If you are living in Switzerland and have invested in BTC, ETH, or any other type of digital asset, you may very well also have heard about crypto taxes, but you are maybe not exactly sure how it works or how it will affect you. Luckily for crypto investors in Switzerland, the Swiss Federal Tax Administration (FTA) has issued guidance that addresses the topic of crypto taxation in more detail. In this complete tax guide, you will learn everything you need to know about how crypto is taxed in Switzerland, what separates a private investor from a self-employed trader or a business, whether or not you need to pay wealth tax on your crypto holdings, how to report your crypto taxes, and how to use a crypto tax calculator to generate all the tax reports you need.
Just a heads up! This guide is quite extensive due to the complex nature of cryptocurrency taxes. While we recommend reading this guide from A to Z the first time to make sure you don’t miss out on anything important, you can also use the menu navigation on the right side to jump to any specific crypto tax question later.
We are also updating this guide regularly based on the latest tax guidelines and statements from the Swiss Federal Tax Administration. All updates will be listed below so that you can quickly see if anything has been updated since your last visit:
- August 8, 2022: The first version published
More specifically, these are the topics and questions we will address in this guide:
Let’s start with the most important question of all…
Do you pay taxes on crypto in Switzerland?
Private investors in Switzerland do not pay Capital Gains Tax (CGT) on their crypto profits. Only people considered to be self-employed traders or carrying on a business-like activity will need to pay tax on their trading and investment profits. However, even if you are considered to be a private investor, you may still have to pay either Income Tax, Wealth Tax, or both depending on your situation.
In the next section, we will look closer at how crypto is actually taxed in Switzerland.
How is crypto taxed in Switzerland?
The FTA does not consider cryptocurrency or crypto assets to be money or legal tender similar to the Swiss franc or euro. Instead, cryptocurrencies such as Bitcoin and Ethereum are considered private assets for tax purposes. This means that crypto assets are taxed similar to stocks, bonds, and real estate in Switzerland.
The most important thing to consider for every Swiss crypto investor is if you are considered to be a private investor, self-employed trader, or business from the FTA’s perspective. Why is this important? Because it determines if your crypto gains are either tax-exempt or subject to Capital Gains Tax.
Next, we will look at how to determine whether you will be considered a private investor or a self-employed trader for tax purposes.
Definition of private investor
When the Swiss Federal Tax Administration is determining whether you are considered a private investor in Switzerland, there are mainly five criteria that need to be met:
- You must own the crypto assets for 6 months or longer before selling
- The crypto profits do not exceed 50% of your net income
- The total trading volume does not exceed five times the initial portfolio value at the beginning of the tax year
- Cryptocurrencies are bought with your own money instead of with borrowed assets
- Derivatives and futures are only used to hedge risk or the value of your portfolio
If you can answer yes to all these criteria, you will be considered a private investor by the FTA, and your crypto profits will be completely exempt from Capital Gains Tax. On the other hand, if you violate two or more criteria, chances are that you may not be considered a private investor but a self-employed trader instead.
However, this should be seen simply as a guiding list of criteria used to classify the investment activity. It’s up to the tax office to make the final decision in each specific case and it’s likely going to be a lot of nuances involved – especially with regard to cryptocurrencies which is a rather new and rapidly evolving asset class.
We highly recommend consulting a tax professional in Switzerland or the FTA directly if you are not sure whether you will be considered a private investor or a self-employed trader.
How to avoid Capital Gains Tax in Switzerland
To avoid paying Capital Gains Tax on your profits from private assets you need to be considered a private investor by the Federal Tax Administration in Switzerland. When determining this, the FTA will first and foremost look at your trading volume, the time period you own the assets before disposing of them, and the size of your investment profits.
How long you own the crypto assets before selling is perhaps the most important criterion that will be considered since it’s essentially a measurement of how active you are in the market. The more frequently you trade, the higher the chances are you will be considered a professional trader instead of a private investor.
The size of your profits does also matter. For example, if you are a private investor, it’s unlikely that the investment profits exceed the total income from your ordinary job. If that is the case, it can be argued that investing or trading is in fact your job, thus you might be considered a self-employed trader.
The third criteria listed above is also important since the total trading volume is an indirect measurement of how active you are in the market as an investor. The higher the trading volume, the more likely you will be considered a self-employed trader and therefore don’t escape Capital Gains Tax on your profits.
While the criteria above are fairly clear, very few people in Switzerland are in fact considered to be self-employed traders instead of private investors. This means that you will most likely not pay Capital Gains Tax on your crypto gains even if you don’t meet all the criteria listed, but we still advise you to keep this in the back of your mind to reduce the chances of getting an unpleasant tax surprise in the future.
