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The Swiss Federal Tax authority has confirmed that there is no VAT on bitcoin in Switzerland, Bitcoin Association Switzerland reports.

The Swiss Federal Tax Administration (ESTV) clarified the legal status of bitcoin in response to a formal enquiry made by three Swiss bitcoin organizations in February 2014. The authority stated that no VAT applies to companies that sell bitcoin. This means that bitcoin is treated in Switzerland as means of payment and not as goods or service. 

The exchange of Swiss Francs into bitcoins is equated to the exchange of Swiss Franc into any other fiat currency like Euro. The exchange transaction fees charged by bitcoin companies are also VAT-free. 

“This is the most reasonable way to classify Bitcoins in the context of VAT and we are fortunate that the tax administration agrees with our view. Bitcoin is a currency, and thus should also be treated like a currency,” stated Luzius Meisser, the president of Bitcoin Association Switzerland. 

Switzerland established a favourable regulatory climate for bitcoin businesses. CoinFox reported earlier that ECUREX GmbH, the Zurich based bitcoin, litecoin and dashcoin exchange, became the first digital currency exchange platform to be fully compliant with the Swiss Banking Act. Last month, CoinFox also wrote about the investors who created the “bitcoin bank” and applied for a license in Switzerland. Bitcoin companies show interest in the Swiss market, too. Xapo moved its headquarters to Zurich after meeting with some difficulties in California two months ago. 

The status of bitcoin with regards to taxation differs from country to country. For instance, bitcoin is VAT-exempt in Finland, Belgium and the United Kingdom. In Australia, bitcoin is classified as property and, therefore, bitcoin transactions are taxed. Russian authorities are currently considering the legalisation of bitcoin with the profiting from bitcoin taxation in mind.

 

Sonya Belova