Blockchain + Electronic Invoice Practice: Taking Tencent Blockchain Invoice as an Example

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Project introduction

According to Tencent Technology, on August 10, 2018, the nation's first blockchain electronic invoice was implemented in Shenzhen, and its underlying technology was provided by Tencent.

At the Shenzhen International Trade Revolving Restaurant, a 198 yuan catering invoice was issued, and the password area of ​​the invoice was displayed by the hash value. The blockchain encryption algorithm begins to sneak into the lives of ordinary people in the form of passwords.

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Blockchain electronic invoices are under the guidance of the State Administration of Taxation, and are led by the State Administration of Taxation, Shenzhen Taxation Bureau. The Tencent Blockchain provides the underlying technical support, which is the result of the application of the "blockchain + invoice" ecosystem nationwide harvesting.

In May 2018, Shenzhen Taxation Bureau and Tencent established the “Smart Tax” Innovation Lab, which aims to build a “Science and Technology Innovation +” tax management modernization system in Shenzhen and explore innovative tax management products through cooperation and complementary resources. The Shenzhen Blockchain electronic invoice is a key project of the "Smart Tax" laboratory, and it is also a successful harvest of the laboratory.

In August 2018, the State Administration of Taxation authorized the Shenzhen Municipal Taxation Bureau to pilot a blockchain electronic invoice. The Shenzhen Municipal Taxation Bureau defined administrative issuance standards and taxpayer invoice usage specifications. Tencent provided technical support for the underlying blockchain, and finally realized " The two-in-one combination of "flow of funds and invoices" combines invoice issuance and online payment to open up the whole process of invoice application, invoicing, reimbursement and tax reporting. Blockchain electronic invoices were born in the form of Internet products, so that all links of tax authorities can be traced, business operations are decentralized, online tax payment processing and paperless reimbursement circulation.

At the media briefing on the "One Year Anniversary of the Launch of Shenzhen Blockchain Electronic Invoices" on August 5, 2019, the Shenzhen Taxation Bureau disclosed the latest billing data. As of the day of the lecture, nearly 6 million Shenzhen Blockchain electronic invoices issued with the help of blockchain technology have been issued, with an average of 44,000 daily invoices, with a cumulative billing amount of 3.9 billion yuan.

Industry pain points

2.1 Information island still exists after the invoice is electronic

The electronicization of paper invoices has set off an unstoppable wave in the years starting from 2017. At present, the storage of e-tickets is still scattered among different e-ticket vendors, forming a distributed data island. The integration, verification, and tracking of these data is relatively complicated, and it also causes a lot of cost waste. In fact, electronic ticket transactions are a very natural application scenario of blockchain technology. Using distributed ledger, you can record e-ticket information across regions and enterprises. It is of great significance to trace the commercial background of electronic bills, the continuity of endorsement, the authenticity of the identity of the transaction subject, and the popularity of electronic bills in small and medium-sized businesses.

The use of blockchain technology, through its interconnected advantages, and the establishment of corresponding alliance chains or public chains can truly integrate the data in these information islands. At the same time, it also provides a transparent and secure distributed storage solution for all data in the chain. Moreover, these integrated data have the characteristics of high reliability, no or tampering, and strong verifiability. In addition, the invoice circulation information is chained to solve the problem of information islands in the invoice circulation process, and the entire status of the invoice status can be traced and traceable.

2.2 Prominent problems of false invoice opening, staggering and invoice falsification

Some companies often falsely issue large invoices due to their interests, and even issue invoices for non-existent false transactions.

With blockchain technology, we can store invoice data on the blockchain. Combined with the blockchain technology of transaction data, transaction data and invoices can be made open, transparent, and traceable, and transaction data and invoice data can maintain a certain matching relationship, which can quickly identify false invoices.

In addition, the invoice issuing system can actually use the transaction data in the blockchain to issue invoices automatically, reducing the problem of wrong invoicing due to manual negligence.