Crypto Income Tax Switzerland
While private investors don’t have to pay tax on their trading profits, you might still need to pay Income Tax on cryptocurrency seen as being earned during the tax year.
What does earned cryptocurrency mean? Having your salary from a job being paid in a cryptocurrency, getting paid in crypto in exchange for services if you are a contractor or freelancer, or receiving crypto from activities such as mining, staking, or lending will be considered income by the FTA.
In Switzerland, income taxes are levied at three different levels:
- Federal income tax
- Cantonal income tax
- Municipal income tax
While the tax rates on the federal level are the same all over Switzerland, each canton has its own tax law and tax rates. Municipalities will in general follow the tax law of the canton it is governed under but are entitled to set their own communal tax rate within certain parameters.
The Federal tax rates are progressive which means that the more you earn, the higher your tax rate becomes. Most cantons have also adopted a progressive tax system, but there are some cantons that have recently introduced flat-rate taxation instead.
The federal tax rates for 2021 for single taxpayers are as follows:
|Taxable income over (CHF)||Taxable income not over (CHF)||Tax on column 1 (CHF)||Percentage on excess (%)|
With income tax levied at three different levels, how much you actually need to pay in Income Tax will be highly dependent on which canton and municipality you belong to.
Crypto Wealth Tax Switzerland
The wealth tax in Switzerland is levied on a canton level. This means that you need to pay a tax on the balance of your total wealth assets less debt at the end of the tax year. When calculating the total balance, all worldwide assets considered wealth assets must be included. This includes, but is not limited to:
- Bank account balances, bonds, shares, equities
- Cars, boats, and other physical assets of value
- Property and real estate
- Cryptocurrency and other digital assets
In the crypto tax guidance from the FTA, it is stated that the market value at the end of the year should be used when determining the value of each cryptocurrency subject to cantonal wealth tax. Further, the guidance states that market rates published by the FTA should be used. For those cryptocurrencies which the FTA does not publish market rates for, the market value from a reputable exchange should be used instead.
After calculating the value of all your wealth assets at the end of the year, you can figure out how much wealth tax you need to pay by looking up the tax rate in the canton you pay taxes to. Most cantons apply progressive wealth tax rates, which means that how much you pay in taxes will depend on both where you live and the total value of your assets.
Is buying crypto taxed in Switzerland?
As long as you are considered a private investor by the Federal Tax Administration in Switzerland, you are not taxed at the time of buying cryptocurrency even if the purchase is done using another cryptocurrency. This is one of the reasons why Switzerland is considered a tax haven for crypto investors worldwide.
Buying cryptocurrency with fiat currency (Ex: CHF → BTC)
Both private investors, self-employed traders, and businesses do not need to worry about taxes at the time of buying cryptocurrency with fiat currency such as the Swiss franc or euro. This is because there is no tax on disposing of fiat currency.
Buying crypto and paying with another crypto (Ex: BTC → ETH)
Buying a cryptocurrency and paying with another cryptocurrency is not taxed in Switzerland because there is no capital gains tax on the disposal of wealth assets – as long as you qualify as a personal investor.
Is selling crypto taxed in Switzerland?
Similar to buying cryptocurrency, selling cryptocurrency is completely exempt from taxes in Switzerland as long as you are considered to be a personal investor by the Federal Tax Administration.
Selling cryptocurrency for fiat currency (Ex: BTC → CHF)
When selling a cryptocurrency in exchange for a fiat currency, you are disposing of a crypto asset which is a taxable event in most countries. In Switzerland, however, personal investors are not taxed when disposing of any personal wealth asset, which means you get to keep all the crypto profits in your account.
Selling crypto for another crypto (Ex: SOL → ETH)
Selling crypto for another crypto is similar to buying crypto for another crypto and is completely tax exempt if you are considered a personal investor by the FTA.
Taxes on crypto mining
Cryptocurrency received from providing mining services to a Proof-of-Work blockchain is considered a form of income in Switzerland – both on a federal and canton level. This means that you need to pay taxes on the value of the cryptocurrency received at the time of receipt, but how much you actually need to pay depends on where you live in Switzerland. You should use the CHF value of the cryptocurrency received at the time of the transaction when working out the market value of the coins received.
Which deductions you are allowed to offset your mining income with depends on if the mining activity is classified as being a personal investor, self-employed trader, or business operation. To complicate things further, different cantons have different rules and limits for what separates personal investor activity from being a self-employed trader or operating a mining business.
Crypto staking rewards taxes
Receiving cryptocurrency staking rewards is very similar in nature to receiving mining rewards. In the latest crypto tax guidelines, the FTA has stated that compensation from providing staking services qualifies as movable property for personal investors according to Swiss tax law. If you are considered to be a self-employed trader rather than a personal investor, the compensation is taxed as income from self-employment instead.
