The taxation of crypto-assets and Digital Assets

The working paper of the Federal Tax Administration

Tax law was the second field in which Swiss authorities had to find answers for crypto-assets without specific legislation. The Federal Tax Administration published a working paper on cryptocurrencies and initial coin and token offerings on 27 August 2019 and replaced it with a revised version on 14 December 2021. The paper addresses the wealth tax, the income tax, the withholding tax and the stamp duties. It adopts the classification of FINMA's ICO guidelines and distinguishes between payment tokens, asset tokens and utility tokens.¹ The use of the regulatory taxonomy in tax law gave issuers and investors a common vocabulary, although the tax analysis does not always follow the regulatory classification in every detail.

Private investors: wealth tax and tax-free capital gains

For individuals who hold crypto-assets as private assets, the Swiss rules are simple and, by international comparison, favourable. Payment tokens such as Bitcoin are treated as movable assets subject to the cantonal wealth tax at their market value at the end of the tax year. The Federal Tax Administration publishes year-end values for the main cryptocurrencies in its price list, and tokens without a current market price are valued at their original purchase price converted into Swiss francs. Gains and losses from the purchase and sale of payment tokens held as private assets are in principle tax-free capital gains or non-deductible capital losses. Income from mining is taxable and qualifies as income from self-employment where the criteria for such an activity are met. Staking rewards received through a pool are treated as income from movable capital, valued at the time of receipt, while operating one's own validator may amount to a self-employed activity.²

The tax-free status of private capital gains is one of the features that make Switzerland attractive to wealthy holders of crypto-assets and Digital Assets. It must be read together with the wealth tax, which falls on the full value of the holdings every year and can be substantial for large positions in a rising market. For a founder whose tokens have gained considerably in value, the wealth tax may become the most significant tax burden even in the absence of any sale. Cantonal practice on the valuation of illiquid tokens and of tokens subject to lock-up arrangements therefore matters a great deal in individual cases.

Professional trading

The tax exemption for private capital gains does not apply if the taxpayer is regarded as a professional securities dealer. The Federal Tax Administration applies to crypto-assets the criteria of its Circular No. 36 on professional securities trading. Where these criteria are met, gains are taxed as income from self-employment and are also subject to social security contributions.³ The circular sets out safe-harbour criteria concerning the holding period, the volume of transactions in relation to the wealth held at the start of the year, the proportion of capital gains in the taxpayer's income, the use of borrowed funds and the use of derivatives.⁴ The cantonal authorities apply comparable criteria. The Canton of Thurgau, for example, has published practice notes on commercial trading in securities, gold, foreign exchange and cryptocurrencies.⁵

For active traders the classification is decisive. An investor who trades frequently, uses leverage or derives most of his income from crypto gains risks having years of gains reassessed as taxable income, with interest and social security contributions. Advisers in Zurich therefore recommend that clients with substantial crypto activity document their investment strategy, keep their trading within the safe-harbour criteria where possible or consider holding the activity in a company. A tax ruling from the cantonal tax administration offers legal certainty in borderline cases.

Token issuers

For issuers the working paper distinguishes by token type. Funds raised through the issue of utility tokens and of asset tokens with a contractual character are in principle taxable revenue for the issuer, which may however form provisions for its obligations to develop the project. Funds raised through asset tokens with the character of participation rights are capital contributions that are not subject to profit tax, but they trigger the issuance stamp duty and dividends paid on them are subject to withholding tax. Debt tokens are treated like bonds: interest is deductible for the issuer and subject to withholding tax. Payment tokens and utility tokens trigger neither withholding tax nor stamp duties.⁶

These rules influenced the structuring of token sales in the boom years. Many projects preferred to issue utility tokens through a foundation or a company in a low-tax canton and to secure provisions for development obligations in advance with the tax authorities. The tax treatment of airdrops, which the working paper also addresses, and of hard forks has produced a more varied cantonal practice. The Federal Tax Administration has published further information on current tax questions concerning cryptocurrencies in its dossier on tax information.⁷

Notes

1. Swiss Federal Tax Administration (ESTV), “Arbeitspapier Kryptowährungen und Initial Coin/Token Offerings (ICOs/ITOs) als Gegenstand der Vermögens-, Einkommens- und Gewinnsteuer, der Verrechnungssteuer und der Stempelabgaben”, 14 December 2021, https://www.estv.admin.ch/dam/estv/de/dokumente/dbst/kryptowaehrungen/dbst-arbeitspapier-kryptowaehrungen-de.pdf.download.pdf/dbst-arbeitspapier-kryptowaehrungen-de.pdf. ↩
2. ESTV, working paper of 14 December 2021 (see previous note), sections on wealth tax, income tax, mining and staking. The paper refers to Article 16(3), Article 18(1) and Article 20(1) of the Federal Act on Direct Federal Taxation. ↩
3. ESTV, working paper of 14 December 2021, section on professional trading, https://www.estv.admin.ch/dam/estv/de/dokumente/dbst/kryptowaehrungen/dbst-arbeitspapier-kryptowaehrungen-de.pdf.download.pdf/dbst-arbeitspapier-kryptowaehrungen-de.pdf. ↩
4. Federal Tax Administration, Kreisschreiben Nr. 36 “Gewerbsmässiger Wertschriftenhandel”, 27 July 2012, section 3, reproduced by the Basel-Landschaft tax administration at https://kanton.baselland.ch/finanz-und-kirchendirektion/steuerverwaltung-kurzmitteilungen/2012/476/downloads-1/476_beilage.pdf. A taxpayer is regarded as a private investor where all of the following criteria are met: a holding period of at least six months, an annual transaction volume not exceeding five times the securities and cash holdings at the beginning of the tax period, realised capital gains of less than 50 per cent of net income, no debt financing (or taxable investment income exceeding the attributable debt interest) and the use of derivatives only to hedge own positions. ↩
5. Canton of Thurgau, Steuerpraxis, “StP 20 Nr. 2 Gewerbsmässiger Handel mit Wertschriften, Gold, Devisen oder Kryptowährungen”, https://steuerpraxis.tg.ch/steuerpraxis/2023-10/stp-20-nr-2-gewerbsmassiger-handel-mit-wertschrift. ↩
6. ESTV, working paper of 14 December 2021, sections on the tax treatment of ICOs and ITOs at the level of the issuer, https://www.estv.admin.ch/dam/estv/de/dokumente/dbst/kryptowaehrungen/dbst-arbeitspapier-kryptowaehrungen-de.pdf.download.pdf/dbst-arbeitspapier-kryptowaehrungen-de.pdf. ↩
7. ESTV, “Kryptowährungen – Besteuerung”, https://www.estv.admin.ch/de/kryptowaehrungen-besteuerung. The page summarises the treatment of payment, asset and utility tokens and indicates a contact address for questions on crypto taxation. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.