Studies in the United States over the past couple of years have shown that freelancers occupy an increasing share of the labor force in developed countries. Experts predict that this trend will continue and in a few years this share will exceed 50% of all wage-earners in these countries. At the same time, a survey of freelancers showed that a significant proportion of such employees prefer to receive their salaries in crypto. Most often, they motivate this by the fact that cryptocurrency settlements increase the security of international payments, and also improves the speed performance of such transactions. Cryptocurrencies do not have such restrictions as state borders and large transaction costs.
Salaries in Crypto are becoming more widespread, and many companies are increasingly willing to use this method of remuneration for their employees. Freelance platforms offering jobs with payment in cryptocurrency are being developed a lot. However, do not think that salaries in crypto is relevant only for the digital industry. Digital currency can be used for remuneration in various sectors of the economy, provided that a legislative and tax base is prepared for this.
This prospect is already being considered by the governments of many states, therefore countries such as Switzerland, Estonia, New Zealand, Russia and others already offer the opportunity for employees of companies working on their territory to receive salaries in crypto. This gives a number of advantages not only to employees and companies, but also to the states themselves, which get the opportunity to regulate the sphere of crypto payments.
Other countries, such as the USA and Japan, are starting to use these opportunities. Several companies in these countries have already paid several thousand Bitcoins to their employees as a salary, and the legislation of the Baltic state of Estonia, which is one of the most advanced in respect of crypto, provides for taxation of income received in registered cryptocurrencies.
Salaries in Crypto works for Swiss tax revenue
Switzerland has long been one of the world’s financial centers, thanks to its laws protecting the privacy of depositors. It does not remain behind in the development of cryptocurrency finance. Decentralized digital currencies allow her to rehabilitate her image of a bank secrecy state that has been affected by the influence of geopolitical processes and pressure from other countries due to the fight against terrorism and illegal money laundering.
Switzerland has not failed to seize this opportunity and is today one of the most advanced states regarding cryptocurrencies. The government of this country is making every effort to create friendly conditions for the cryptocurrency community. Thanks to this approach of Switzerland and advanced views on Salaries in Crypto and other operations in digital currency, this country has become an attractive place for deployment of the head offices of many large crypto companies.
In addition, confederation law defines the income of traders and investors in cryptocurrency as tax-free. However, in some cantons, the total amount of cryptocurrency will have to pay a tax on wealth, as well as all other assets. At the same time, many other aspects of transactions with crypto assets are regulated, on a par with other financial transactions. As for salaries in crypto, it, like regular salary, is subject to declaration and taxation. Several levels of Swiss income taxation imply different types of taxes in different territorial units, but in any case, digital assets are equal to any other assets in terms of taxation and are taken into account as income, salaries in crypto is no exception.
New Zealand passes salaries in crypto Act
Most recently, the government of the island state adopted a law on taxation of wages paid in cryptocurrencies and now companies here can absolutely legally pay wages in digital currency. At the same time, enterprises are required to withhold income tax, as well as in the case of regular fixed salaries according to the schemes provided for in this country.
This is truly a progressive step on the part of the New Zealand government, since in many countries cryptocurrencies are equated with non-monetary assets, such as, for example, goods that companies have the right to pay employees and reward them. The New Zealand tax regulator quite strictly regulated the conditions for the payment of salaries in crypto, so the part of the salary that can be paid in digital currency should not exceed half of the total salary amount and should be converted into local currency.
In addition, the cryptocurrency in which part of the salary is paid must also be registered as acceptable for payment and tied to the value of one of the specific fiat currencies. It can be BTC, ETH, BCH, LTC, as well as any stable coins. According to representatives of the state tax service, all these measures are aimed at protecting employees, so salaries in crypto can only be accessed by officially employed workers. In turn, part of the crypto community has a different opinion regarding the reasons for the introduction of such regulation and believes that this is done solely to increase the tax revenues of the state and control. The opportunity for companies to pay salaries in crypto to their employees will appear from September 1, 2019, after the relevant decree comes into force.