In both cases, cryptocurrency received as staking rewards is taxed at the time of receipt, but how much taxes you pay and the deductions you are allowed depend on where you live and whether you are considered a personal investor or staking as a self-employed trader.
Are crypto airdrops taxed?
The FTA is very clear in the latest tax guideline that airdrops are subject to income tax as income from movable property at the time of the transaction. You should use the asset’s market value in Swiss franc at the time of receipt when valuing the airdrop you have to report as income in your tax return the year after.
Other types of crypto transactions
So far, we have covered the most typical ways people interact with cryptocurrencies. But what are the tax implications for other ways of acquiring or spending crypto? While the general principle is that private investors are only taxed on cryptocurrency considered to be earned, there are also some other nuances worth mentioning.
Let’s break it down in more detail:
Tax on hard forks
The FTA has not mentioned the taxation of cryptocurrency hard forks specifically in its crypto tax guidance. Since hard forks are rather similar in nature to cryptocurrency airdrops, we can assume that hard forks are most likely going to be taxed in a similar way too. This means that hard forks are subject to income tax at the time of receipt.
Keep in mind that if you receive a forked cryptocurrency in your wallet shortly after the blockchain split happens, the value of the newly created coin is likely going to be zero since no exchanges have had the time to list the new cryptocurrency yet, and therefore you will not pay any taxes at the time of receipt either.
Tax on ICOs & IEOs
Investing in a new crypto token through an Initial Coin Offering (ICO) or Initial Exchange Offering (IEO) is essentially the same as exchanging one cryptocurrency for another. This means that, as long as you are considered a private investor, the gains from the cryptocurrency sold are completely tax-free.
Similar to all other personal wealth assets, there are no taxes on a federal level when gifting cryptocurrency. However, each canton has its own rules for gift tax which includes also gifting cryptocurrency to a friend or family member.
How much you will pay in gift tax depends on the following:
- The value of the asset gifted
- The type of asset gifted
- Where you live in Switzerland (ie. which canton)
- Your relation to the person receiving the gift
Receiving salary in a cryptocurrency
Some employers today, especially international startup companies, offer their employees to get paid in cryptocurrency rather than a fiat currency. But this does not mean you pay less in tax or can avoid the tax bill altogether – you are still taxed according to your ordinary income tax rate for salary received as a cryptocurrency.
To calculate how much you will pay in tax, you need to look up the fair market value of the cryptocurrency received in Swiss franc at the time of receipt. At the end of the tax year, you need to summarize the total income amount during the year, which then becomes the taxable income amount you will report in your tax return the year after.
Calculate capital gains Switzerland
So far in this guide, we have learned that private investors are exempt from Capital Gains Tax on their crypto profits in Switzerland. But if you are considered to be a self-employed trader or a business by the FTA, you need to work out your capital gains when disposing of a cryptocurrency.
Self-employed traders and businesses are free to choose whichever accounting method they feel appropriate – as long as it’s on the list of approved methods by the FTA. The allowed cost basis methods to choose from in Switzerland are:
- First-in First-out (FIFO)
- Last-in First-out (LIFO)
- Highest-in First-out (HIFO)
- Average Cost Basis (ACB)
When working out the capital gains for each transaction, we need to determine both the sales price and purchase price of the cryptocurrency being sold. The selling price, also called the proceeds, is simply the value of the crypto asset sold at the time of the transaction in Swiss francs. The purchase price, also referred to as the cost basis, should be determined using one of the four allowed accounting methods.
The general formula for calculating capital gains is defined as:
capital gain = selling price – purchase price
If you are not able to establish the purchase price, a conservative approach is to consider the value to be zero. However, this means that you need to pay tax on the full amount, and therefore more tax than you actually should.
Let’s look at an example to understand how to calculate capital gains better.
Noah is trading crypto as his full-time job and is therefore classified as a self-employed trader and needs to report his capital gains in the annual tax return. Noah is mostly trading Bitcoin and Ethereum using futures contracts, but he has also traded altcoins during 2022. In January 2022, Noah bought 4,000 AVAX for CHf30,000. In February, he bought AVAX again on two separate occasions. In total, he acquired 2,000 AVAX in February which he paid CHf12,000. Noah owns now 6,000 AVAX with a total acquisition cost of CHf42,000.
On the 5th of April, Noah decides to sell 50% of his AVAX portfolio to re-invest in other altcoins. He sells 3,000 AVAX and receives CHf35,000 in exchange. His transactions can be seen in the table below:
|Type||Date||Amount||Price (CHF)||Cost Basis (CHF)||Profit/Loss (CHF)|
Noah decides to use the Average Cost Basis method when working out his capital gains. Since we know Noah owned a total of 6,000 AVAX with a cost of CHf42,000 at the time of disposal, we can easily find the cost basis for the 3,000 AVAX disposed of this way: 3,000 / 6,000 * CHf42,000 = CHf21,000. The resulting capital gains are then found as 35,000 – 21,000 = CHf14,000.
