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Switzerland Crypto Tax Guide 2023

by
Pratibha Tiwari
Reviewed by
min read
Last updated:

Switzerland has been widely regarded as a haven for crypto investors and startups. It is home to more than 900+ crypto companies, and the crypto adoption rate stands at 20%, well above the global average of 16%. Part of the reason why crypto adoption is high is because most individual investors don’t have to pay capital gains tax in Switzerland. If you have invested in BTC, ETH, or any other crypto as an individual investor, you don’t need to pay CGT on your gains, but other types of taxes may apply. Fortunately, the Federal Tax Administration (FTA) in Switzerland has clear guidelines on how different crypto transactions are taxed.

You can either refer to the detailed guidance here or read this guide where we have structured all the important details in a more digestible fashion. The guide goes at length to discuss various aspects of crypto taxation like How is crypto taxes in Switzerland? How to avoid crypto taxes? What are some tax-saving strategies? When to file crypto taxes? And more. 

Note that this guide is quite extensive, therefore, we suggest you read it thoroughly to ensure that you don’t miss out on any crucial details. Moreover, this guide will be updated regularly to accommodate any new guidelines/laws/rules, so make sure you keep revisiting the guide to stay updated on taxation trends in Switzerland. 

How is Crypto Taxed in Switzerland

Crypto is categorised as kryptobasierte vermögenswerte or crypto-based assets in Switzerland since the authorities do not consider them to be legal tender. This means that crypto assets are similar to securities like stocks and bonds, which is good news for individual investors because there is no capital gains tax on gains derived from private wealth assets in Switzerland.

However, you do need to pay CGT on your gains if you’re a trader or operating as a business. However, your capital gains are directly added to your income and taxed at regular income tax rates. 

There are two other types of taxes crypto transactions attract in Switzerland, they’re income tax and wealth tax.

Income Tax

Income taxes are slightly complicated when compared to other taxes in Switzerland. There are three types of income taxes:

  1. Federal Income Taxes
  2. Cantonal Income Taxes 
  3. Municipal Income Taxes

Regardless of where you reside in Switzerland, the federal income taxes remain the same

The federal income tax rates are the same regardless of where you stay in Switzerland. However, the cantonal income tax rates may vary. There are a total of 26 cantons and 2,136 municipalities in Switzerland. The federal income tax rates vary from 0 to 11.5% based on the level of income.

Wealth Tax

Wealth tax applies to all personal wealth assets in Switzerland including:

  1. Stocks and Bonds
  2. Physical assets like precious metals, property, and automobiles
  3. Crypto Assets

Wealth tax applies to the value of the assets reported at the end of the financial year. The total value of crypto assets is to be calculated at the end of the tax year based on the price list published by the FTA. If the price of a particular asset is not specified by the FTA, you can use the fair market value of the asset from a reputable source and pay taxes on the value.

Wealth tax varies based on the canton you live in, although most cantons have a tax rate of 0.3 to 1%.

Can the FTA Track Crypto

Data security is often mistaken for data anonymity in the crypto space. Blockchains have public ledgers and all your transactions are stored there, so it’s easy to track someone’s crypto transactions if one knows where to look. Due to the strict regulations governing investments in digital assets, exchanges usually have to comply with stricter KYC regulations. Under the proposed AMLD-6 (Anti-Money Laundering Directive), companies offering financial services in Europe are mandated to share KYC details and investor records with all EU member states.

Moreover, directives like the DAC-8, expected to come into force by January 2026, are aimed at boosting data visibility and better compliance to fight money laundering and tax frauds in the crypto sphere.

We suggest you get rid of any doubts you have about the FTA being able to track your transactions and any plans you might have for not reporting some of your gains on the tax report. 

