Bitcoin Forum

Bitcoin just got a big credibility boost: 45 members of the Swiss parliament signed a postulate asking for Bitcoin to legally be treated as foreign currency like the Euro or the Dollar.

Summary
The postulate demands to evaluate the opportunities of Bitcoin for the Swiss finance sector. It also states that Bitcoins raises a number legal questions and that the simplest way to answer them would be to clarify that Bitcoins should be treated like other foreign currencies. The goal is to clarify in a simple and straight-forward way how various laws such as the GWG (money laundering act), the MWSt (VAT act), or the KAG (securities act) are to be applied to Bitcoin. This not only paves the way for Bitcoin businesses and financial services in Switzerland, it is also a great precedent for other countries that look into how Bitcoin should be handled from a regulatory perspective.

What's next
The next formal step is for the Swiss parliament to have a vote on the postulate (can take many weeks). If it passes (which is very likely as about 25% of the parliament already co-signed it), the Federal Council will answer the questions, which again can take many months. And then, if the Federal Council agrees, it would again take a while to adjust the relevant regulations. So it will take time until it becomes effective, but it already today sends a nice signal of how regulatory bodies should treat Bitcoin when the law is unspecific.

Sources:
The press release from the parliamentary group that created the postulate: http://www.digitale-nachhaltigkeit.ch/2013/12/bitcoin
The Swiss parliament: http://www.parlament.ch/e/suche/Pages/geschaefte.aspx?gesch_id=20134070

Translation of the press release
Press Release of the Parliamentary Group for Digital Sustainability (Parldigi)

Berne, 2013-12-09

The core team of the parliamentary group for digital sustainability wants the opportunities of Bitcoin to be evaluated and asks the Federal Council (the Swiss executive) a number of questions regarding legal certainty. At the same time, Parldigi takes its first steps with this novel open-source currency and has started accepting donations in Bitcoin.

Over the past weeks, Parldigi has intensely discussed Bitcoin internally. Its members, coming from major parties such as SP, FDP, GLP and the Greens, have concluded that Bitcoin and comparable digital currencies not only pose risks (as claimed in earlier postulates 13.3687 and 13.3854), but also opportunities for Switzerland's financial sector. Furthermore, as Bitcoin is already in use as a means of payment in Switzerland, it makes sense to ensure legal certainty regarding money laundering laws and VAT.

Therefore, representative Thomas Weibel (green-liberals, Zurich) has submitted the postulate 13.4070 "Ensure legal certainty for Bitcoin" with 44 co-sponsors on December 5th.


Parldigi also takes its first step with this novel currency and has started accepting donations in Bitcoin. If you want to support parldigi in advancing digital sustainability in Switzerland, feel free to send donations to address 16qpAVM718XzWEH8LKJZetKutW5R8bNMNn . (Sidenote by translator: there are no restrictions for political donations in Switzerland. Faced with the problem of powerful politicians being influenced by donations, many countries created laws to restrict such payments. Switzerland chose the other solution and restricted the power of politicians instead. ;D)

Were any of those guys pirate party members? :D

Unfortunately not, as the pirate party is not part of the Swiss parliament. But AFAIK, some of the parldigi members have close ties to the pirates.

Great news from Switzerland.

Weibel Thomas, the Grünliberale Partei representative from the canton of Zürich was the one who lead the initiative. My special thanks to him.

Hermel, where can I find the list of the 44 other parliamentarians who supported the measure?  

Edit: Got it. It is here (http://www.parlament.ch/e/suche/Pages/geschaefte.aspx?gesch_id=20134070).

They are all listed here: http://www.parlament.ch/e/suche/Pages/geschaefte.aspx?gesch_id=20134070

Note that the authors of the previous two postulates (Schwaab and Kaufmann) both co-signed, which is a nice signal. The co-signers come from all major parties, which indicates high chances of passing.

Thanks a lot Luzius, great job :D

Especially nice that it has support from all major parties, so I guess we wont see one party to vote against it just because the postulate comes from another party.


//Edit: Sending my weekend trading profit there ;D

Relevant reddit discussion: http://www.reddit.com/r/Bitcoin/comments/1sgzzy/swiss_parliamentary_postulate_bitcoin_is_a/

Thanks for sharing!
Lets see how will this be perceived by the media...

Nöd schlecht...merci für s Engagement!

