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Do I pay tax when my Bitcoin goes up? The Swiss answer surprises most people
If you moved to Switzerland, the rules you carry in your head are almost certainly the wrong ones. Here the gain is not the tax event. The holding is.
This is the question I am asked most often, and among women who moved to Switzerland it comes with a particular kind of worry attached. They have read about Bitcoin and tax in English, and almost everything written in English assumes an American or British reader.
So they arrive expecting capital gains tax, records of every disposal, and a bill when they sell. In Switzerland, for a private individual, almost none of that is how it works.
The two sentences that matter
For natural persons holding private assets, the resulting gains and losses generally constitute tax-free capital gains or non-deductible capital losses.
That is one half. If you sell Bitcoin at a profit as a private individual, that profit is generally free of tax. The other side sits in the same sentence and is easily missed: losses cannot be deducted either.
The second half concerns the holding. Bitcoin counts as movable capital assets. It therefore belongs to your taxable wealth and is subject to cantonal wealth tax, in the same way as a savings account or a securities portfolio.
Wealth tax, if you have never met one
Most English-speaking countries have no wealth tax at all, so the idea itself is unfamiliar. It is worth understanding, because it changes what you need to keep track of.
A wealth tax is levied each year on what you own, not on what you earn or on what you gain. Every canton sets its own rates and its own allowances, and the differences between them are considerable. Your bank accounts, your securities, the value of a property and your Bitcoin all count towards the same total.
The practical consequence is a pleasant one for most people: you do not need to record every purchase and every sale in the way you would elsewhere. What you need is a reliable figure for what you hold at the end of the year.
What goes in your tax return
- Record your holdings on 31 December How much Bitcoin do you hold at the year end, across all wallets and accounts together. A screenshot or a printout is enough for your own records.
- Take the rate from the official list The Federal Tax Administration publishes an official year-end rate for Bitcoin. Use that one, not the price shown in your app.
- Enter it in the securities and assets schedule As an asset, with a description, the quantity and the value in francs. The exact name of the section differs from canton to canton.
- Keep your records Purchase confirmations and annual statements from your platform. Not to submit, but in case anyone asks.
Where it becomes different
The friendly rule applies to private assets. There are situations in which the tax authority looks at things differently.
- Mining and staking count as taxable income at the moment they accrue, not as capital gains.
- Airdrops are also treated as income, valued at market value when allocated.
- Anyone trading very frequently, working with borrowed money or living from trading may be classified as a professional trader. Gains then become taxable and social security contributions fall due.
- Bitcoin held as business assets falls under different rules entirely.
The criteria for professional trading are set out in a circular from the tax administration and applied to crypto by analogy. Meeting them is not a guarantee, because courts are not bound by that circular. Anyone trading regularly and in size should have this looked at properly rather than relying on a rule of thumb found online.
If you are a US citizen, this is only half your picture
Readers from other countries should also check whether obligations remain in their country of origin, particularly in the year they moved. Rules on exit taxation and on the year of departure vary widely.
Why there are no numbers in this article
You will find no tax rate and no allowance here. That is deliberate. Wealth tax is cantonal, the rates and allowances differ considerably, and they change. A figure that is right for Zug is wrong for Geneva.
Binding information comes from the tax administration of your canton. Most publish a leaflet on cryptocurrencies, and several offer it in English. The Federal Tax Administration answers questions on the underlying system directly.