Towards the Design of Digital Twins for Tax Law: Using Smart Contracts and Legal Ontologies for Automated Decision-Making

Description

This paper presents proposed research on the design of a framework for automating decision-making in tax software systems through the development of digital twins of tax laws, using the Austrian Income Tax Act as an example. These digital counterparts of the legal texts formulated in natural language are structured into four layers, inspired by the structured approach of smart contracts used in automated legal contract systems: (1) the legal text, (2) a domain-specific tax ontology, (3) a model layer for data configurations, and (4) a logic layer where the tax law logic is implemented in a formal language. By formalizing these layers, we in-tend to create a comprehensive, machine-interpretable representation of (parts of) existing tax laws. Such a framework could address inefficiencies in traditional legal processes by enabling consistent and transparent automated interpretation, calculation, and execution of tax laws. Future work will further investigate which parts of law texts can be formalized in digital twins, which decisions can be automated, and where human inputs will continue to be required.

Period	21 Feb 2025
Event title	Internationale Rechtsinformatik Symposion IRIS 2025
Event type	Conference
Location	Wien, AustriaShow on map
Degree of Recognition	International