Capital Gains Tax

As mentioned previously, individual investors are exempt from capital gains tax in Switzerland. However, it’s a different story if you’re a trader or if you operate in a business setting. To be categorised as an individual investor, you have to meet the following criteria:

  • The investor has held crypto for over 6 months
  • The trading turnover is less than 5 times the holdings at the beginning of the tax year
  • The capital gain is less than 50% of the investor’s total income in a tax year
  • The investor has zero debt-financing 
  • The investor uses derivatives only as a hedge to protect investments

Each canton decides whether you’re an individual investor or a professional trader, so if you’re not sure what category you fall in, seek advice from an experienced tax accountant.

Capital Gains Tax Rate 

There’s no dedicated capital gains tax in Switzerland, any gains are simply added to the income and taxed based on the income tax rates in the case of professional traders and businesses.

How to Calculate Crypto Gains and Losses

Calculating your capital gains and losses is a straightforward process. You just need to deduct your cost basis from the disposal amount of the asset. However, the concept of cost basis might be a little intimidating for new investors. The cost basis is simply the price you pay to acquire the asset inclusive of any gas fees or transaction fees.

You can use this formula to calculate your capital gains and losses:

Capital Gain/Loss = Disposal Amount - Cost Basis

Consider the following example:

Julia bought 1 BTC for 20,000 CHF 

Julia sold 1 BTC for 27,600 CHF

Let’s say Julia paid 150 CHF in exchange fees while acquiring the BTC

Cost Basis = 20,000 CHF + 150 CHF = 20,150 CHF

Now, 

Capital Gain/Loss = Disposal Amount - Cost Basis = 26,500CHF - 20,150CHF = 6,350 CHF

Crypto Losses

Since capital gains are not taxable in Switzerland as an individual investor, you won’t be able to deduct your crypto losses. However, it’s a different story if you’re a professional trader or a business.

You can claim a deduction on your capital losses since the FTA assesses them on a case-by-case basis. Therefore, we suggest contacting the FTA regarding the same.

Loss or Stolen Crypto

There is no specific guidance on how lost or stolen crypto is viewed from a tax perspective. But, likely, you won’t be able to deduct lost or stolen crypto from your crypto income because crypto capital gains are not taxable.

Crypto Tax Breaks Switzerland

Avoiding crypto taxes can attract legal trouble in Switzerland. However, here are some strategies you can use to lower your tax bill.

  1. Make Investments as an Individual Investor

As mentioned earlier, capital gains are exempt from taxation for individual investors. So any gains you make from your crypto investments are exempt from taxation, given that you fulfil the criteria set by the FTA to be an individual investor.

  1. Wealth Tax Allowance 

There are exemption limits for wealth tax in Switzerland. If the total value of your assets is less than the exemption limit, you owe no gift taxes. However, these exemption limits are canton-specific and will vary based on where you live. Also, note that the exemption limit goes up if you have dependents.

  1. Income Tax Allowance

In Switzerland, every citizen is allowed a federal income tax allowance of 14,500 CHF, meaning that you only pay income taxes on the amount that exceeds this allowance. You might also get a canton-specific income tax allowance based on where you live.

Crypto Cost Basis Method Switzerland

Cost basis calculations are irrelevant for private investors because capital gains are tax-exempt. If you’re a professional trader or a business, you can use any one of the following cost-basis methods to calculate your cost base.

  1. FIFO (First-In-First-Out)

The FIFO accounting method states that the first asset you buy is the first one you sell. This simply means that the acquisition price of the earliest acquired asset shall be the cost basis for the first disposal.

  1. LIFO (Last-In-First-Out)

The LIFO method states that the last asset you buy is the first one you sell. Meaning that the acquisition price of the latest asset you buy is to be used as the cost basis for your first disposal.

  1. HIFO (Highest-In-First-Out)

The HIFO accounting method considers the asset with the highest acquisition price as the first one sold. 

  1. ACB (Average Cost Basis Method)

The average cost basis method is different from all the other accounting methods on the list. Because it states that the cost basis for a particular asset is equal to its average acquisition price across all acquisitions. In other words, the cost basis remains constant across all disposals.