I don't mind what politicians think about bitcoin, as they can't control it. Anyway I remember the following news from Switzerland:

Swiss banks ditch secrecy
http://rt.com/business/game-changer-swiss-banking-secrecy-254/

So it's an interesting opportunity to whoever deposited money in Swiss bank accounts to migrate to bitcoin and be free from government control ;)

Watch out.
Ok, Bitcoin being defined as "foreign currency" in Switzerland might be interesting, because Switzerland enjoys a good deal of financial freedom (relatively to the rest of the world, at least). AFAIK, people there are free to have bank accounts in foreign currencies, use them as they want etc. But in many (most?) places of the world, such definition would be very negative. In many jurisdictions, foreign currency is something "common folk" can barely touch, and when they're allowed to, regulations are strict. Just take Argentina as an example. Bitcoin being defined as foreign currency there would be almost the equivalent of banning it.

This is an excellent question and has also been raised on hacker news: https://news.ycombinator.com/item?id=6876304

this is great :D
I guess they would also lower the bitcoin related taxes as  currency exchange isn't the same as an online commodity  ;D

Stop that bullshit talk here...

There is NO line about using it as foreign currency.
It's just a postulate to evaluate the RISKs of bitcoin.

Nothing else.

http://www.parlament.ch/d/suche/seiten/geschaefte.aspx?gesch_id=20133687

I have good news for you: you linked to the wrong postulate. Here is the new one: http://www.parlament.ch/e/suche/Pages/geschaefte.aspx?gesch_id=20134070

Also note that the author of the old (negative) postulate signed the new one, indicating that he is open to see the opportunities of Bitcoin.

Think we may see some alignment within Europe in regards of tax treatment soon.
Recent musings from UK taking Bitcoin down a 'voucher' route, is not going to happen. It now looks like HMRC (and possibly other European jurisdictions), are going to declare it currency, but not legal tender.

This should be the best news I've read so far. Thanks for sharing.

Rechtssicherheit for the win!

Without clear rules, nothing big can happen.

Do we want big things to happen? That's another question. Probably most would say: fuck yes.

I fail to find the actual text...

This says categorizing Bitcoin as foreign currency would make clear how it would have to be handled regarding AML, captial gains tax and VAT.

How would it be handled in switzerland? The VAT case seems clear. VAT applies when buying product, no matter what currency is used (not on the currency itself, of course, this is something still unclear in the german case).

Excuse my ignorance: how are capital gains of foreign currency holdings taxed?

How would AML regulation affect Bitcoin businesses and users in switzerland should Bitcoin become foreign currency?

The text has not been translated yet in all three official languages, so it is not yet online on the parliament's website. However, the text can also be found in the press release of parldigi: http://www.digitale-nachhaltigkeit.ch/2013/12/bitcoin/

Thanks. Later found it in the press release myself. I'm german, can even understand most "Schwiiitzerdütsch" because I grew up in range of Swiss TV and Radio stations.

I don't see how these are good news. It's just a question to evaluate bitcoins.
I mean it's good that they care about bitcoin but the final ruling is what it matters.  ::)

thanks for the info, good news indeed.

Well.. I have a feeling that this measure was the stimulant behind the Bitcoin postulate.

If the Swiss banks ditch secrecy, their business will get (severely) affected. So probably in order to neutralize the possible repercussions in the Swiss financial sector, the parliamentarians are proposing to make Switzerland the world leader in Bitcoin marketing.

From one question for an evaluation about what bitcoin is, we went to a "proposal to make Switzerland the world leader in Bitcoin marketing"??!!  :o
That escalated quickly  ::)

No capital gain taxes for private persons as long as you are not living of trading, basically. So the ordinary citisen will only pay welth tax (not much), no capital gain tax. However, you can not deduct losses from your income either.

ftfy ;)

I see, thanks for the info. It's quite adequate to tax Bitcoin gains like that, imo.

great news,

now waiting for other...

This is true for UK, in that, it has the same parallel if you were spread-betting.....if you can show a legitimately consistent income from elsewhere, any gains from trading spread-betting derivatives can legally be exempt. It even says so on the websites (4th/5th lines up from bottom of page)......
 
http://www.cityindex.co.uk/offers-spread-betting/?cid=0000225704&utm_source=bing&utm_medium=cpc&utm_term=spread%20betting&ef_id=UqRG9gAAAUTp@NHj:20131210095504:s 

"......and depend on individual circumstances." is a reference to your own EXISTING taxable income, with an understanding that that existing income cannot be derived from trading activities.

