Switzerland’s bitcoin community has spoken out following confirmation that bitcoin is exempt from Value Added Tax (VAT) in the country.

Bitcoin had always been exempt from VAT in the country, Luzius Meisser, president at Bitcoin Association Switzerland, told CoinDesk, adding that the Swiss Federal Tax Administration (FTA) had clarified the situation following a formal question submitted by his group in February last year.

When asked about the implications for bitcoin business in Switzerland, Meisser said:

“This has direct implications for all bitcoin companies with Swiss customers. They now know for sure that they do not need to charge VAT. However, it does not affect transactions of Swiss companies with foreign customers. In that case, VAT might still apply as the service is exported.”

Erik Voorhees, founder at Switzerland-based cryptocurrency company ShapeShift, also welcomed the news and praised the country’s “measured and reasonable stance on bitcoin”.

He said: “This is helpful to our business as prices can be more competitive – ultimately the avoidance of any tax is good for individuals and business and makes the market more productive as less capital is extracted from it.”

The digital currency’s exemption from VAT was also praised by people outside the bitcoin space. Jean-Christophe Schwaab, a Swiss Socialist politician told CoinDesk:

“I think that exempting bitcoin is a good decision that could help the rising of bitcoin in my country. To pay VAT on a payment method is quite absurd!”

Bitcoin taxation in Europe

The clarification for Swiss bitcoin companies follows their Spanish counterparts’ celebration in April, after the Ministerio de Hacienda – the Tax Office – clarified that bitcoin was exempt from VAT following a question submitted by a digital currency enthusiast.

Meanwhile, an oral hearing to discuss bitcoin’s VAT exemption is due to take place at the European Courts of Justice in Luxembourg on Wednesday. The session has been organised to address Sweden’s question of whether bitcoin exchanges would be liable to pay tax on the fees that are charged to their users.

The Swedish case is known as C-264/14 Skatteverket v David Hedqvist.

Swiss flags image via Shutterstock