Local Swiss Authority Planning to Accept Taxes in Cryptocurrency

Authorities in the Swiss canton of Zug plan to begin accepting taxes in cryptocurrency from the start of next year.

From February 2021, citizens and companies based in Zug will be able to pay of their taxes in either Bitcoin (BTC) or Ether (ETH), as the two are the biggest cryptocurrencies in the market. Starting from next year this will be applicable for local citizens and companies as they will be able to tax up to CHF 100,000 (approximately USD 109,000). However, partial payments in crypto will not be accepted. Currently Zug authorities accept tax payments in fiat currencies, but they intend to add an additional payment method to begin accepting taxes in Bitcoin and Ethereum.

Finance Director at Zug administration in official announcement said that as the home of the Crypto Valley, it is important to further promote and simplify the use of cryptocurrencies in everyday life, by enabling the payment of taxes with Bitcoin or Ether, we are taking a big step in this direction.

It was also announced that despite the administration’s decision to receive cryptocurrencies as a form of payment, it will receive the amount in fiat that way administration will protect the tax office against the digital currency’s market volatility.

To implement this, the Zug Department of Finance is collaborating with local crypto financial services company Bitcoin Suisse. The company will be responsible for converting the cryptocurrencies into Swiss francs. Bitcoin Suisse founder said: ”The crypto market has grown too big to ignore, and that he sees more crypto adoption in the traditional quarters. Everybody cares about a $0.5 trillion market. There’s almost nothing controversial about trading Bitcoin anymore. It’s completely mainstream,” said Niklas Nikolajsen.

The local tax department also has intended to introduce a pilot in the coming weeks and everyone wishing to pay taxes in crypto could contact the Cantonal tax office. The combination of trading technology and payment transactions with crypto-currencies enables to provide a good user experience for the taxpayer and to offer a proven service to the Canton of Zug.

Zug is one of the 26 cantons (member states) of Switzerland. The state is located in central Switzerland, and Zug is often referred to as Crypto Valley. The canton of Zug has become the home of several crypto companies and fintech startups. The location is one of the top spots for such kind of businesses dealing with global blockchain and digital currency because if its tax-friendly system, favorable political, economic, and technological environment, and accessibility to business and research companies. Crypto’s not all it’s doing. The Zug region offers low corporate taxes for all companies and has been accepting Bitcoin payments for certain government services since 2016, making it an attractive destination for crypto entrepreneurs. Zug even held Switzerland’s first blockchain-based municipal ballot in a test in 2018 and piloted a digital identity project using the technology in 2019.

The ability of the canton to nurture small upcoming businesses as well as the ease at which the valley adapts to modern business models has attracted entrepreneurs and skilled workers from all around the world.

Blockchain startups and businesses don’t have to deal with demanding regulations against cryptocurrencies as the Swiss government is open to supporting innovations in this field. Switzerland has a decentralized system that is predictable and stable, a vital environment for the development of blockchain-based projects, which are taking advantage of business-friendly and low-taxation regulations in the country.

If you have planned to provide various operations with cryptocurrency including offering customers a virtual currency, our team would gladly help you to obtain a Crypto License in Switzerland or Virtual Currency Provider License in Estonia.

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