Zug, a canton in Switzerland, will be the first canton to start accepting cryptocurrency for tax payment purposes starting from February 2021.
Zug Canton Partners with Bitcoin Suisse for Crypto Tax Payment
According to an announcement by the canton on Zug on Thursday (September 3, 2020), taxpayers in the canton will have the option of paying taxes in Bitcoin (BTC) and Ethereum (ETH). The crypto tax payment option which is open to both individuals and companies will see taxpayers pay taxes to the tune of CHF 100,000 ($110,000)
The crypto tax payment functionality comes via a partnership with Bitcoin Suisse, a cryptocurrency broker headquartered in Zug. As part of the collaboration, Bitcoin Suisse will help convert crypto to francs to avoid the state incurring losses due to price volatility.
Furthermore, taxpayers willing to use the crypto option will notify the authorities and thereafter receive a QR code via email. While crypto payment for taxes is set to start in February 2021, the canton of Zug will run a pilot in a few weeks’ time to check for any errors. Besides, the Swiss canton will not accept partial payments.
Speaking on the new tax payment method, Heinz Tännler, the Zug Finance Director, said:
“As the home of the Crypto Valley, it is important to us to further promote and simplify the use of cryptocurrencies in everyday life. We can make one by being able to pay tax debts with Bitcoin or Ether big step in this direction.”
The canton of Zug accepting crypto for tax payment is an extension of an earlier decision of its capital, the city of Zug, which announced the payment of taxes in Bitcoin back in 2016. Also, Zermatt, a municipality in Switzerland, partnered with Bitcoin Suisse to accept BTC for local taxes.
Tax Collectors Going Crypto
Accepting crypto as payment for taxes is another indication of the growing acceptance of virtual currencies in different facets of human life. Back in March 2018, a bill was proposed in Illinois to allow residents to pay taxes using cryptocurrency.
In November 2018, the tax administrator in Ohio partnered with Bitpay to provide the option of paying tax debts with Bitcoin. Following Ohio’s announcement, major online retailer Overstock paid its corporate taxes in the state using BTC.
As reported by CryptoPotato in August 2020, Venezuela announced that it might start receiving taxes and fees in Petro, its native cryptocurrency.