The resulting table will look like this:
|Type||Date||Amount||Price (CHF)||Cost Basis (CHF)||Profit/Loss (CHF)|
The last thing Noah needs to do is to report the calculated gains together with his other capital gains in the tax return for 2022 which he will file in 2023.
How to calculate crypto taxes in Switzerland
Whether you are considered a private investor, self-employed trader, or a business by the Federal Tax Administration, you have to report both your crypto income and your total crypto asset value in the tax return each year. There are essentially two different ways to go about this – either manually or using a crypto tax calculator.
Let’s look at both methods:
Calculating your crypto taxes manually
Here are the steps you must take to calculate your crypto taxes manually:
- Download the transaction history from all exchanges where you have bought, sold, received, or sent any cryptocurrency. This includes also transactions from or to your own wallets.
- Calculate the cost basis for every individual transaction where cryptocurrency is disposed of
- Calculate the proceeds and resulting capital gains for all transactions that are considered taxable disposals by the FTA in Switzerland (self-employed traders and businesses only)
- Identify all transactions subject to Income Tax by the FTA
- Summarize the calculations to find the total taxable amount during the financial year
Calculating your crypto taxes using crypto tax software
The best option for most people in Switzerland is likely going to be using cryptocurrency tax software to automatically do the required calculations. If you want to save both time and money, here is how you can use Coinpanda to sort out your crypto tax situation and generate all the required tax reports automatically:
1. Sign up for a 100% free account
It is 100% free to create a Coinpanda account and you don’t need to enter any credit card information to get started. The free plan lets you explore and use all features for free.
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2. Connect all your exchange accounts and wallets
Coinpanda supports more than 500+ exchanges, wallets, and blockchains today. You can easily import all your transactions by connecting your exchange accounts with API keys or by uploading a CSV file with the transaction history. If you find that Coinpanda does not support an exchange you have used, reach out to us so we can add the integration – usually within a few days.
3. Wait for Coinpanda to crunch all the numbers
Get yourself a cup of your favorite beverage and wait for Coinpanda’s sophisticated calculation engine to crunch all the numbers for you. Coinpanda will automatically calculate the cost basis, proceeds, capital gains, and taxable income for all your transactions! This might take anywhere from 20 seconds to 5 minutes depending on how many transactions you have.
4. Check for any reported warnings
Coinpanda will automatically display a warning if it appears that one or more transactions are missing such that the cost basis calculations will not include the total purchase price. If you see any warnings, you should first double-check that you have in fact connected all your wallets and exchange accounts.
Do you still see any warnings? Fear not! We have written an extensive list of help articles that will guide you through the entire process of making sure your crypto tax reports are as accurate as possible. If you still need any help, the best way to get in touch with our customer support and tax experts is through the Live Chat.
5. Download your tax reports and tax forms
When you have successfully imported all transactions, the final step is to download the tax reports you need to file your taxes in Switzerland. Coinpanda’s tax plans start at $49 and you have lifetime access to all reports after upgrading.
Switzerland tax deadline
The tax year in Switzerland runs from January 1 to December 31 each year. Your crypto taxes should be reported in your annual tax return where you also report ordinary income from employment.
For the 2022 tax year, the filing deadline is March 31, 2023. If you are not able to file your tax return before this date, you can apply for a filing extension from the canton you report your taxes to.
Which records may the FTA ask for?
Having a good routine for record-keeping is essential for crypto investors in every country, with Switzerland being no exception. In case you get audited, the FTA might ask you to provide the following information about all your transactions with cryptocurrencies:
- The date of the transaction
- Which cryptocurrency was part of the transaction
- Type of transaction (acquisition, disposal, swap, etc)
- How much (number of units) was sold, exchanged, or bought
- The value of the cryptocurrency in Swiss franc at the time of the transaction
- Exchange records and other relevant statements
- Wallet addresses you possess the private keys of
Many cryptocurrency exchanges keep these records for a limited time only, so you should make it a habit to periodically export and save this information. It is vital to keep good records to make it easier to work out your capital gains and meet your tax obligations later. Coinpanda’s tax product can create a complete tax report with all of this information for you.
How to report crypto taxes in Switzerland
Because Switzerland operates with different cantons that are responsible for collecting Income Tax and Wealth Tax, the exact procedure for how to report your crypto taxes depends on which canton you belong to. In general, the easiest way to report your taxes is to do it online instead of using traditional paper forms.
For more information about how to report your taxes, you can go to the individual canton’s website. A full list of links to the different cantons can be found here.