Abstract
Introduced to the agenda of the world in 2008, blockchain has been researched and reviewed in both the public and the private sectors, interpretations have been made regarding the future of the technology, and it has been endeavored to determine potential areas of application. Blockchain is predicted to be applied in many areas such as the financial sector, smart contracts, and the public sector, and its benefits are expressed. The application introduces accounting and taxation based on blockchain technology, transparency, convenience in transactions, time saving, concurrent taxation, effective and continuous auditing. By applying this technology in the area of accounting and tax auditing, errors and particularly frauds shall be prevented accordingly. Within this framework, at the outset of this study, the blockchain technology is introduced, and the impacts thereof on the accounting and taxation are addressed accordingly. Blockchain technology is expected to have impact on the accounting entry process, tax practices, accounting profession, accounting professionals, and the taxpayers.
TopDefinition And Properties Of Blockchain
Blockchain is among the most substantial and breakthrough innovation and development of today’s developing world. Blockchain is an English-based concept. It is formed by the combination of the words; “chain” and “block”. The concept of blockchain derives its name from the logic of operation and functioning. The blockchain is simply a database containing encrypted information, however, varies from a standard database.
Although it is a new formation in the globalizing world, the blockchain application is a technological breakthrough offering a great variety of benefits and having the potential to rapidly develop in a short span of time and affect the businesses. Blockchain technology has primarily been started to be used in the finance sector and then substantially contributed to the development of the sector. The application areas of the blockchain include various formal and informal processes and transactions from the banking to notarial transactions and the smart contracts. Thus, radical changes are expected to come to the fore based on the blockchain technology in the accounting entries and methods, procedures and audits related to taxation, taxation through withholding, transfer pricing practices and taxation methods related to value added tax. In this way, substantial momentum shall be achieved in national and international applications.
A blockchain is a growing list of records, called blocks, that are linked together using cryptography. (Wikipedia, 2015, para.1). Blockchain is a distributed ledger. In a more comprehensive expression, the blockchain is a distributed, shared, encrypted, irreversible and non-corrupted information store. Blockchain refers to a system storing the entire transactions between users using the system with the help of the network by verifying them. In consideration of all these features, it can be defined as a database consisting of secure blocks and queryable transactions constituting these blocks. (Ünal, Uluyol, 2020, pp.168).