Switzerland

Switzerland takes a regulated approach to cryptocurrencies, generally classifying them as movable capital assets, similar to foreign currency or property, rather than legal tender. The Swiss Financial Market Supervisory Authority (FINMA) is responsible for regulating crypto-related services within the country. The Swiss Federal Tax Administration (FTA) provides federal guidance on cryptocurrency taxation, particularly through its Working Paper on Cryptocurrencies. However, the taxation landscape is also shaped by cantonal (state) and municipal tax authorities, which set local income and wealth tax rates. The overall framework is based on general Swiss tax laws, with specific interpretations for digital assets. For private investors, capital gains derived from selling cryptocurrencies are entirely exempt from tax, regardless of the holding period. However, professional crypto traders have their gains taxed as business income at progressive rates. Crypto holdings are subject to annual wealth tax, based on their value on December 31st each year. Income generated from crypto activities, such as staking or mining, is subject to progressive federal income tax rates, up to 11.5%, in addition to varying cantonal and municipal taxes, which can lead to higher combined rates. Corporations dealing with crypto assets face effective combined federal and cantonal corporate tax rates typically ranging from 11.9% to 21%. Value Added Tax (VAT) does not apply to crypto-to-crypto or crypto-to-fiat exchanges, as these are considered exempt financial services. However, other specific crypto-related services may be subject to a standard VAT rate of 8.1%. Staking rewards are treated as investment income and are taxed upon receipt at progressive income tax rates. Mining activities are generally classified as self-employment or business income, with rewards taxed when received, and associated costs like electricity and hardware being deductible. Yields from Decentralized Finance (DeFi) activities, such as farming or lending, are taxed as income upon receipt, while the tax treatment of DeFi swaps is assessed on a case-by-case basis. For Non-Fungible Tokens (NFTs), capital gains from private sales are exempt, similar to other private crypto assets. Conversely, if NFTs are created or traded by professionals, the proceeds are taxed as income. Neither converting crypto to fiat currency nor swapping one cryptocurrency for another is considered a taxable event for private investors, these are treated as non-realization events.