Consider the following example:

13/01/22 - Eric Bought 1 ETH for 1,200 CHF

19/03/22 - Eric Bought 1 ETH for 1,800 CHF

15/06/22 - Eric Bought 1 ETH for 1,500 CHF

23/07/22 - Eric Sold 1 ETH for 2,000 CHF

Now, since Eric acquired ETH at three separate instances for different prices, he will have to use one of the above-listed accounting methods for cost-basis calculations.

We shall use each of the following to see the effect on the final gain.

  1. Using FIFO 

Since FIFO suggests that the acquisition price of the first asset is the cost basis for the disposal.

Cost Basis = 1,200 CHF

Disposal Amount = 2,000 CHF

Capital Gain = Disposal Amount - Cost Basis = (2,000 - 1,200) CHF = 800 CHF

  1. Using LIFO

LIFO is the opposite of FIFO and suggests that the acquisition price of the first asset is the cost basis for the first disposal.

Cost Basis = 1,500 CHF

Disposal Amount = 2,000 CHF

Capital Gain = Disposal Amount - Cost Basis = (2,000 - 1,500) CHF = 500 CHF

  1. Using HIFO

HIFO is different from FIFO and LIFO, it suggests that the highest acquisition price for an asset is used as the cost basis for its disposal.

Cost Basis = 1,800 CHF

Disposal Amount = 2,000 CHF

Capital Gain = Disposal Amount - Cost Basis = (2,000 - 1,800) CHF = 200 CHF

  1. Using ACB

ACB simply assumes the average acquisition price across all instances to be the cost basis for the disposal.

Cost Basis = (1,200 + 1,500 + 1,800)/3 = 1,500 CHF

Disposal Amount = 2,000 CHF

Capital Gain = Disposal Amount - Cost Basis = (2,000 - 1,500) CHF = 500 CHF

 Crypto Income Tax

As an individual investor, you might be exempt from the capital gains tax, however, you have to pay income tax on any crypto received as compensation for the provisioning of services or labour. For instance, any compensation received as salary in crypto, the payment received for providing a service as a freelancer or contractor, or tokens received through airdrops, mining, and staking are all considered income and taxed under the same laws.

There are three different categories of income tax in Switzerland.

  1. Federal Income Tax- As mentioned earlier, the federal income tax rate is independent of where you reside in Switzerland.
  1. Cantonal Income Tax- Each canton has the authority to set independent rates for people residing in the area.
  1. Municipal Income Tax- Municipalities are governed by the cantons they fall into, and although they have the authority to introduce independent tax rates, they usually have one assigned by the cantonal authorities.

There are 26 cantons and 2,136 municipalities in Switzerland, and the tax rate you end up paying depends heavily on where you reside in Switzerland. 

Crypto Income Tax Rate

Of the three types of income taxes in Switzerland, only federal income tax has a fixed rate. Federal Income Taxes are progressive and are divided into income-based brackets. Following are the tax brackets and the corresponding federal income tax rates:

How to Calculate Crypto Income 

Calculating your crypto Income is less complicated than calculating capital gains and losses. You just need to add the individual value of assets received as income including those received from airdrops, staking, mining, or as compensation for provisioning a service. It is important to maintain records of the fair market value of the assets at the time of receipt. 

Tax-Free Crypto Transactions

Several transactions do not attract tax liabilities in Switzerland:

  1. Buying crypto with CHF
  2. Selling/Trading Crypto as an individual investor
  3. Spending Crypto
  4. Transferring crypto between personal wallets
  5. HODLing Crypto

Taxed Crypto Transactions

Here are some transactions that are taxed in Switzerland:

  1. Mining Crypto
  2. Staking Crypto
  3. Receiving Crypto through airdrops

Tax on Mining Crypto

Assets received as compensation for validating new blocks of transactions on a proof-of-work network (staking) are considered income both by the cantonal authorities and the FTA. This means that you’ll have to pay income tax on the fair market value of the assets upon receipt. The amount of tax you pay varies based on where you live in Switzerland. 