And yes, some dodgy City Boys have been pushing the boundaries on this, for years!!

How much is the wealth tax in Switzerland?

Is it possible for non-citizens to temporarily reside in Switzerland and sell their Bitcoins for CHF?

Depends on the village & Kanton you live (there is no wealth tax for the government/ the state), but AFAIK generally very low.
In the village I live it's 1'600 CHF for 1 Million Swiss Francs.
You can calculate it here for Kt. Schwyz (guess this is available for other Kantons too): http://www.sz.ch/xml_1/internet/de/application/d5/d939/d24240/d734/d24055/p2436.cfm (http://www.sz.ch/xml_1/internet/de/application/d5/d939/d24240/d734/d24055/p2436.cfm)

You wouldn't have to pay taxes in Switzerland for that, but that would probably depend on the country you live in now. I think it might be possible to avoid taxe this way, but better ask a tax consultant ;)

In theory, yes. Unless you are from the US or Eritrea. These are the only two countries that tax their citizens regardless of where they live.

If there a double-taxation agreement in place with your country and Switzerland, taxes are usually calculated pro rata. I.e. if you move to Switzerland on July 1st, you have to pay 50% taxes in Switzerland and 50% taxes in your previous country - regardless of whether you realize your capital gains before or after July 1st. Thus, if you want to realize are your gains in Switzerland, you would have to live here from January 1st until December 31st of the relevant year. Also, if your country of origin is outside the EU, it might not be easy to get a residence permit in Switzerland.

I used to understand inter-Europe residency, for tax purposes, was defined as 6months+1day, permanently in the country you wanted to declare in. Thats probably been updated recently though.

Note that Switzerland is outside the European Union (actually, geographically it is inside - but rather surrounded than part of it  :) ) - so different rules apply here.

http://www.parlament.ch/d/service-presse/fotogalerie/suedfassade/PublishingImages/bundeshaus-sued-15-g.jpg

Just letting everybody know that we will meet Mr. Schwaab tomorrow for an interview, if you have any questions for him, let us know!
Link: http://www.parlament.ch/d/suche/seiten/geschaefte.aspx?gesch_id=20133687
Link: https://bitcointhedocumentary.org/wordpress/?p=696

Nice to see bitcointhedocumentary.org reporting about this.

I actually spoke to him two weeks ago. If you want to get in touch with parldigi (the authors of the new postulate), let me know.

Hmm.. that is bad for non-Swiss bitcoin enthusiasts. But still I am happy for my Swiss brothers.

Good news from one of the last bastions for monetary freedom and rational govt.

Go Switzerland!

There's also some gov't proposal in cyprus to endorse Bitcoin (have it traded on the cypriot stock exchange, even). See interview with cfo of a crypriot university (endorsing Bitcoin, taking BTC as payment for education) on Max Keiser: http://www.youtube.com/watch?v=tZDmpiSdTTk#t=693

Yay! competition!

I'm not really convinced the parliament should recognize bitcoins as a currency like e.g. CHF, USD. What advantages would this recognition provide aside from having recognition from a parliament? Less taxes?
Also, wouldn't it be enough if the parliament recognizes it as a legal asset or commodity (like gold, silver, etc.)?

Commodity would not be desriable as you would have to pay VAT on it (except for gold in bullions). So if you sell me your cake for BTC we would both have to pay VAT. This would basically kill legal BTC trade in Switzerland. And yes, I think it is very desirable to have legal clarity. No medium to big businesses would want to sell things for BTC if it is not properly defined how to handle it.

Ok, I see. What should it be for only one of us to pay VAT? A currency?  ;D

It's a question of simply calling Bitcoin what it is, 'private money' as opposed to doing the UK or American thing of applying whatever definition they like to it despite it's purpose being blatantly obvious to anyone with a brain.

Bitcoin is an asset, perhaps implicitly superior to fiat currencies, or a currency.  It is interesting that the BIS affiliated central banks believe that it is an asset. 

From what I could understand from the post made by Hermel, there will be no VAT on Bitcoins for Swiss residents. There will be a wealth tax, but it is not very heavy (maximum will be around 1.6%).

On the other hand, if you are living in Norway you will have to pay VAT on bitcoin purchases.