Enterprises have a single verification method for invoice fraud, and the current verification has a certain lag. This makes the company suffer losses due to information asymmetry and reduces the trust between employees and the company, and between the companies.

If the blockchain technology is used to manage the invoice data, this will enable these invoice data to be quickly recorded in all nodes, and all enterprises that have installed clients can query these invoice data in a timely manner. At the same time, because the blockchain technology has the characteristics of transparency and detrusting, as long as the invoice data that can be queried in the blockchain is a true invoice! It also solves the problem of difficult and slow check of fake tickets.

2.2 The electronicization of the entire process after the electronicization of the invoice

Invoices have been electronicized in the invoicing process. However, when the company's financial reimbursement is required, some invoices still need to be printed and left on paper. The reason is that electronic invoices have not yet fully realized the "paperlessness" of the whole chain, mainly because some enterprises and units have not yet completed the electronic invoice reimbursement system. At the beginning of 2016, the legal status of electronic accounting files has been clearly specified in the “Administrative Measures for Accounting Files” jointly issued by the Ministry of Finance and the National Archives Administration. Archive invoices electronically.

In addition, in the current environment, different information providers provide different tax management systems. The integration of these systems with order systems, payment systems, and financial systems requires customized interfaces for docking.

Using blockchain technology, the authenticity of invoices can be confirmed through time stamps, hash algorithms, etc., to prove their existence, authenticity, and uniqueness. Once it is determined on the blockchain, the subsequent operations of the bill will be recorded in real time, and its full life cycle is traceable and traceable. This provides a strong technical guarantee and complete data support for the management of the entire business process of finance and taxation. The large-scale application of blockchain technology will optimize business processes in the field of finance and taxation, reduce operating costs, improve synergy efficiency, and then provide systematic support for the electronic upgrade of ticket dramas.

3. Solution

Blockchain electronic invoice is one of the important application areas of blockchain technology. With the help of distributed accounting, multi-party consensus, and asymmetric encryption, it has helped the country solve some practical problems in the current fiscal and tax environment and provided a new set of E-invoicing standards. Blockchain electronic invoices are different from traditional electronic invoices. Shenzhen Taxation Bureau and Tencent's Blockchain electronic invoices combined the "flow of funds and the flow of invoices" into one, combining invoice issuance with online payment. The whole process of invoice application, invoicing, reimbursement and tax reporting.

14. Electronic invoice business process diagram

1. Circulation on the business chain : optimize the whole process of collecting, invoicing, reimbursing and taxing.

As shown in the figure above, the blockchain electronic invoice business process includes ticket collection, billing, circulation, acceptance, and accounting, etc., which is roughly divided into 4 steps:

(1) The tax authority writes the invoicing rules on the tax chain, and puts restrictions on invoicing on-chain, real-time approval, and controls invoicing;

(2) The invoicing enterprise applies for an invoice on the chain and writes the transaction order information and on-chain identity;

(3) The taxpayer claims the invoice on the chain and updates the taxpayer's identity on the chain;

(4) The receipt company checks the invoice, locks the status of the invoice on the chain, audits the account, updates the status of the invoice on the chain, and finally pays the reimbursement.

2. Business model innovation : Connect every invoice stakeholder and solve many pain points.

Tencent's self-developed blockchain technology relies on distributed accounting, multi-party consensus, and asymmetric encryption to form the following advantages:

(1) Cannot be tampered with, making it more difficult to forge and falsify original invoices;

(2) Trust transfer, reducing the cost of financial audit and tax audit of the reimbursement company;

(3) Don't double spend, effectively prevent one report from being over-reported;

(4) Innovate privacy protection strategy with business and data isolation;

This business model innovation can solve the problem of difficult user reimbursement and complicated processes at the ToC level. At the ToB level, it can help companies reduce the cost of invoicing, archiving, and auditing. At the ToG level, it can help the tax bureau reduce regulatory costs and service costs. .

The Tencent blockchain provides the underlying blockchain service capabilities for blockchain electronic invoices, which are structurally divided into business application platforms, electronic invoice business platforms, blockchain basic platforms, and cloud infrastructure.

