The Swiss Federal Tax Administration has exempted bitcoin purchases from Value Added Tax (VAT), ruling that they do not constitute the delivery of goods or services.
In addition to making it more economical to purchase bitcoin in the country, many in the crypto community applaud such rulings for reinforcing the ideological notion of treating bitcoin as currency, not property. Luzius Meisser, President of Bitcoin Association Switzerland, commented:
“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.”
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Numerous countries in Europe have exempted bitcoin from VAT, including Spain, Germany, Finland, Belgium and the UK. In some cases, countries took direction from a European Union (EU) directive exempting sales of payment and “other negotiable instruments” from the tax. However, the directive is open to interpretation and there is no guarantee that all countries will follow the same route.
The ruling in Switzerland is particularly significant, as it is not a member of the EU, and as such, came to its conclusion through its own principles.
Several crypto startups have based their operations out of Switzerland due to its perceived position as a neutral haven for their activities.