The Canton of Zug has always been a pioneer in the Blockchain area and is not the heart of Crypto Valley without reason. Starting in 2021, Zug will be the first Swiss canton to offer the possibility of paying tax debts with crypto currencies.
This is an important step for the adaptation of crypto currencies as a means of payment: As more and more companies accept digital currencies, the canton of Zug, as a state institution, will follow suit and allow Bitcoin and Ether for tax payments.
Tax payments with Bitcoin and Ether up to 100,000 Swiss francs
The possibility of paying taxes using Bitcoin or ether is granted, according to the press release of the Canton, to both companies and individuals up to a claim amount of CHF 100,000. Partial payments are not accepted. A pilot will take place in the coming weeks to test the necessary processes.
If taxpayers decide to settle invoices with Bitcoin or ether, they can inform the tax authorities. They will then receive the necessary QR code, which is usually sent by e-mail.
“As the home of the Crypto Valley, it is important to us to further promote and simplify the use of crypto currencies in everyday life. With the possibility of paying tax debts with Bitcoin or Ether we are taking a big step in this direction. – Chief Financial Officer 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 is made possible by the crypto payments solution of Bitcoin Suisse.
History of Crypto Valley
The first crypto company in Zug, Bitcoin Suisse AG, was already founded in 2013 and laid the foundation for the creation of Crypto Valley. Less than a year later, the Ethereum Foundation chose Zug as its headquarters. This decision had a pulling 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; FINMA was already dealing with digital currencies such as Bitcoin in 2015.
Zug gradually developed into a location for companies dealing with Bitcoin, Blockchain, and crypto currencies. After the founding of the Crypto Valley Association and the crypto boom in 2017/18, this development continued at a rapid pace. 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 Crypto Valley.
Crypto adoption in Zug
In 2016, Zug City Council decided that they would be the first international government authority to accept Bitcoins as a means of payment. At that time, the amount was still limited to 200 Swiss francs, but they sent a strong signal. Over the years, they continued to expand their offer in the crypto sector and a year ago, the Commercial Registry Office of the Canton of Zug implemented the Blockchain solution “inapay“.
This spring, in the middle of the Corona crisis, Crypto Valley was put to another test. Startups in particular had to struggle with the difficult situation and many companies ran the risk of going bankrupt. But here too, the Canton of Zug came to the aid of the crypto scene and in May 2020, the cantonal government decided to support the start-ups.