity management platform, HQLAx. According to the press release from Deutsche Börse, six banks have to date confirmed their plans to join the securities lending platform, and have initiated “their connectivity processes.” The platform’s launch is scheduled for the the first half of 2019, while all related legal and regulatory policies are set up to to be finalized soon, …
Adoption / Jan. 29, 2019
Germany outlines favorable tax guidelines, gains on BTC and ETH sold after a year tax-free
The Federal Ministry of Finance (BaFin) published a 24-page document on Tuesday outlining clear income tax rules for cryptocurrency and virtual assets. Tax practitioners, businesses and individual taxpayers now have clear direction on the tax requirements for acquiring, trading and selling cryptocurrencies. The key takeaway is that individuals who sell BTC or ETH more than 12 months after acquisition will not be liable for taxes on the sale if they realize a profit. Parliamentary State Secretary Katja Hessel also addressed questions around the long-term staking of cryptocurrencies: “For private individuals, the sale of purchased Bitcoin and Ether is tax-free after …
Technology / May 12, 2022