12. Electronic Invoice Business Module Diagram

Cloud infrastructure

Cloud infrastructure includes hardware infrastructure such as network infrastructure, virtual machine general resource pool, and physical server resource pool, as well as supporting cloud platform services such as cloud security and cloud monitoring, which can openly and easily plug and meet the diverse needs of upper-level services .

2. Blockchain basic platform

The Tencent Blockchain Basic Service provides the underlying blockchain service capabilities: permission management, hashing operations, digital signatures, symmetric and asymmetric encryption, cryptographic algorithms, consensus mechanisms, communication protocols, smart contracts, and storage mechanisms to ensure on-chain Data is traceable and tamper-proof.

3. Electronic invoice business platform

The blockchain electronic invoice business layer provides the following key functions: enterprise registration application access, invoicing, reimbursement, red stamp, invoice authenticity check, data analysis monitoring, alarm, and invoicing rule control.

4. Business Application Platform

Through the development SDK and API interface provided by the digital invoice application service layer, you can easily access third-party services. Currently considered third-party access roles are: tax bureau, service provider, and KA enterprise.

KA (KeyAccount), literally translated as "key customers", meaning "key customers", "important customers".

Based on Tencent's self-developed blockchain technology, with the help of the distributed accounting multi-party consensus and asymmetric encryption mechanism of the blockchain technology, the "flow of funds and invoices" are combined into two streams, and invoice issuance is combined with online payment to open up The whole process of invoice application, invoicing, reimbursement and tax declaration was completed. Encrypting and uploading the entire flow of invoices to the chain ensures the uniqueness of the invoice and the tamper-resistant information records, improves the security of the electronic invoice system, reduces the costs of regulatory agencies and enterprises, and simplifies consumer billing and reimbursement Process.

4. Technical architecture

The Tencent blockchain platform is a TrustSQL system developed by Tencent as a blockchain technology facility. It relies on the open source community and Tencent cloud computing platform to create a blockchain infrastructure that serves smart industries and distributed commerce, and provides a one-stop blockchain to the outside The service platform TBaas provides individuals and enterprises with the efficiency of deploying blockchains to accelerate application landing.

15.TrustSQL architecture diagram

The overall architecture of TrustSQL consists of three layers. The underlying core platform layer includes six types of modules. The platform product service layer is positioned as a contract layer and management services are introduced. The application layer is a solution that extends to vertical industries based on the original specific application.

1. The underlying core platform (TrustSQL Layer)

The underlying core platform is positioned to create a leading enterprise-level blockchain basic platform, which is mainly based on the development and accumulation of Tencent blockchain technology. Through the interface of SQL and API, it provides blockchain technology service functions for upper-level application scenarios. Currently it mainly includes user identity management, consensus mechanism, communication protocol, private key management, privacy protection and storage mechanism.

2. Platform Product Service Layer

Abstract various types of typical blockchain applications and provide the basic capabilities and implementation framework of the application based on the underlying technology integration. Based on these basic capabilities, users can superimpose the unique characteristics of their own business and easily complete the blockchain implementation of business logic; help users quickly relocate existing services to the blockchain to meet the needs of new scenarios; or build completely new businesses Scenarios use the immutable and non-repudiation features of the blockchain to solve previously difficult problems.

3. Application service layer (Applicaiton Layer)

I want end users to provide trusted, secure and fast blockchain applications. Through the two interfaces provided by the platform product service layer described above, service providers can provide industry solutions to objections.

5. Landing results

5.1 Blockchain Invoice Invoicing Process

Compared with traditional invoices, the advantage of blockchain invoices is that when a transaction is completed by online payment, the data of this transaction can be regarded as an "invoice". And it will use blockchain distributed storage technology to connect consumers, merchants, companies, tax bureaus and other invoice stakeholders.

