The Applicability on Blockchain Technology to Salary Income Taxation

Mattila JuriSeppälä TimoHukkinen TaneliLaikari ArtoMarkkanen KalleKoulu RiikkaJia Kai


This study examined whether blockchain-based smart contracts can be used to automate the process of taxing wage income. The aim was also to clarify the relevant concepts and to elucidate the challenges and opportunities from the perspective of the tax authority.

As a part of the study, an illustrative conceptualization of a smart contract wage tax application was also drafted. The conceptualization was used to identify points of friction in the utilization of blockchain technology, especially in the context of public administration.

The potential of blockchain technology and distributed ledgers has been widely discussed recently. In recent years, the concepts in the field have expanded and taken on new meanings, further inflating the beliefs about the revolutionary effects of the phenomenon. However, for the time being, blockchains and distributed ledgers have not succeeded in delivering on those expectations.

In the light of this study, the potential for exploiting blockchain technology in the context of wage income taxation seems unfruitful. The possibilities for applying distributed ledgers appear somewhat brighter. However, as the conceptual demarcation of distributed ledgers and traditional integrative IT systems is somewhat vaguely defined, the benefits of such application are difficult to estimate.

Publications of the Government´s analysis, assessment and research activities 2019:30.

Publication info

Taxation, Data systems, Technology (information), Development, Applied research, Research, Research activities
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