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The Swiss canton of Zug allowed to pay taxes in Bitcoin and Ethereum

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Authorities of the Swiss cantons actively integrate cryptocurrency in people’s daily lives. So, the authorities of the canton of Zug began to accept taxes in Bitcoin and Ethereum in February 2021.

Crypto Valley Association

Zug is the so-called “Crypto Valley Association”. An organization whose main goal is to build the world’s best ecosystem for blockchain and other related technologies.

Many cryptocurrency companies are based in Crypto Valley, including Ethereum, ShapeShift, Xapo, Cosmos Network and many others.

The canton itself has traditionally been considered one of the best places to do cryptocurrency business. Due to its friendly regulatory environment and policies regarding attracting tech startups to do business in the canton. However, the process of registering a company in the canton is laborious and costly.

The canton of Zug, known for its low corporate taxes, has been accepting payments in BTC for certain government services since 2016. The authorities believe that the innovation: paying taxes using cryptocurrency will contribute to its popularization and will make it easier to use it in everyday life.

The regional administration will cooperate with Bitcoin Suisse AG. It will facilitate the conversion of cryptocurrencies into Swiss francs, which will then be transferred to state accounts.

However, there is a limit on the amount of the transaction. No more than 100 thousand Swiss francs for individuals and legal entities.

The Zug authorities are confident that this step doesn’t carry currency risks for the region. According to the director of the financial department of the canton of Zug, the amount of the payment is received in Swiss francs, so even strong exchange rate fluctuations will not affect the transaction.

According to the founder and chairman of Bitcoin Suisse Niklas Nikolajsen, as BTC continues to rise despite the pandemic, and experts say it may even act as a defensive asset, industry leaders could change their minds.

Earlier, the Bitcoin Suisse company announced raising over $ 48 million from investors. The broker will spend the funds received on scaling and developing the business.

Bitcoin and other cryptocurrencies are considered assets in Switzerland. Therefore they are neither securities, nor financial contracts, nor property rights. So, at the moment, the Swiss Federal Council is taking steps to develop the legal status of cryptocurrencies and the rules for regulating the fintech industry in the country.

The use of cryptocurrencies to buy goods or pay for services, as well as accepting cryptocurrencies as a means of payment, do not require obtaining any license.

When buying and selling bitcoins, as well as other cryptocurrencies on a commercial basis, legal entities and individuals must comply with the requirements of the Swiss Anti-Money Laundering Law, including the need for KYC.

Reasons for choosing the Swiss canton of Zug

Switzerland is not just one of the leading financial centers, it has also become one of the leading crypto hubs in the world. Simply because instead of confronting promising technologies, regulators are trying to help create new projects and not overregulate the sphere. The Crypto Valley in the canton of Zug is home to many blockchain startups.

Conclusions

Now the Swiss canton of Zug is a premium jurisdiction for a token sale. This is due to progressive legislation and good conditions for doing business in the canton of Zug.

The main advantages of Switzerland:

– legislative clarity in the regulation of cryptocurrencies and related businesses;

– the friendly attitude of regulators to innovation, especially activities related to cryptocurrencies and blockchain technology.

However, the country’s major banks so far have largely refrained from offering cryptoasset-related services to their customers due to concerns about high volatility and security.