Swiss cryptocurrency taxation: what to know

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Swiss cryptocurrency taxation: what to know

Recently there has been a return to talk about cryptocurrency, spurred by its stock market performance and the need for investors to know well the market in which they are going to fund. One of the hot topics of recent times, in these terms, concerns Switzerland and its taxation policies On crypto.

What emerges is the fact that world countries also take very different approaches: for example, in China and India the cryptocurrency market has even been banned.

Switzerland, in particular, is such a hotly debated topic in the current context because it has been regarded as a kind of tax haven, along with a select few others, with zero crypto-income taxation and no sales tax.

In the following article we will therefore delve into what the specific tax policies are in this country, so as to give people a chance to move through this territory with awareness.

Swiss guidelines on regulation

The cryptocurrency landscape is having a complex and rapid evolution, which has led everywhere to the need for regulation and, more importantly, the creation of a solid legal basis.

Firstly, investor protection emerges as a priority, considering the frequent fluctuations of cryptocurrencies and potential exposure to greater risks than traditional investments.

Thus, the regulations aim to ensure that companies and platforms operating in the sector meet specific standards, ensuring transparency and security for those who decide to rely on them.

In addition, the fight against money laundering and to the financing of terrorism emerges as a key objective of Swiss regulation.

Given the pseudonymous characteristics of cryptocurrencies, traceability of transactions is higher than cash transactions, effectively helping to thwart illegal activities.

Another key aspect is the creation of legal certaintyparticularly important since cryptocurrencies and blockchain technology are new and legally complex.

The Swiss regulations therefore aim to provide a clear legal basis, providing legal certainty for businesses, investors and consumers, thus helping to mitigate the uncertainty surrounding this emerging industry.

Based on the "principle of technology neutrality," Switzerland therefore regulates activities carried out with the help of technology rather than the technology itself, ensuring that crypto-activities are subject to the Same rules apply as for real money values.

It is one of the few countries with a growing fintech and blockchain ecosystem that has created a regulatory framework that promotes innovation without compromising financial integrity and security.

Regulatory authorities in Switzerland

In Switzerland, the regulation of cryptocurrencies is entrusted to different authorities, with the Parliament and the FINMA (Financial Market Supervisory Authority) at the center of this intricate regulatory framework.

The latter, established in 2009 with broad autonomy conferred by Parliament, represents the supreme financial market supervisory authority. Its role embraces the oversight and regulation of financial institutions and services, including those operating in the field of cryptocurrency and blockchain technology.

Its operation is based on a tripartite independence: institutional, functional and financial. Endowed with its own legal personality, it enjoys an autonomy that guarantees The absence of external policy directives On its supervisory activities.

Instead, functional independence translates into. In the absence of political interferencebut with full integration into the Swiss political-state system, subject to parliamentary oversight.

The financial one, finally, is embodied in the financing through supervisory fees and emoluments, ensuring responsible and transparent management of resources.

FINMA, in its mandate, is committed to protecting financial market clients and safeguarding the smooth functioning of markets by taking a risk-oriented approach that contributes to Consolidate confidence in the Swiss financial center.

In addition to this primary agency, another large share of responsibility also lies with the Swiss National Bank (SNB), because although it does not have direct regulatory power over cryptocurrencies, it contributes to the country's financial stability and Closely monitor market developments.

What the Swiss law says

Switzerland is positioning itself at the forefront of cryptocurrency regulation through the recent implementation of the Federal Law on the Adaptation of Law to Developments in the distributed register technology (TRD), which aimed to amend ten federal laws.

Entered into force on August 1, 2021, this legislation represents a significant step forward in the innovative world of blockchain and cryptocurrency, designed to create a business-friendly legislative environment and facilitate their adoption.

In other words, these are systems that, in addition to financial intermediaries, can involve other firms and individuals, increasing participation in TRD securities trading.

Switzerland's modern legislation on blockchain and TRD places it among the International pioneers, thus ensuring greater legal certainty in the event of insolvency and further consolidating its role in regulating innovative financial market technologies.

In particular, one of the crucial changes introduced concerns the "separation of cryptographic assets in bankruptcy." involving the ability to isolate crypto assets of insolvent entities or individuals in bankruptcy situations, addressing the challenges of identifying and managing digital assets in such circumstances.

Cryptocurrency taxes Switzerland: how does it work?

Cryptocurrency taxation in Switzerland is a process influenced by several factors, including the type of cryptocurrency asset, holding term, intended use and nature of transactions.

Generally speaking, however, capital gains and losses from non-trading transactions are tax-exempt, while the Possession of crypto assets such as bitcoins is subject to the tax on the substance and must be declared in the estate.

However, commercial income related to transactions, mining or other activities with cryptocurrency is subject to to income tax. Accurate documentation of all transactions is essential to properly complete the tax return and prove the origin of the assets.

Although facilitated, it is equally complex and is therefore recommended consult tax experts or cryptocurrency specialists to understand and comply with specific requirements.

In addition, it is noteworthy that Switzerland stands out for having created from the very beginning a legal framework for digital assets, while Europe has recently adopted the MiCA regulation.

This is useful and used to standardize rules in cryptocurrency trading in the EU by providing mandatory registrations and regulations for cryptocurrency service operators.

Payment tokens: what they are and taxation

Within the vast landscape of cryptocurrencies, to be able to properly understand how taxation works, it is essential to understand the classification based on their economic function and on the presence or absence of "collateral."

Among the most relevant categories are the "payment token" (payment tokens), which serve as digital means of exchange for goods and services, exemplified by bitcoin and litecoin.

In contrast, the "utility token" (utility tokens) offer administrative rights or user licenses, such as access to specific platforms or networks. In parallel, the "security token" (security tokens) are held for investment purposes and are transferable to dedicated platforms.

Additionally, a recent category emerges, the "non-fungible token" (NFT), unique tokens intended to represent digital assets or certify ownership of real physical assets.

In addition, in the context of cryptocurrencies, the following should be considered. Central Bank Digital Currency (CBDC), digital currencies issued by central banks, which enable decentralized exchanges through peer-to-peer transfers.

It is important to know the difference between these tokens and their use, as they encounter miscellaneous taxes depending on the country. In Italy, for example, payment tokens are subject to substitute tax at the rate of 25%, while it is precisely these that are not subject in Switzerland nor to the issue fee, nor to that of negotiation.

To get a good understanding of how tokens and cryptocurrencies work, from a tax perspective, it remains good advice to consult an expert who will keep abreast of changes in this regard and be able to advise for the best. 


For more information regarding the cryptocurrency taxation, you can ask Crypt&Co. for support.

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