The Canton of Zug has always been a pioneer in the blockchain area and is in the heart of the Crypto Valley for a reason. Starting in 2021, Zug will be the first Swiss canton to offer the possibility of paying taxes with crypto currencies.
An important step for the adoption of crypto-currencies as a means of payment: As more and more companies accept digital currencies, the canton of Zug, as a state institution, is following suit and allowing Bitcoin and Ether for tax payments.
Tax payments with Bitcoin and Ether up to 100,000 CHF
According to the cantonal press release, the possibility of paying taxes using Bitcoin or Ether is granted to both, companies and private individuals, up to an maximum of 100,000 CHF. Partial payments are not accepted. A pilot project will take place in the coming weeks to test the necessary processes.
If taxpayers decide to settle their invoices with Bitcoin or Ether, they can now inform the tax authorities. They will then receive the necessary QR code, which is usually sent by e-mail.
«As home of the Crypto Valley, it is important to us to further promote and simplify the use of crypto currencies in our daily lives. By offering the possibility to pay taxes with Bitcoin or Ether, we take a big step in this direction.» – Director of Finance Heinz Tännler
Larger fluctuations in the crypto exchange rate do not affect the tax authorities as they receive the payment in Swiss Francs. Tax settlement with crypto currencies are made possible by the crypto payments solution of Bitcoin Suisse.
History of the Crypto Valley
The first crypto company in Zug, Bitcoin Suisse AG, was already founded in 2013 and laid the foundation for the creation of the Crypto Valley. Less than a year later, the Ethereum Foundation chose Zug as its headquarters. This decision had a kind of magnetic effect and more and more crypto projects settled in the Swiss canton. This allowed experience to be gathered early on and regulatory security to be provided; The Swiss Financial Market Authority “FINMA“, was already dealing with digital currencies such as Bitcoin in 2015.
Zug gradually evolved into a location for companies around Bitcoin, Blockchain and crypto currencies. After the foundation of the Crypto Valley Association and the crypto boom in 2017/18, this development continued rapidly. Co-Working Spaces under the direction of CV Labs were founded, associations for the support of blockchain startups were established and completely new projects were launched. Currently, more than 800 companies with more than 4000 employees are located in the Crypto Valley.
Crypto-Adoption in Zug
In 2016, the Zug City Council decided that they would be the first international government authority to accept Bitcoin as a means of payment. At that time, the amount was still limited to 200 Swiss francs, but they sent a powerful message. Over the years, they continued to expand their crypto services and a year ago, the Commercial Registry Office of the Canton of Zug implemented the blockchain solution “Inpay”.
This spring, in the middle of the corona crisis, the Crypto Valley was put to another test. Especially start-ups had to struggle with the difficult situation and many companies were at risk of going bankrupt. But again, the Canton of Zug assisted the crypto scene and in May 2020, the government council decided to provide support for crypto start-ups.