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Zug residents can pay their taxes in Bitcoin or Ether starting in February 2021.
Zug likes to see itself as a pioneer canton in terms of new technologies. Numerous companies and start-ups from the cryptocurrency and fintech sector have settled in the canton in recent years, all companies that have decided to work on the future of digital currencies and the financial sector.
It is appropriate that the canton now allows taxes to be transferred to the tax administration on the two cryptocurrencies Bitcoin and Ether starting next year.
“Of course this is also an image campaign”
However, Zug CFO Heinz Tännler has to admit that it is also about marketing. “This, of course, is also an image campaign. A large part of the fintech sector is at home in Zug, so it is important that we lend a hand and not ignore new technologies, “he says.
However, there have been inquiries from the group of newly established companies about whether they could pay taxes in a crypto currency. So the need is there, even if it won’t be huge for now, says Tännler.
The offer is not aimed primarily at ordinary taxpayers, but at companies and, if necessary, employees of fintech companies.
No exchange rate risk for the canton
The process is simple for taxpayers: they fill out their tax return as before, but ask the tax administration that the tax liability be settled in Bitcoin or Ether. You will then receive a QR code with which you can start the payment.
There is no exchange rate risk for the canton, says CFO Heinz Tännler: the taxpayer pays in Bitcoin, but the canton receives the amount owed in Swiss francs. “The taxpayer assumes the exchange rate risk,” says Tännler. “If you pay at a time when the encryption rate is low, you simply have to pay more to achieve the equivalent in Swiss francs.”
Final field tests are still running this fall, and individuals and businesses should be able to pay taxes via cryptocurrency starting in February, initially up to a claim amount of up to CHF 100,000.
