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Taxation of cryptocurrencies
Private individuals regularly invest in shares, bonds, precious metals or real estate. For some years now, more and more people have also been investing in cryptocurrencies. In simple terms, cryptocurrencies are digital units of account that can serve as a means of payment and capital investment. Units in cryptocurrencies are not securities, but digital means of payment dependent on a protocol and the technology behind it. Holding units in cryptocurrencies such as Bitcoin is economically comparable to holding cash or precious metals. From experience, cryptocurrencies are subject to very high price fluctuations.
With increased investment in cryptocurrencies, questions about their tax treatment are also increasing. For tax purposes, cryptocurrencies are divided into different types. The following explanations are limited to the purely digital means of payment held by investors as private assets.
Cryptocurrencies are subject to cantonal wealth tax and must be declared in the tax return at their market value as of 31 December. The Federal Tax Administration (FTA) publishes the taxable values of the most common cryptocurrencies in the price list. For those cryptocurrencies for which the FTA does not publish tax values, the market value of one of the leading trading platforms can be used. If no current valuation rate can be determined, the cryptocurrencies must be declared at the original purchase price converted into Swiss francs.
The mere holding of cryptocurrencies acquired via crypto exchanges does not, as a rule, generate income or earnings that are subject to income tax and withholding tax. If an employee receives salary payments or fringe benefits in the form of cryptocurrencies, this is taxable income and must be shown on the salary statement. For tax purposes, the buying and selling of cryptocurrencies is to be treated in the same way as transactions with conventional means of payment (currencies). The gains and losses resulting from such transactions represent, in principle, tax-exempt capital gains or non-deductible capital losses for natural persons in their private assets. Depending on the type, scope and financing of the transactions, there is no private asset management, but rather self-employment. In the latter case, the capital gains from the sale of cryptocurrencies are considered to be commercial and are subject to income tax and AHV. Losses are tax deductible if they have been booked.
If you have any questions regarding the declaration of cryptocurrencies or if you have further questions, e.g. as of when the tax authorities regularly conclude that a person is self-employed, please do not hesitate to contact us.