Note that the tax implications will vary heavily, based on how your mining activities are perceived at the federal and cantonal levels. Mining activities can be perceived as the following:

  1. Mining as an individual investor
  2. Mining as a trader
  3. Mining as a business

To complicate things further, each canton has its own set of rules and limits to determine which category you fall in. If you’re seen as a hobbyist miner (mining as an individual investor), you’ll only have to pay income tax on the FMV of the assets at the time of receipt. 

Tax on Staking Crypto

Although mining and staking are different in the way they verify and add new transaction blocks to the network, they’re viewed through the same lens by the tax authorities. The FTA is no exception, staking rewards are considered similar to mining rewards from a tax perspective and taxed accordingly. 

In the latest guidelines around crypto taxation, the FTA states that income derived from staking on proof-of-stake networks is classified as movable property if you’re an individual investor. However, if you happen to be a trader, then the staking rewards are viewed as income generated from self-employment.

Whatever may be the case, staking rewards are taxed as income on receipt. The exact amount of tax you pay on these rewards and any deductions allowed vary based on where you live.

How are Airdrops and Forks Taxed in Switzerland

The latest guidelines on crypto taxation make it very clear that any assets received from airdrops are seen as income from the movable property and taxed accordingly at the time of receipt. The FMV of the asset at the time of receipt is your taxable income base.

The FTA has not yet provided specific guidelines regarding the taxation of income from forks in the cryptocurrency space. Soft forks, where no new tokens are created, are likely to be considered non-taxable. However, hard forks are treated differently. Tokens received from hard forks may be viewed as income, given the FTA's strict stance on tokens received from airdrops.

To gain a deeper understanding of how such transactions are taxed, it is advisable to consult with an experienced tax professional to better understand the tax implications of such transactions.

Crypto Gifts and Donation Taxes

Gifting

Gifting crypto assets is a taxable event in Switzerland and the amount of taxes you pay depends on what region you reside in. The tax rate varies from 0-36% and each canton has its own set of rules and guidelines around gift taxation.

The tax rate you pay on gifted assets depends on the following factors:

  1. The total value of the gifted assets
  2. Kind of assets being gifted
  3. The canton you reside in
  4. Your relationship with the recipient

To know more about the canton-specific tax rules, visit here.

Donations

While there is no specific guidance regarding the tax-deductibility of crypto donations, it's important to note that donating over 100 CHF to a qualified Swiss charity can be deducted from your taxable income. The deductibility of crypto donations may vary depending on the jurisdiction and local tax regulations. It is recommended to consult with a tax professional or refer to the canton-specific guidelines to determine the tax implications of crypto donations and their potential deductibility.

Crypto Margin Trades, Futures, and CFDs

Although the FTA is yet to release specific guidance on how margin trades, futures, and CFDs are taxed, however, they do have detailed guidance on the taxation of traditional securities and derivatives. And it’s good news yet again for individual investors because just like in the case of traditional crypto assets, individual investors are exempt from capital gains tax derived from margin or leverage trades. 

However, such gains attract CGT if you’re a professional trader or a business operating in the region.

Crypto ICO Taxes

ICOs (Initial Coin Offerings) and IEOs (Initial Exchange Offerings) are special events that allow investors to invest in new projects in exchange for native tokens like ETH or BTC. Such transactions are generally viewed as crypto-to-crypto trades across tax jurisdictions and the FTA likely holds a similar view.

If that happens to be the case, any income from ICOs or IEOs will be exempt from CGT for individual investors.

NFT Taxes Switzerland

In Switzerland, there is currently no specific guidance on how NFT (Non-Fungible Token) transactions are taxed. However, we can make inferences based on existing guidelines regarding cryptocurrency taxation to understand how a majority of NFT transactions may be taxed:

  1. Buying NFTs with fiat: Tax-Free if you’re an individual investor
  2. Converting NFTs to fiat: Tax-Free if you’re an individual investor
  3. Swapping NFTs: Tax-Free for individual investors
  4. Minting NFTs: Likely Tax-Free for an individual investor
  5. Creating and Selling NFTs: Depending on the scale of your operations, this may be viewed as an income, and taxed accordingly. We suggest seeking guidance from an experienced tax professional to better understand the tax implications.