Such a "blockchain invoice" can be traced in each link, the information cannot be tampered with, and the data will not be lost. With it, you can apply for invoicing and one-click reimbursement through WeChat after checkout. The invoice information will be synchronized to the enterprise and tax bureau in real time, and the reimbursement payment will be available online. In short, with blockchain invoices, there is no need to queue up for invoicing, no need to write up by hand, no need to worry about missing invoices, no need to post invoices, and no offline bill submission.

The specific invoicing process is this:

1. After completing the payment, check the WeChat payment voucher. But unlike in the past, there is an invoice entry under the payment voucher, and the user can directly click "Invoice" to apply for invoicing.

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2. Fill in the billing information, select the billing header, and click "Apply for Billing"

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3. Click "Finish" to successfully invoicing

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4. Return to the main WeChat page, open the "New Invoice Reminder" and click "View Details" to get an invoice.

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5. After the billing is completed, the invoice has been automatically deposited into the WeChat wallet. Open "My"-"Card Bag"-"My Tickets" to view the issued invoices at any time. The electronic invoice does not need to be printed again. Select the invoice in the "Invoice List" of the "card package" and complete the reimbursement immediately. The reimbursement amount is returned to the WeChat small change balance.

5.2 Blockchain Invoice Progress Milestones

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Since the launch of the blockchain electronic invoice, the pilot companies and consumers have responded well, successfully driving the public's awareness and acceptance of new invoicing methods. At the media briefing on the "One Year Anniversary of the Launch of Shenzhen Blockchain Electronic Invoices" on August 5, 2019, the Shenzhen Taxation Bureau disclosed the latest billing data. As of the day of the lecture, nearly 6 million Shenzhen Blockchain electronic invoices issued with the help of blockchain technology have been issued, with an average of 44,000 daily invoices, with a cumulative billing amount of 3.9 billion yuan.

5.3 Blockchain invoice landing value

From the perspective of the invoicing company and the drawee, the taxpayer actually experienced the convenience and efficiency brought by the blockchain electronic invoice.

The first is to reduce the cost of doing business. Enterprises do not need to purchase special tax control equipment for billing, no management personnel, and no need to regularly clean up the tax control equipment storage. Finance personnel seldom run tax authorities, and the billing management process is greatly optimized.

The tax control machine is a cash register with tax seriousness and non-destructive function. It is not only a powerful assistant to the management of commercial enterprises, but also a law enforcement representative who collects sales data in the store. It is equipped with a tax storage memory that can be automatically recorded but cannot be changed or erased. It records daily business data and taxable amount, which is evidence of paying taxes to the tax authorities. It uses a special "lead seal" method to fix it inside the machine. It can't be opened by anyone except tax and full-time registered maintenance personnel.

The second is to improve corporate office efficiency. Reimbursement is an important part of corporate financial management. Finance personnel can complete the verification of invoices, check the weight, and quickly complete the review of reimbursement online based on electronic invoices on the blockchain.

The third is to benefit small, medium and micro enterprises. The blockchain electronic invoice provides enterprises with personalized invoicing services. Large enterprises can independently access the tax blockchain electronic invoice interface system for invoicing. SMEs can use the WeChat merchant platform to open the WeChat receipt invoicing function without tax reporting. You do n’t need to go to the tax office to purchase a ticket again. You only need to use a mobile phone or a computer connected to the Internet to issue a ticket.

Fourthly, after the consumption, the independent acquisition, payment is invoicing, invoicing is reimbursed, and the operation experience of the process has gained a good reputation from consumers.

For regulators, invoices are an important basis for tax authorities to control tax sources and collect taxes. For a long time, tax authorities have established a strict and tedious invoice management system in order to prevent and control invoice risks. Blockchain technology is applied to the invoice scenario, which is helpful to simplify the invoice management process, solve the tax administration invoice management cost, and enhance the tax authority's ability to obtain tax-related information.

Sorted by Wang Denghui, CTO of Hangzhou Xiabi Youshen Technology Co., Ltd., from "2019 Tencent Blockchain White Paper.pdf" and public materials.