Summitto builds technologies which allow companies to register invoices in a confidential manner. Imagine a tax system which can provide benefits for both the public and private sector. Compared to existing methods to collect VAT, our powerful cryptographic technology can save billions without risking confidentiality.
And, by registering every invoice in a publicly verifiable network, society will progress from a double-entry to a triple-entry accounting system.
Each year, EU governments lose 50 billion EUR due to VAT fraud. This problem has been around for decades, and shows no signs of disappearing. A fundamental problem is that tax authorities have to trust companies that they file their VAT report correctly.
We will revolutionize the VAT system by ensuring that companies can't submit false VAT report any more, without requiring the collection of any invoice data.
Source: European Commission, video entitled Stop the Carousel, © European Union 2017, European Commission is not affiliated or associated with summitto next to Horizon2020 involvement.
No! VAT fraud has existed for as long as the current VAT system has been in place: since 1993.
Commonly posed solutions include but are not limited to: "Reverse Charge", "Split Payments", "Centralized Clearance" and the "Definitive VAT system". Unfortunately these systems all have severe downsides. Reverse Charge only shifts VAT fraud to new industries, whilst Split Payments and Centralized Clearance require the collection of massive amounts of company data without providing any benefits for the private sector. Finally, the "definitive VAT system" has received criticism from various Member States due to the complex set of requirements it would introduce. Read publication
Just like "Centralized Clearance", we envision companies to register their invoices. However, by leveraging cryptography, we can ensure that no data is actually revealed to tax authorities. The invoice registrations will be linked by software to create a digital ledger of encrypted mathematical proofs of the VAT payable by and refundable to the relevant parties. We can identify 100% of all the VAT fraud, without revealing sensitive data to governments, whilst allowing companies to access new financial services.
A team of 63 journalists created an extensive report about VAT fraud. You can find it here.