DAO Taxes

DAOs are member-owned communities with a shared vision. All the decisions in a DAO are made by members in the absence of central leadership. DAOs are new-age institutions that aim to democratise decision-making and allow people to have a say in decisions that directly affect them. DAOs are often called the soul of Web3 and enable members to earn rewards in multiple ways. DAO contributors are rewarded for their contributions to the organization, similar to how centralized organizations pay salaries to their employees. They also pay out bounties for one-time projects and redistribute any profits generated through operations.

There is no specific guidance on how income from DAOs is viewed from a tax perspective, however, income from DAOs will likely be viewed as compensation for contributions to a DAO and hence taxed under existing income tax laws. It would be prudent to seek guidance from an experienced tax professional to understand the tax implications of such transactions

DeFi Crypto Taxes

The FTA is yet to release detailed guidance on how DeFi transactions are viewed from a tax perspective. But like in most other instances that does not make DeFi transactions tax-free. It just means that you need to interpret the current guidance in the context of DeFi and proactively record and report such transactions. And since that might be a complicated task, we made the effort for you. Here are the possible tax implications of individual DeFi transactions:

  • Staking on DeFi protocols: Income Tax
  • Liquidity Mining: Income Tax on any new liquidity pool tokens
  • Yield Farming: Personal Income Tax
  • Interest Income from DeFi protocols: Income Tax(likely)
  • Adding/Removing Liquidity: Tax-Free
  • Borrowing from DeFi protocols: Tax-Free
  • Income from Play-2-Earn, Engage-2-Earn protocols: Tax-Free for individual investors

When to report Crypto Taxes in Switzerland

In Switzerland, the tax year aligns with the calendar year, and taxpayers are required to submit their tax returns by March 31st of each year. Therefore, for the 2022 calendar year, the tax return should be filed by March 31, 2023. However, if you can’t make the deadline, you can typically obtain a free extension in most cantons.

How to File Crypto Taxes in Switzerland

Switzerland comprises 26 cantons, and each canton is responsible for collecting wealth and income tax from its residents and reporting it to the Federal Tax Authority (FTA). Due to the variations in rules and guidelines across cantons, there is no universal tax filing procedure in Switzerland. The amount of tax you pay is dependent on the region in which you reside. Listed below are some examples of how different cantons have different taxation rules.

Canton of Zug

  • Crypto assets are declared in the securities list (code 160 for asset income, code 600 for assets).

Canton of Zurich

  • Crypto assets are declared as other assets in the securities and assets register.
  • Proof of digital wallet storage is required.

Canton of Lucerne

  • Crypto assets are declared as other assets alongside securities.
  • Proof of digital wallet storage is required.

Canton of Aargau

  • Crypto assets are listed in annual tax returns using Form 101.05 (list of securities and credit balances).
  • Proof of asset storage (end-of-year holdings report) is required.

Canton of Berne

  • Crypto assets are declared in tax returns using Form 3 (Wertschriftenverzeichnis und Rückerstattungsantrag Verrechnungssteuer).

The easiest way to file your tax returns would be to use traditional paper forms and file them using the online portal. Each canton in Switzerland has an independent portal for tax reporting, you can find a list of the different cantons and the links to their tax portals here.

What Crypto Records Will the FTA Want

Tax agencies across the globe have strict regulations around crypto record-keeping to ensure compliance with the existing tax laws and proper reporting of crypto transactions and the FTA is no exception to this. You are required to maintain the following records for a hassle-free tax filing experience.

  • Time and date of transactions
  • Type of cryptocurrencies 
  • Category of transactions (Disposal, Acquisition, Trade)
  • Quantity of assets
  • The market value of the assets at the time of the transaction
  • Exchange records
  • Personal wallet addresses for custodial wallets

How to File Crypto Taxes using Kryptoskatt

Now that you’re aware of how your crypto transactions are taxed and what forms you need to fill out to complete your tax report, here’s a step-wise breakdown of how Kryptoskatt can make this task easier for you:

  1. Visit Kryptoskatt.com and sign up using your email or Google/Apple Account
  2. Choose your country, currency, time zone, and accounting method 
  3. Import all your transactions from wallets and crypto exchanges
  4. Choose your preferred report and click on generate report option on the left side of your screen and let Kryptoskatt do all the accounting.
  5. Once your Tax report is ready, you can download it in PDF format.

