Proposal for an Automated Real-Time VAT Collection Mechanism in B2C E-Commerce Using Blockchain Technology

The correct collection of VAT on goods and services in cross-border e-commerce remains a problem in the European Union, especially in B2C situations. In the author’s view, this results from EU tax administrations’ lack of technical and legal capacity when it comes to collecting and analysing relevant VAT data, but also from the VAT collection model that is used, which is based on self-declaration. In this article, the author proposes that blockchain could be used in e-commerce transactions to develop an automated, real-time VAT collection mechanism at the level of payment processing.