Cryptocurrencies for individuals

								
																												Tax advisory for private individuals holding, trading or mining cryptocurrencies in Switzerland

Cryptocurrencies have become an increasingly common component of private wealth portfolios. Whether held as a long term investment, traded more actively or obtained through mining activities, digital assets raise specific tax questions for individuals.

In Switzerland, there is no dedicated cryptocurrency tax law. The taxation of cryptocurrencies therefore relies on existing tax legislation and the established practice of tax authorities at federal and cantonal level. This approach provides a flexible framework but requires careful analysis of each individual situation, as the tax treatment may vary significantly depending on the nature of the activity and the taxpayer’s profile.

RSM Switzerland advises private individuals on the tax implications of holding, trading and disposing of cryptocurrencies, with a pragmatic and case by case approach.

Understanding cryptocurrencies and their classification

What is a cryptocurrency

Cryptocurrencies are digital assets created and exchanged within decentralised peer to peer networks, most supported by blockchain technology. Transactions are validated and secured through cryptographic processes, and in some cases through mining activities that require significant computing resources.

Types of crypto tokens

The Swiss Federal Tax Administration distinguishes between different categories of tokens, based on guidance issued by FINMA. This classification is essential, as it determines the applicable tax treatment.

The main categories include:

Native tokens, such as Bitcoin or Ether, which are primarily used as means of payment and do not grant rights against an issuer
Asset tokens, which may represent claims, debt instruments or other financial rights
Utility tokens, which grant access to a digital service without conferring ownership or payment rights

Income tax implications for individuals

Private wealth versus business wealth

In principle, capital gains realised on assets held as part of an individual’s private wealth are exempt from Swiss income tax. This principle also applies to cryptocurrencies held privately. Gains realised upon disposal are therefore not taxable, and losses are not deductible.

However, cryptocurrencies are considered business wealth when the activity qualifies as self employment or professional trading. In such cases, gains become taxable and losses deductible.

Criteria typically considered by tax authorities include:

use of borrowed funds
short holding periods
high transaction volumes
reliance on trading income to cover living expenses

As cantonal practices may differ, a full analysis of the individual circumstances is required to determine whether an activity qualifies as professional trading.

Mining activities

Cryptocurrencies obtained through mining may constitute taxable income if mining is considered a self employed activity. In such cases, the cryptocurrency received is taxable upon receipt, and gains realised on subsequent disposal are taxable as business income.

Swiss cantons may assess mining activities differently. Some consider mining to be self employment in all cases, while others evaluate the activity based on its scope and intensity.

Wealth tax and declaration obligations

Wealth tax on cryptocurrencies

Cryptocurrencies are considered taxable assets under Swiss wealth tax rules. They must be declared in the annual tax return, with tax rates depending on the cantonal tax scale.

The Swiss Federal Tax Administration publishes official taxable values as of 31 December for the most used cryptocurrencies. These values must be used for declaration purposes where available. If no official value exists, the market value or acquisition value must be declared, depending on the available information.

Voluntary disclosure

Failure to declare cryptocurrencies may lead to additional tax assessments and tax evasion proceedings. Swiss law allows taxpayers to regularise undeclared assets through voluntary disclosure, provided certain conditions are met.

Voluntary disclosure is only possible once and does not exempt the taxpayer from paying outstanding taxes and interest. RSM Switzerland assists private individuals throughout this process and in discussions with tax authorities.

Outlook and regulatory environment

Swiss authorities continue to monitor developments in blockchain technology and cryptocurrencies. While recent reviews have concluded that the existing tax framework remains appropriate, the rapid evolution of digital assets requires ongoing attention.

At an international level, organisations such as the OECD regularly review the taxation of virtual assets. These initiatives may influence future tax practices and reporting obligations.