If you still need clarification regarding the integrations or generating your tax reports, you refer to our video guide here.

Tax Saving Strategies Switzerland

There are three strategies you can use to pay less taxes in Switzerland.

  1. Make investments as a private investor because private investors are exempt from CGT in Switzerland.
  2. Each canton in Switzerland has a wealth tax allowance exempt from taxation.
  3. In Switzerland, every citizen is allowed a federal income tax allowance of 14,500 CHF.

These strategies have been discussed in detail in the above section titled “Crypto Tax Breaks”.

FAQs

1. Is Crypto Legal in Switzerland?

Yes, cryptocurrency is legal in Switzerland. Switzerland has been known for its favourable attitude towards cryptocurrencies and blockchain technology. The Swiss government has implemented a regulatory framework that supports the development and use of cryptocurrencies within the country.

Switzerland has taken a progressive approach to cryptocurrency regulations, aiming to foster innovation while maintaining financial stability and protecting investors. The Swiss Financial Market Supervisory Authority (FINMA) is the regulatory authority responsible for overseeing financial activities, including cryptocurrencies and initial coin offerings (ICOs). FINMA has provided guidelines and regulations to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) requirements.

Switzerland is home to "Crypto Valley," a region located in Zug that has become a hub for blockchain and cryptocurrency companies. Many blockchain startups and established companies have set up operations in Switzerland due to its favourable regulatory environment and supportive ecosystem.

2. How Is Crypto Taxed in Switzerland?

In Switzerland, cryptocurrency is not considered legal tender or a currency. Instead, it is categorised as crypto-based assets or kryptobasierte vermögenswerte. This categorization treats cryptocurrencies similarly to stocks and bonds, which are considered private wealth assets. As an individual investor, you are not subject to capital gains tax (CGT) on private wealth assets.

However, if you are a trader or operate a business involving cryptocurrencies, you are required to pay CGT on your gains. These capital gains are added to your income and taxed at the regular income tax rates.

Crypto transactions in Switzerland also attract income tax and wealth tax. Income tax has three types: federal income taxes, cantonal income taxes, and municipal income taxes. The federal income tax rates are consistent throughout Switzerland, but cantonal and municipal income tax rates vary. Each canton has its income tax rate, and municipal income taxes are governed by the canton they fall under. The rates for federal income tax range from 0 to 11.5% based on income level.

Wealth tax applies to all personal wealth assets, including stocks, bonds, and physical assets like precious metals, property, and cryptocurrencies. The value of crypto assets is calculated at the end of the tax year using the price list published by the Swiss Federal Tax Administration (FTA). If the FTA doesn't specify the price of a particular asset, you can use the fair market value from a reputable source to determine the tax value. Wealth tax rates vary among cantons, with most having rates ranging from 0.3% to 1%.

3. How can Kryptoskatt simplify crypto taxes for you?

We’ve already discussed how to file your crypto taxes in the above sections of the guide offering a stepwise breakdown of the entire process. However, we agree that it is unreasonably complicated even for someone with a fair amount of prior knowledge. Although, there’s an easy way to file your crypto taxes using a crypto tax software called Kryptoskatt.

Where all you need to do is log in on the platform, add all your trading accounts, wallets, and DeFi accounts and sip coffee while Kryptoskatt does all the heavy lifting for you. The platform can auto-fetch all your transactions from the tax year and generate a legally compliant tax report within minutes while also suggesting ways to lower your tax bill. It works like magic, all you need to do is try it once.

4. What are the different types of income taxes in Switzerland? 

There are three types of income taxes in Switzerland: federal income taxes, cantonal income taxes, and municipal income taxes. The federal income tax rates are consistent across Switzerland, while cantonal and municipal income tax rates vary.