Swiss Canton of Zug, also known as the Crypto Valley, has decided to accept Bitcoin and Ethereum as taxation Payments from February 2021.
This will be applicable for both private individuals and companies as they will be able to tax up to CHF 100,000 (around $109,000). However, partial payments in crypto will not be accepted.
Zug is home to many crypto and Blockchain startups due to the friendly regulations in the administrative jurisdiction.
Notably, Zug city, the capital of the Swiss canton has already accepted taxes in digital currencies since 2016, making the current program an extension.
“As the home of the Crypto Valley, it is important to us to further promote and simplify the use of cryptocurrencies in everyday life,” Heinz Tännler, Finance Director at Zug administration, said. “By enabling the payment of taxes with Bitcoin or Ether, we are taking a big step in this direction.”
Volatility Cannot Stop Acceptance
Tännler also detailed that despite the administration’s decision to receive cryptocurrencies as a form of payment, it will receive the amount in fiat. This, according to him, 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.
The tax department also has plans to initiate a pilot in the coming weeks as Tännler asked everyone wishing to pay taxes in crypto to contact the Cantonal tax office.
“The combination of trading technology and payment transactions with crypto-currencies enables us to provide a good user experience for the taxpayer and to offer a proven service to the Canton of Zug,” Dr. Arthur Vayloyan, CEO of Bitcoin Suisse, added.
