GNU Taler: Taxable Anonymous Libre Electronic Reserve

grarpamp grarpamp at
Sun Dec 13 23:27:18 PST 2015

Taler technology: About taxability, change and privacy

One of the key goals of Taler is to provide anonymity for citizens
buying goods and services, while ensuring that the state can observe
incoming transactions to ensure businesses engage only in legal
activities and do not evade taxes (such as income tax, sales tax or
value-added tax). However, we also want to stay out of the immediate
personal domain, so sharing funds within a family or copying coins
between devices should not be subject to monitoring by the state.

In Taler terminology, we distinguish between transactions where the
exclusive ownership of the value of a coin is passed from one entity
to another, and sharing whereafter control over a coin is shared by
multiple electronic wallets (which may belong to different
individuals). In Taler, the receiver of a transaction is visible to
the state and thus can be taxed, while sharing is invisible to anyone
not involved. Once a coin is shared among different individuals, any
one of those can try to spend it, but only the first spender would
succeed. Thus, sharing requires a strong trust relationship among the
individuals involved, and thus represent interactions in the protected
immediate personal domain, and not commercial transactions.

When Taler needs to provide change, for example because a customer
only has a 5 Euro coin but wants to make a 2 Euro purchase, it needs
to create fresh coins (of a total value of 3 Euros) that are
unlinkable to the original 5 Euro coin to ensure privacy. To ensure
that the resulting refresh operation where the change is converted to
fresh coins cannot be used to transfer funds from one entity to
another, Taler ensures that any owner of an original coin that was
involved in a refresh operation can follow a link to the private
information of the fresh coins generated by the operation. As a result
of this trick, refresh operations cannot be used to create transfers,
as the linkage ensures that the fresh coins are always shared with the
owner of the original coin.

As a result, Taler does not intrude into the personal economic domain,
offers good privacy, taxability for transactions and the ability to
give change.

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