Switzerland is one of the most progressive countries in the world as far as crypto adoption is concerned. Like most countries where adoption has increased, there has been some talk of possibly amending tax laws for crypto firms. However, the country’s authorities are casting their doubt concerning whether such a move will be necessary.
The Current Tax Structure is Sufficient
Two weeks ago, the Swiss Federal Council convened a meeting to address reports on the need to amend the country’s tax laws to accommodate developments in the blockchain and crypto spaces. However, an official statement from the Council shows that it appears to be content with the tax framework currently in place.
In its statement, the Federal Council explained that the current system – which offers provisions for capital gains, income, wealth, and profits – has proved its worth with blockchain and crypto companies. Thus, there won’t be a need to provide special tax conditions for any new crypto and blockchain-based instruments.
Additionally, the Federal Council recommended that there shouldn’t be any expansion of withholding tax coverage in terms of income from equity and participating tokens. The Federal Council is the executive governing body for Switzerland. The agency has so far been placing a great deal of attention on the crypto and blockchain spaces in the country for a while now. It has launched several initiatives, all hoping to increase the level of certainty surrounding the use of these technologies in the country.
So far, the Federal Council has called for a better regulatory framework for blockchain. In March of last year, it launched a formal consultation on adapting federal law for blockchain development.
However, the issue of taxation is still one of the most significant in the country. So far, the Council has refused to budge on that one. In December 2018, the authority declared that the government’s legal tax framework was suitable to accommodate new technologies like blockchain. This new statement appears to reinforce that stance.
South Korea’s Upcoming Crypto Tax Bill
Switzerland isn’t the only country that is dealing with issues of tax accommodations for the crypto space. This month, South Korea – another highly progressive hotspot for crypto – announced that it would be moving forward with a crypto tax plan.
According to a report from local news source Korea JoongAng Daily, Hong Nam-Ki, the country’s finance minister, announced at a parliamentary finance committee meeting that they would be imposing a tax on cryptocurrencies.
Hong pointed out that the South Korean government had been discussing with several international partners over a digital tax structure. He also expressed his support for such a tax, adding that it would prop up the company’s tax revenue from foreign entities. The ministry added that it would reveal its tax plan in July.
The move was particularly necessitated after top crypto exchange Bithumb protested a $69 million tax bill that the government placed on it late last year. The company had made its case because cryptocurrencies weren’t a formally-recognized currency in the country. Hence, they weren’t liable to taxes. The South Korean government hopes to fix issues similar to the Bithumb debacle with the new tax structure. For now, the industry waits to see how the plans will unfold.