Zug has emerged as one of the most crucial cryptocurrency hubs in the world. Taking the crypto game to a notch higher is Switzerland’s Canton of Zug administration which announced last week that it will start accepting cryptocurrency for tax payments.
According to Bloomberg’s report, the Canton was quoted saying,
“Tax settlement by means of crypto currency will be available to both companies and private individuals up to an amount of 100,000 Swiss francs [$109,670]”
From February 2021, its citizens and companies will be able to pay up to 100,000 CHF [around $109,000] of their taxes in either Bitcoin [BTC] or Ether [ETH]. With this, it becomes the first Swiss canton to offer the option of paying taxes with cryptocurrencies.
Cantonal Finance Director Heinz Taennler reportedly stated,
“We are not taking any risks with the new payment method, as we always receive the amount in Swiss francs, even when paying in Bitcoin or Ether.
For this initiative, Swiss authorities have reportedly collaborated with the Zug-bases crypto finance firm Bitcoin Suisse to convert crypto payments into Swiss francs and then transfer to the tax office. Ahead of the February launch, a trial run for the pilot of the tax scheme will be rolled out in the coming week.
Thanks to flexible regulations and an apt political system, the country has established itself as home to emerging crypto firms and Zug’s crypto valley has accommodated various cryptocurrency businesses. One of the main selling points for foreign businesses looking for opportunities in the region because of the already existing large multinational companies in Zug which open huge possibilities, from easier access to funding as well as a wider network for partnerships and collaboration.
This news comes after Sygnum, a Switzerland-based cryptocurrency bank, received approval from the Swiss Financial Market Supervisory Authority [FINMA] for its digital asset trading facility. Earlier in June this year, another Swiss-based transaction bank, called InCore Bank, became the first bank in the country to offer financial service providers and institutions worldwide after receiving a green light from the watchdog to trade, hold, transfer and generate [tokenized] digital assets.
Besides, FINMA had earlier issued two specific guidelines on initial coin offerings [ICOs], in February 2018, and supplemented in September 2019.